Commons Sitting of 11 February 1999

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

    Teachers (Training Days)
    Dr. Tony Wright: What plans he has to amend the current arrangements for training days for teachers. [68872]
    The Minister for School Standards (Ms Estelle Morris): This summer term, teachers of pupils in key stages 1 and 2 will receive an extra day's training in the teaching of literacy or numeracy. The Green Paper "Teachers: Meeting the Challenge of Change" notes the Government's concern that a high proportion of training takes place within school time, which has a disruptive effect on children's education, and envisages training taking place outside the school year when that is feasible. If teachers are expected to take training courses outside directed time, national pay and conditions already allow them to be paid for doing so.
    Dr. Wright: I am grateful to the Minister for that answer. Does she agree that the present system of training days—which we used fondly to call "Baker days"—is the cause of a good deal of disruption in schools? It disrupts life for parents and is disruptive for children. There is a lack of co-ordination inside the system, and there is no consistency across the country or within local authorities. Sometimes infant and junior schools on the same site—and with the same set of parents involved—have different days. That must surely be sorted out. Whatever else my hon. Friend does, will she at least ensure that training days are adjacent to holidays so that disruption is minimal?
    Ms Morris: I take my hon. Friend's point. Clearly, it is a matter for local authorities and others to decide when in the school year the training days will take place. I hope that they will make that decision in the interests not only of children but of parents, who have to make other arrangements.
    Parents want those training days to take place. This year alone, three training days have been used to support teachers in the literacy strategy, and next year they will be used for the numeracy strategy. They are an important
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    part of our crusade to raise standards. I hope that my hon. Friend's comments will be listened to at local level, and that appropriate action will be taken.
    Mr. Michael Fallon: Why should children lose five days' schooling because of some deal negotiated 12 years ago with the trade unions? [HON. MEMBERS: "Negotiated by you."] By whoever. Instead of letting local education authorities decide the matter, why not give the money to the head teachers and let them decide whether their schools should be closed?
    Ms Morris: If, given his article in The Times today, the hon. Gentleman is so concerned about what he clearly thinks is a major issue, one wonders what he was doing during his time at the then Department of Education and Science. Training days are days outside the school year in addition to the 190 days on which teachers teach pupils. Is the hon. Gentleman suggesting for one minute that teachers do not need to be trained to do the job? The training that they have on those five days is part of their continuous professional development, which is essential if we are to achieve the standard of training that we want. The hon. Gentleman will be interested to know that the Government have massively increased the amount of money available to schools under the standards fund and the school improvement grant. At long last, teachers can catch up on the training that was denied them by the Conservative Government for far too long.

    Nursery Education
    Judy Mallaber: If he will make a statement on (a) his timetable for and (b) the means he will employ to achieve the doubling of the number of children in nursery education. [68873]
    The Secretary of State for Education and Employment (Mr. David Blunkett): Over the next three years, we will double the number of free nursery education places for three-year-olds. We shall spend an additional £390 million. In the coming year, 50 of the most deprived authorities will receive specific grant, and in the following two years all authorities will receive the grant in addition to the standard spending assessment allocations that have been made to them.
    Judy Mallaber: I thank my right hon. Friend for that answer. Does he agree that the three-year-olds in the 50 education authorities selected for next year, who will be able to obtain a pre-school place, will be more ready and able to learn when they attend school? Does he recognise that, although those 50 authorities represent severely deprived areas, there are many smaller areas of deprivation in constituencies such as mine that do not satisfy the criteria used for funding next year because those criteria are based on postcodes? Can my right hon. Friend give an assurance that those areas will receive that provision for three-year-olds in the following years?
    Mr. Blunkett: My hon. Friend is right that there are pockets of severe deprivation, which are at the moment being taken care of by a substantial increase through the standard spending assessment for early-years provision. Derbyshire will receive a 5.2 per cent. increase in the coming year. In the second and third year of the additional

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    spending of £390 million—which, I emphasise, will be specific grant applied purely to developing places for three-year-olds and therefore not absorbed in the SSA—Derbyshire will receive the money it needs to provide the services that my hon. Friend rightly seeks.
    Mrs. Virginia Bottomley: I am sure the right hon. Gentleman will agree that pre-schools—formerly playgroups—are often a preferable experience for children. They have better adult:children ratios, are more connected to the local community and, above all, give great encouragement and support to parents. What more can the right hon. Gentleman do to answer their concern that primary schools are putting undue pressure on parents to accept the maintained nursery place rather than the pre-school place, so as to deliver on the right hon. Gentleman's targets?
    Mr. Blunkett: Provision for three-year-olds, as for four-year-olds, must be decided through the early-years development partnership, which deals with both nursery education and child care and in which the voluntary, private and statutory sectors are properly represented. Early-years development plans will not be approved by my hon. Friends unless they involve a proper recognition and development of services by the voluntary sector. We have been very clear about that.
    In the last year, we have put extra resources into the voluntary sector in order to save, in particular, pre-school learning alliance provision, which has not existed before. That has helped, but there is still a problem. To overcome that problem, I have set out in the code of guidance on admissions, which has been laid before the House, a specific requirement for infant and first schools not to discriminate in terms of the placement of a child in early-years education. That will ensure that the entitlement is retained wherever a child goes, whether the place is a pre-school learning alliance or a nursery education place.
    Mr. Malcolm Wicks: Children's early years are crucial, in terms of both brain development and development generally. Given that, and given this radical and important initiative in regard to nursery education—and given also what the family policy consultation document said about the enhanced role of health visitors—can we find ways, through nursery education, of building more effective partnerships between parents and teachers and between families and schools, so that the sometimes unused resource of the family can embark on a better partnership with teachers for the benefit of our children?
    Mr. Blunkett: We certainly can. Part of the role of the early-years development partnership will be developing the role that families can play, and emphasising the importance of involving families. It will also be possible to learn from the early excellence centres: we have already set up some centres, and the Under-Secretary of State, my hon. Friend the Member for Barking (Ms Hodge), will announce the establishment of a number of new ones shortly. We need to, as it were, cascade out the best practice and the lessons that have been learnt through the family literacy initiative, the involvement of parents and the experiments that have been launched throughout the country—experiments of
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    which my hon. Friend is aware. We need to extend all that to other areas and other providers. Our policy needs both to be family friendly and to recognise the critical role of the family in the education service.
    Mr. Don Foster: The expansion of early-years education under the present Government is very welcome, but when does the Secretary of State intend to set targets for the universal provision of early-years education for three-year-olds—whose parents want that for their children—as promised in the Labour party manifesto? Does the Secretary of State agree that, while expansion is important, so is quality? Would it not therefore be sensible to establish a key stage for early-years provision, which is what we have done in respect of other aspects of school education?
    Mr. Blunkett: I am pleased to be able to help the hon. Gentleman and the House. We have set targets that would give all four-year-olds access to early-years places, and we have achieved those targets. We are now setting a target that would give two thirds of three-year-olds free nursery places, and we will achieve that target by the next general election.

    Education Action Zones
    Mr. Geraint Davies: If he will make a statement on the progress in establishing education action zones. [68874]
    The Secretary of State for Education and Employment (Mr. David Blunkett): We have established 25 education action zones. Twelve began in September, and 13 at the start of the January term. The zones have now developed their action plans, and are in the process of implementing new and radical policies.
    Mr. Davies: The new education action zone in Croydon is supported not only by many big businesses—Commercial Union, the Midland bank, the National Westminster bank, Direct Line, Iandis and Gyr, Allders, Abbey National and many more—but by the community health trust, which is concerned about the health of school children, and by the Whitgift school, one of the most successful independent schools in the country, because it provides musical instruments and advises on best teaching practice and the use of playing fields and sports facilities. Surely this is the real third way of partnership that will drive up standards in Croydon's schools.
    Mr. Dennis Skinner: Steer carefully on the third way.
    Mr. Blunkett: As ever, I am grateful for the help of my hon. Friend the Member for Bolsover (Mr. Skinner).
    We are pleased with what has been achieved by the education action zone in Croydon, and pleased to affirm that we have seen the development of genuine co-operation—rather than competition—between schools, between the public and the private sector and between statutory and voluntary organisations. They are coming together to deliver an improvement in standards, for which education action zones are designed. I pay tribute to my hon. Friend the Member for Croydon, Central (Mr. Davies) for his work in bringing in private

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    companies, achieving co-operation from health and public services and forming links with the school that he described, which are already proving of great value to the children. In education action zones, we are overcoming simple, crude market competition and, instead, achieving the genuine collaboration of those who have the best interests of children at heart.
    Mr. David Willetts: Can the Secretary of State name anything happening in an education action zone that is not happening, or could not happen, elsewhere?
    Mr. Blunkett: Yes, I can. For example, as part of raising standards in those zones, 140 major companies have now committed themselves to working in them that would not have done so. This year alone, they have put into the zones £5 million that would not otherwise have been available. The major electronic commitments of British Aerospace, for example, in Hull, are making an enormous difference by linking every school with their family and community developments in adult education. When the Prime Minister and I launched the latest round of education action zones in Blackburn, we saw schools that are linking with companies to design—and then be able to manufacture—which brings education and employment prospects together.
    I would have hoped that the hon. Gentleman would welcome that, but, having corrected The Daily Telegraph on the abolition of the national curriculum as a Tory party policy, but not yet corrected anyone on his belief that the literacy hour is a mistake, or put the nation right on whether the numeracy hour will be condemned by the Tory party, will he tell us—we would really like to hear it—what the Tories would do, except say sorry for the 18 miserable years that they spent in government?

    "The Learning Age"
    Mr. Andrew Reed: If he will make a statement on the responses that have been received to the learning age Green Paper. [68875]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. George Mudie): We had some 3,000 responses to "The Learning Age" Green Paper. Nearly 2,000 were from members of the public and the rest were from employers, educational institutions, local authorities and others. We are greatly encouraged by the broad support in those responses for our overall vision and proposals. We will, in due course, publish a summary of the responses.
    Mr. Reed: I thank my hon. Friend for that reply. Does he agree that one of the worst legacies of the previous Government is the fact that 7 million workers have no formal qualifications in the workplace, which puts us among the bottom countries in the European Union? Does he further agree that individual learning accounts will be a key element in trying to address that problem? When does he intend to move that forward, to have a plan in place and to make the first 1 million individual learning accounts available, perhaps through training and enterprise councils?
    Mr. Mudie: If we are to improve the competitiveness of the British economy and to end social exclusion,
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    which mars and disfigures our cities and communities, we will have to succeed with "The Learning Age" proposals, a key one of which is the individual learning account. From April, up to 100,000 people will be able to have an individual learning account and call up £150 to spend on learning. Working in partnership with employers, trade unions and any other group, we view that as an important catalyst in bringing people back to learning who may not have given it a thought.

    Schools Funding
    Mr. Alan Simpson: What plans he has to introduce a needs-weighted element into the current pupil formula for schools funding. [68876]
    The Minister for School Standards (Ms Estelle Morris): Under the "fair funding" arrangements, which take effect in April, the allocation of funding to individual schools is a matter for each local education authority to decide, within the framework of regulations that were recently approved by Parliament. My right hon. Friend the Secretary of State is satisfied that those regulations allow ample scope for taking account of the different needs of schools and pupils.
    Mr. Simpson: Will my hon. Friend consider some of the advantages of a national Government lead on that? She knows as well as I do some of the problems of recently created unitary authorities such as mine, which face a legacy of under-achievement and long-term under-investment in city schools. Will she consider the successful introduction in Canada of a needs-weighted, rather than age-weighted, pupil unit into the formula? Not least of the consequences of that has been the successful reversal of the outward migratory trends of parents and families, who moved away from schools needing a recovery strategy. One of the remarkable achievements of that change in Canada was the rediscovery by parents of the virtues of the local school, and the realisation that there was no point in sending their kids in one direction when the resources for schools were going in the other direction.
    Ms Estelle Morris: I am always happy to look at what is happening overseas to see what we can learn. The decision on age-weighted pupil units is a local one. Nationally, we insist that 80 per cent. of funding should be pupil led. We feel that the remaining 20 per cent. gives local authorities enough flexibility to reflect their local circumstances. I entirely accept my hon. Friend's comment about his area's chronic underfunding under the previous Government. I know that he will welcome the more than £1 million of new deal for schools capital that has gone into the city and the fact that more than £500,000 has already been provided to begin the reduction of infant class sizes.
    Mr. David Willetts: Is the Minister aware that there is a growing crisis in schools funding because local education authorities do not have the information to set schools' indicative budgets? Even at this late stages, the Department cannot tell them how much money they will have to set aside for all the Ministers' pet projects. One LEA phoned the Department and was told by the operator, "I am sorry, I haven't got anything under 'LEA

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    support'. All I have is 'LEA intervention' and `Ofsted.'" Is not that the Government's real agenda—intervention, intervention, intervention, rather than setting schools free?
    Ms Morris: No, the Government's agenda is standards, standards, standards. Unless we intervene where standards are not sufficiently high, we shall have failure, failure, failure. That is the choice that we face. Local authorities know exactly where they stand for next year. They have had their best settlement for years. Most of the standard spending assessment money has already been announced. Local authorities throughout the country are making decisions about revenue arrangements for next year and passing the information to schools.

    Specialist Schools
    Dr. Phyllis Starkey: If he will make a statement on future plans in relation to specialist schools. [68877]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Charles Clarke): We plan to have 500 specialist schools in operation by September 2001. Our priority is to ensure that the range of schools in each specialism spreads across England, so that the benefits of the scheme are maximised.
    Dr. Starkey: My hon. Friend will be aware that Milton Keynes is fortunate in having four specialist schools already. I should like to draw his attention to an example of good practice at Lord Grey school, the specialist language school, to inform schools elsewhere. It has made enormous efforts to set up links with its feeder primary and middle schools through the national grid for learning and in partnership with a local business, Yamaha Keyboards, which has supplied computer keyboards to 1,000 pupils in the feeder schools to enable them to link electronically with the modern languages resources at Lord Grey. The school is also sending teachers to teach the top-year middle school pupils French, German and Spanish, as well as Japanese culture, because Milton Keynes has a large number of Japanese businesses. Will my hon. Friend join me in commending the school on its efforts and ensure that its good example is spread throughout the country?
    Mr. Clarke: I thank my hon. Friend for her comments. I join her in congratulating and commending Lord Grey school. I should also like to congratulate Milton Keynes as a whole, where four of the nine secondary schools—more than 44 per cent.—are specialist schools. That is the highest proportion in the country. There is a specialist school in each of the disciplines—arts, sport, Ianguages and technology. We are seeking to spread that example throughout the country. My officials stand ready to help all local education authorities and schools seeking to put forward bids as we go for the target of 500 in September 2001. The aim is to spread skills and experience widely. The specialist schools that I have visited have been—like my hon. Friend's in Milton Keynes—inspirational.
    Mr. Damian Green: I welcome the Minister's decision to extend the specialist schools initiative started by the previous Government. Such schools provide choice, diversity and excellence and we
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    applaud them. In the hope of some reciprocal generosity, will the Minister applaud the performance of another group of specialist schools that concentrate on academic attainment—namely the grammar schools? On Monday, the Prime Minister said:
    "if a school's doing a good job then we don't want to get rid of that school."
    Does that pledge apply to grammar schools? If it does, I invite the Minister to make a graceful retreat on his party's opposition to them.
    Mr. Charles Clarke: As the hon. Gentleman knows, when we took office there were 222 specialist schools. There are now 330 and I recently announced that a further 35 will open in September. As I said earlier, our target is 500 by September 2001. I have visited many of the schools and I agree that they are inspirational and spreading value. The hon. Gentleman asked about grammar schools—a different subject, as he well knows. As the Prime Minister made clear, we commend all good-quality schools. The issues of admission are dealt with under separate legislation in a way that the hon. Gentleman well understands.

    After-school Child Care
    Shona McIsaac: What progress has been made on introducing after-school child care places. [68878]
    The Parliamentary Under-Secretary of State for Education and Employment (Ms Margaret Hodge): The national child care strategy is already having a positive impact locally. We have funded the creation of nearly 30,000 new out-of-school child care places and through the commitment of a wide range of partners we are on target to create 60,000 new places in England by April 1999.
    Shona McIsaac: I thank my hon. Friend for that answer. It is good that everything is going so well. What is her view on an initiative by Grimsby college, my local further education college? It is called the weekend college and integrates education, training and child care so that while parents use weekends to retrain and acquire new skills, older children can participate in activities at the college and the little ones have a free child care place. Does my hon. Friend approve of that model of integration and would she like it to be used as an example elsewhere in the country?
    Ms Hodge: Indeed, I applaud the initiative that has been taken by Grimsby college and join my hon. Friend in congratulating the college on that innovative development. The further education sector can make an important contribution to early education and child care and the integration of the two. That is why we have allocated £5 million this year and a further £5 million next year to create 20,000 places. The further education sector provides high-quality places for children and opportunities for adults to gain new skills and qualifications.
    Mr. Desmond Swayne: We have already been regaled with plans to get children as young as three out of their homes and into school and now we

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    are being asked to consider keeping them in after school. Does not the Minister consider it any part of her job to encourage children to spend some time at home with a responsible parent?
    Ms Hodge: We all know that parents are the prime educators and nurturers of their children. However, there have been enormous changes in working practices. More than 50 per cent. of mothers with children under five work. The Government need to provide a framework that enables flexibility and choice for parents to ensure that children get the best start in life and that parents do not have to choose between the jobs that they need and the children whom they love.
    Mr. Syd Rapson: The working families tax credit, especially the child care element, is most welcome, but according to the Kids Clubs Network there is a great deal of ignorance about what is available. It would be a shame to lose the impetus before October. Will there be a promotional campaign to make sure that everyone knows about it? There should also be more providers, particularly in areas of need.
    Ms Hodge: The working families tax credit is an important part of our strategy to expand child care and ensure that all families can afford it. We will indeed launch a promotional campaign, and I warmly welcome the introduction of the child care tax credit, not only because it will make child care affordable to more parents, but because it will enable us to improve the quality of much of that care and increase the quantity, so that we provide genuine flexibility and choice for all families.
    Mr. Nick Hawkins: We welcome the fact that more after-school care will be made available, but before the Minister preens herself too obviously about the number of places created, as she did in reply to the hon. Member for Cleethorpes (Shona McIsaac), she should ask her civil servants to examine closely how much taxpayers' money has been provided and determine whether places have actually been created or whether best endeavours have merely been used to try to create them. The civil servants may tell her that, in a year or two, the National Audit Office may have to investigate that.
    Ms Hodge: I have written to the hon. Gentleman and to all right hon. and hon. Members about the places that have already been created under our national child care strategy in their locality. We know that, within the first two years of this Government, we will have doubled the number of child care places available. In two years, we will have created twice as many places as the previous Government did in 18 years. That is only the start of an ambitious and successful programme to provide flexible and affordable high-quality child care.

    New Deal
    Ms Dari Taylor: If he will make a statement on the development of the single work-focused gateway. [68879]
    The Minister for Employment, Welfare to Work and Equal Opportunities (Mr. Andrew Smith): We are on course for pilots of this important innovation to start
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    in four Benefits Agency areas in June, and in another eight in November. I am visiting each of the early pilot areas, meeting staff, councils, claimants' representatives and advisory bodies, as well as arranging briefing here for hon. Members whose constituencies are affected. We are determined that the gateway will provide a better standard of service and support to claimants than they have ever received before, as well as striking a good balance between rights and responsibilities.
    Ms Taylor: Will my right hon. Friend join me in saying a big thank you to the northern region Employment Service? Paul Robson's staff have worked hard and creatively to achieve good job opportunities for hundreds of people. The northern region is very disappointed not to be part of the pilot schemes, as the staff were keen to be involved.
    Does my right hon. Friend agree that the gateway offers us the chance to put welfare reform and good employment opportunities together in an excellent manner, developing most persuasively the personal adviser approach?
    Mr. Smith: I am pleased to join my hon. Friend in congratulating the Employment Service and all the other partners who are making such a success of the new deal and the other initiatives that we have launched for job generation. I agree that the role of the work-focused gateway, by extending the continuity of support and advice from personal advisers, which has been such a successful feature of the new deal, will indeed help claimants towards work where appropriate, and towards greater independence and personal development. It will stop claimants being shunted from pillar to post as they all too often have been in the past, as well as striking the right balance between rights and responsibilities. The single gateway will provide a whole new standard of service for claimants as well as shaping the future of the welfare state.
    Mr. Geoffrey Clifton-Brown: I am sure that the Minister will be aware that the National Audit Office can provide robust evidence that fraud and mispaid benefits in the social security system amount to a staggering £4 billion. How will the single work-focused gateway reduce that figure?
    Mr. Smith: In two ways: first, we will provide a genuinely joined-up service, integrating that which is separately provided at the moment through the Benefits Agency, jobcentres and local authorities. Secondly, by requiring people to attend a work-focused interview as a condition of receiving benefit, we will have the opportunity to cut fraud and to make people aware of their responsibilities, as well as the extra help that we are providing.
    Helen Jones: Does my right hon. Friend agree that if the single gateway is to work as we would wish, much will depend on the personal advisers? Can he assure the House that sufficient training will be offered to those advisers to enable them to do their job effectively with the vast numbers of people with whom they will have to deal? Will that include training in disability issues and in recognising mental health problems, so that they can adequately support their clients?
    Mr. Smith: My hon. Friend identifies an enormously important issue. There will be a comprehensive training

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    programme for all personal advisers and those helping claimants through the single gateway. That will draw on the existing expertise within the Employment Service and the Benefits Agency—for example, disability employment advisers—as well as ensuring that people who are coming to what, for them, is a new area of work, are fully appraised of the benefit entitlement and the extra help in the single gateway areas.
    Mr. Paul Keetch: Does the Secretary of State realise that he will receive support from the Liberal Democrats for the gateway, provided that it offers clients advice on child care and other benefits, and provided that clients are visited at home for the interview if they cannot get into the gateway? Is he aware of the practical difficulties? The gateways will have staff from the Employment Service, local authorities, other agencies and private providers—all with different pay and conditions and different computers. How will he ensure that they will be able to talk to each other to ensure that the Government's good intentions provide good results?
    Mr. Smith: By doing the job properly—and considerably better than I imagine the Liberal Democrats would, judging by the hon. Gentleman's convoluted question. I assure him that the provisos that he puts on his support will be satisfied. Therefore, we will have support from the Liberal Democrats for the initiative.

    Work and Family Life
    Caroline Flint: If he will make a statement on the measures which his Department proposes to introduce to encourage parents to combine work with family life. [68880]
    The Parliamentary Under-Secretary of State for Education and Employment (Ms Margaret Hodge): Working with employers and others, we will promote employment practices that benefit both families and businesses. We will finalise a campaign in the light of responses to our consultation document, "Supporting Families".
    Caroline Flint: Does my hon. Friend agree that the spread of family-friendly working practices is not as wide as it might be? It is a shame that only one in 10 employers contribute in any way to the child care of their staff. Will she look at ways in which her Department and other appropriate Departments can provide joined-up thinking to encourage more employers to understand the business benefits of providing family-friendly policies for their staff, but also to see how we can enable some of those employers who want to do more to achieve their aim?
    Ms Hodge: I agree that there is a lot of work to be done to change the culture on the acceptance of family-friendly employment policies. Some 46 per cent. of employees today have no access to any of the family-friendly working practices that we want to encourage. We are working across Government to raise the profile and importance of the policies to ensure that people understand the business case for adopting them. We shall be launching a campaign to provide advice, information and guidance, and we will give public recognition to those companies with family-friendly employment policies.
    Mr. Graham Brady: Does the Minister understand that, for most families,
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    financial constraints are the greatest pressure on family life and cause the most difficulties in combining that with work? Does she accept that steps to tax child benefit would only increase the pressure on family life, and would mean that hard-pressed families would spend more time working to make up for the money that they lose?
    Ms Hodge: It is indeed the pressure of finance that means that many people work long hours and that families do not spend enough time together. For that reason, I hope that the hon. Gentleman will support the Government's introduction of the minimum wage, which will tackle that problem. People want time, as well as sufficient income—and as a mother, I know that time is often at a premium.
    Mr. Jim Marshall: My hon. Friend and her colleagues on the Front Bench, as well as Labour Members on the Back Benches, keep referring to joined-up thinking and joined-up writing. If we want to introduce family-friendly provisions in the workplace and the other protections contained in the employment relations legislation, why are those provisions not to be extended to firms with fewer than 21 employees?
    Ms Hodge: I believe that my hon. Friend is referring to the extension of the disability discrimination legislation, which reduces the number of employees in firms to be covered by the measures from 25 to 20. We shall make further progress in that regard once the Disability Rights Commission is established. We shall seek advice from the commission about reducing the threshold further.

    Area Cost Adjustment
    Mr. Laurence Robertson: What plans he has to review the standard spending assessment system, with particular reference to the area cost adjustment, in connection with education. [68881]
    The Minister for School Standards (Ms Estelle Morris): We all accept that there are valid objections to the current system, including the area cost adjustment. We will be looking at proposals for reform over the next three years.
    Mr. Robertson: I thank the Minister for that encouraging reply. I remind her that the scheme means that Kent, for example, benefits in purely educational terms to the tune of about £26.5 million year, and that Oxfordshire similarly benefits to the tune of about £8.2 million a year. However, Gloucestershire, Oxfordshire's neighbouring county, loses out by about £2 million a year. Will she look at the iniquities of the scheme?
    Ms Morris: We certainly will; indeed, we began to do so when we took office. The inequalities did not begin on 1 May 1997, they have been going on for years. The previous Conservative Government failed to tackle the issue. We have begun to look into the matter and I hope that, over the next few years, we can work with local authorities to achieve a better formula.
    Mr. George Stevenson: The significant additional resources for education being provided by the Government are warmly welcomed

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    throughout the country, but is my hon. Friend aware that the anomalies of the area cost adjustments as reflected in educational standard spending assessments mean that those additional resources are widening unfairness? That, coupled with the serious anomalies in the additional educational needs formula, means that my local education authority, like many others, is at a serious disadvantage. In this regard, the Government's three-year plans are not bringing stability, but are perpetuating an injustice. Will my hon. Friend at least consider what interim measures can be taken to mitigate that serious problem?
    Ms Morris: The Secretary of State for the Environment, Transport and the Regions has lead responsibility for looking at the SSA formula. However, we have been working closely with his Department and with others to try to deal with what I accept is a very serious matter. I take seriously what my hon. Friend says: his area and surrounding Staffordshire have suffered for too long from an unfair formula, but it is no good changing that formula if we do not get it right this time around. It is right that the Government work with local authorities to reach an agreement on how we can move forward. We were not able to reach an agreement this year, but we will continue to look at this important matter.
    I thank my hon. Friend for his acknowledgement of the extra resources that have gone into Stoke. I assure him that, in terms of extra resources—available through the new deal for schools and the standards fund—there is nothing in the SSA formula that will mean that authorities such as his will not benefit at least as much as, if not more than, those that benefit from the current SSA formula.
    Mrs. Theresa May: It is clear from that answer, and from the Minister's earlier answer on schools funding, that the Government do not understand the impact of their policies—increased burdens on LEAs, extra bureaucracy and failure to fund fully the teachers' pay award—on SSAs and on LEA funding. One LEA has announced that the Government's interventions will cost it almost £1.5 million before it can even consider spending money on improving school standards. Does the Minister realise that her Department for intervention will cost LEAs and schools dear? Far from raising standards, intervention, intervention, intervention means bureaucracy, bureaucracy, bureaucracy. Money is being spent on Government intervention instead of being spent, as it should be, on standards in the classroom.
    Ms Morris: Half the time, I do not know what world the hon. Lady lives in. When her party was in government, it increased the SSA but did nothing to match the increase with increased funding. We have provided an increase this year that will give local authorities ample money to fund the most generous teachers settlement in years. Many key objectives relating to class size are being funded at 100 per cent., as were child care places.
    On the question of intervention, I think that every penny spent to ensure that local authorities do their job well in passing on money to schools is money well spent. As far as central administration goes, we have taken powers to cap the amount of money that local authorities spend at the centre to ensure that they pass on the bulk to schools. The hon. Lady's Government could have taken those powers during their 18 years in power, but they did not.

    Mill Hill County High School
    Mr. Andrew Dismore: If he will make a statement on the admissions policy of Mill Hill county high school. [68882]
    The Secretary of State for Education and Employment (Mr. David Blunkett): Mill Hill county high school has a substantial partial selection policy, with the usual admissions implications for parents in the area, and for other schools there. The School Standards and Framework Act 1998 and the statutory code give parents the ability—like admissions authorities in the LEA area—to call on the adjudicator to make a judgment about the impact of those selective policies and the way in which they distort the real choice and preference of parents in the area.
    Mr. Dismore: Is my right hon. Friend aware of a real sense of outrage felt by many parents in my constituency at the fact that 45 per cent. of places at the school will be allocated by aptitude, with the bulk of the remainder going to siblings? Only 10 of the 210 places at the school are reserved for local kids. My right hon. Friend will understand why one parent has written to me, saying:
    "The implication is that local children are not worthy of a place at this school."
    What hope can he offer the many parents who live close to the school that their children will not have to travel many miles every day because of the elitist aspirations of the school's governors, which discriminate against local kids?
    Mr. Blunkett: I understand both the concern expressed by parents and the understandable outrage displayed by my hon. Friend. Forty five per cent. of places depend on selection, not aptitude—
    Mr. David Willetts: What is the difference?
    Mr. Blunkett: The difference was invented by the previous Government and the previous Secretary of State. Perhaps the House can tell why I am so keen to ensure that history stays in the national curriculum. On the Opposition Benches, amnesia is matched by a lack of literacy and numeracy.
    The code and the 1998 act will deal with partial selection. We shall respond through adjudicators to the outrage to parents' feelings that my hon. Friend the Member for Hendon (Mr. Dismore) has described. We shall ensure that all children have proper access to a decent education.

    Education SSA (North Yorkshire)
    Mr. Lawrie Quinn: What measures he is taking to ensure that education standard spending assessment fund increases for 1999–2000 are implemented by North Yorkshire county council education services. [68883]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Charles Clarke): My right hon. Friend the Secretary of State has written to North Yorkshire county council to make it clear that all

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    the increase in the education standard spending assessment should be used to support education services, and especially the drive to raise school standards.
    Mr. Quinn: Will my hon. Friend join me in congratulating the children and parents of Scarborough and Whitby and the rest of North Yorkshire on persuading the county council's corporate affairs committee to heed the Secretary of State's letter? Will he accept an invitation to visit my constituency so that he can see the desperate need to increase standards and so that we may, in future, not only passport increases of 6.6 per cent. for school services in the county, but have regard for the special needs of the urban areas of North Yorkshire?
    Mr. Clarke: Yes, I am happy to join my hon. Friend in congratulating all the children and parents and the rest of the community who have persuaded the county council to carry the money through to education, as we intended. I would also be happy to visit my hon. Friend's constituency sometime in the future to see what has been done there.
    I hope that we shall secure all-party support for the idea that money allocated to education should go to education. Perhaps Opposition Members will try to encourage their Conservative colleagues in Wiltshire, for example, to ensure that money intended for that purpose is spent on education. They should heed the example set by North Yorkshire.
    Mr. Phil Willis: I obviously live in a different part of North Yorkshire, because I have seen the £12.9 million passported, despite opposition from the Tory Administration. There has been a 9.6 per cent. increase in council tax and we still find ourselves £2 million short—100 teachers will be sacked in North Yorkshire as a result of the Government's allegedly excellent settlement.
    The hon. Member for Havant (Mr. Willetts) asked a question that has not been answered. A lot of money is being set aside for the standards fund and schools cannot set their budgets because the Government have not decided what sums they will allocate. I refer the Minister specifically to 12A funding and to 100 per cent. refunding of music, which would bring £700,000 to North Yorkshire. Those funds should be released immediately so that some certainty may be brought to schools' budgets from 1 April.
    Mr. Clarke: On the hon. Gentleman's final point, we made announcements regarding music a few weeks ago along the lines that he has requested. I find it strange that, although almost every commentator has remarked on the very high SSA settlements that have been achieved this time, nothing is enough for the Liberal Democrats. They are not prepared to work with others effectively. However, I commend the Liberal Democrats, as my colleagues did earlier, on campaigning for more resources for education. That is fine. It is not enough to whinge and whinge; we must create and create. That is what the Government are trying to do.
    Mr. Ben Bradshaw: Leading on from that reply, is my hon. Friend the Minister aware that, in the south-west, Liberal Democrats—
    Madam Speaker: Order. The Minister is replying to questions about North Yorkshire so I tend to call
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    hon. Members who represent that area. The hon. Member for Exeter (Mr. Bradshaw) does not represent North Yorkshire, although he is quite entitled to speak about it. His question must be about North Yorkshire. I call Mr. Key.
    Mr. Robert Key: I am grateful, Madam Speaker.
    Madam Speaker: Try harder than the last Member.
    Mr. Key: Is the Minister aware that North Yorkshire is not alone in that education authorities up and down the country view with great concern his Department's new policy, which suggests that local councillors no longer know best about what to spend, within SSA indicators, on which services? Far from being welcome, that doctrine has caused great disturbance among local councillors.
    Madam Speaker: In North Yorkshire.
    Mr. Key: The amount that North Yorkshire spends on its education services is best judged at local level by North Yorkshire's elected councillors.
    Mr. Clarke: Characteristically, the hon. Gentleman completely misses the point: it is not about the rights of local councillors to take decisions, but about the judgments that they make. In his letter to North Yorkshire county council, my right hon. Friend the Secretary of State urged the council to spend the money on education. I hope that Opposition Members will urge Conservative councillors to ensure that that happens.

    National Year of Reading
    Mr. Gordon Marsden: What his assessment is of the response to date by local education authorities to the Government's national year of reading initiatives. [68885]
    The Minister for School Standards (Ms Estelle Morris): The response from local authorities has been extremely positive. All local authorities had a co-ordinator in place by the beginning of the national year of reading. Most also have steering groups in place, bringing together a wide range of local services, including education, libraries and business. That gives a framework within which local initiatives can flourish and can continue to have an impact after the year has officially ended in August.
    Mr. Marsden: I thank my hon. Friend the Minister for that answer. Does she agree that good local education authorities have a key role in delivering the link between literacy in the home and literacy in school through family initiatives? Will she therefore join me in applauding the initiative of Blackpool council in appointing a reader-in-residence, Dr. Charles Bennett, a mature student and poet, whose role will be to deliver community learning projects in schools, after-school clubs, youth clubs and community centres? Is not that an excellent way to move forward? Does she agree that imaginative and historical literature can be prime sources for literacy schemes?
    Ms Morris: I add my congratulations on the initiatives in my hon. Friend's constituency. His local authority has

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    a good record on its work for the national year of reading. I was delighted recently to announce a further £7,000 to support local community initiatives in the Blackpool area. We perhaps differ about one thing: it is the role of not only local education authorities, but local authorities in general, to work on the national year of reading. The obligation to support our children in learning a love of reading and to support schools in the literacy strategy lies not only with local education authorities but with everyone, whatever their walk of life.
    Mr. John Hayes: Does the Minister think that the literacy project would be compromised by the projected widespread closure of public libraries? It is all very well for the Prime Minister yesterday, and the Minister today, to talk about literacy, but how can the scheme possibly be supported by such closures? What assessment has she made of their effect on opportunities for schools and children in areas such as North Yorkshire, Lincolnshire and elsewhere across the United Kingdom?
    Ms Morris: I have made no assessment of the effect of libraries because they are not my ministerial responsibility. I have assessed the £48 million that the Government have put into spending on books in schools. The hon. Gentleman must accept that more has been put into supporting literacy through teacher training, getting books to schools and facilities throughout the community, than was ever done under his Government.

    Labour Market Strategy
    Mr. Michael Clapham: What plans he has to introduce an intermediate labour market strategy. [68886]
    The Minister for Employment, Welfare to Work and Equal Opportunities (Mr. Andrew Smith): Intermediate labour market initiatives already play a part in the Government's overall employment policy and are especially helpful for people who are particularly disadvantaged in the open jobs market. Government funding already contributes to a number of successful projects up and down the country, and that will be extended through the recently announced employment zones.
    Mr. Clapham: I thank my right hon. Friend for that answer. He knows that there is much male unemployment
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    in the former steel and mining communities of south Yorkshire. We are talking about men in their 40s and 50s. Intermediate labour markets are one way of reintroducing such people to the formal labour market. Does his Department intend to evaluate some of the local community business projects within a regional framework?
    Mr. Smith: Very much so; we have been surveying experience of intermediate labour market projects both in this country and abroad. As soon as we have the results, they will be published—within the next month or two, I hope. The new deal 25-plus pilots have a specific remit to provide extra help for older unemployed people to get them back into work. As a result of the strategic responsibilities of the regional development agencies and work under the coalfields communities initiative, I expect more programmes to help precisely the people whom my hon. Friend described. They have had a rough deal in the past and deserve help from the Government. I hope that they will get it.
    Mr. Nigel Evans: What role will deregulation play in the Government's strategy? It is not only the 48-hour directive or the minimum wage; what role will there be for cutting bureaucracy, rules and regulations for businesses so that they can employ more people? When will Ministers start properly to think through the implications of directives for the labour market and their impact in this country before they sign up to them?
    Mr. Smith: This Government, not the previous one, have had written into the European employment guidelines a commitment not only to examine new European proposals to ensure that we minimise the regulatory burden and generate jobs, but to re-examine the proposals previously signed up to, including those signed up to by the Conservative Government. As part of our employment generation programmes, such as enterprise development in employment zones, we are applying the benefits of the cuts in bureaucracy and regulation that my colleagues in the Department of Trade and Industry are examining to stimulate the formation of new businesses.
    Moreover, it is this Government who, unlike our predecessors, are developing self-employment opportunities through the new deal, which people would have been denied under the Conservatives because of that Government's unreadiness to provide effective help into self-employment and business development for unemployed people.

Gibraltar
12.30 pm
Mr. Michael Howard(by private notice): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement—[Interruption.]
Madam Speaker: Order. The Minister is being asked a question, yet the Government Front Bench is in disorder—I have even got Liberal Democrats on the Government Front Bench!
Mr. Howard: Nothing should surprise us, Madam Speaker.
To continue, I ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on developments relating to Gibraltar.
The Minister of State, Foreign and Commonwealth Office (Ms Joyce Quin): Over the past year, there have been problems relating to Spanish fishing in British Gibraltar waters. Those began when fishermen started to enter the waters in larger numbers than had been tolerated in the past. We reached an understanding with the Spanish Government on the situation that had prevailed from 1991 to 1997, when fishing took place in moderation and the fishermen respected the authority of the Gibraltar law enforcement agencies. We agreed with the Spanish that we should revert to that situation.
Nevertheless, we faced continuing difficulties on the water. On 27 January, a Spanish fishing vessel was arrested. On 29 January, fishermen demonstrated at the border, preventing movement through it. We protested to the Spanish authorities about that. On 3 February, the fishermen and the Chief Minister of Gibraltar reached an agreement that satisfied them both, building on the understanding we had reached with Spain. Those new arrangements have been working well in practice.
The Spanish Government were unhappy that the Chief Minister of Gibraltar had struck a deal locally. We began to see unjustifiably long delays at the border. We have protested to the Spanish authorities. The Spanish Foreign Minister has also talked about the possibility of refusing to accept Gibraltar driving licences, and has speculated about banning civil overflights to and from Gibraltar. My right hon. Friend the Foreign Secretary has today spoken to the Chief Minister of Gibraltar to assure him of our full support for Gibraltar on those points.
We shall continue to defend with determination Gibraltar's legitimate rights. We are today raising these matters with the Spanish Government through our ambassador in Madrid, and with the European Commission through our permanent representative in Brussels. We believe that it is in everyone's interests that relations between Spain, Britain and Gibraltar should improve; and that harassment is counterproductive.
Mr. Howard: In her answer, the Minister conspicuously failed to condemn unreservedly the latest Spanish threats to Gibraltar. Will she now do so? Will she confirm reports in this morning's newspapers that Spanish proposals for joint sovereignty over Gibraltar have been languishing in the Foreign Secretary's in-tray for more than a year? Is that another example of his not bothering
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to finish his paperwork? Should not those proposals have been rejected summarily as being wholly against the wishes of the people of Gibraltar? Will she also confirm this morning's reports that for several days, the Foreign Secretary has been trying in vain on his mobile phone to speak to his opposite number? We have heard enough about farce and failure at the Foreign Office during the past few days, but that really takes the biscuit.
Will the Minister tell us whether the protests to which she referred in her reply have been made at ambassadorial or ministerial level? If the former, does not it send entirely the wrong signal about the seriousness with which we take these matters? Can she give details of the agreement that was reached between the Foreign Secretary and his counterpart in October, which she conspicuously failed to supply when she responded on 4 February to my written question on this topic?
Does my right hon. Friend recall the way in which the Government were, on their own account, duped by the Spanish Government in negotiations on the treaty of Amsterdam? Does she recall the Foreign Secretary's U-turn and surrender in negotiations on Spanish entry into the integrated military command of NATO? Is not the whole pattern of this Government's dealings with Spain one of equivocation, retreat and surrender? Will she now display the resolve and determination that are overdue and necessary to deal with this matter?
Mr. Dennis Skinner: You can always trust him to go over the top.
Ms Quin: My hon. Friend is quite right.
It is of some regret to me that the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) has dealt with an issue that has so often commanded cross-party agreement in such a manner. All parties in the House have supported the Gibraltar constitution; we support it very strongly. Indeed, I have spoken with and appreciate the work of some of my Conservative predecessors on this issue, including Lord Garel-Jones and, of course, Lord Hurd, when he was Foreign Secretary. Unfortunately, the right hon. and learned Gentleman seems to disagree with his predecessors as well as engaging in puerile attacks on us.
The right hon. and learned Gentleman asked several questions, with which I should like to deal. I want to stress first that, overall, we have a good relationship with Spain, as has been evident in many recent initiatives, including the statements issued by the two Prime Ministers on a range of European and employment issues. However, at the same time, we have pursued very vigorously with our Spanish counterparts the need to regulate properly fishing activity around Gibraltar, and to ensure that border delays are kept to a minimum and the Spanish authorities respect the position of the people of Gibraltar.
The right hon. and learned Gentleman seems, somehow, to want it both ways—breathing fire and brimstone on the one hand, and telling us that we must sort things out on the other. We are confident that we have put enormous effort into resolving this situation. My right hon. Friend the Secretary of State and I have worked with both the Governor and the Chief Minister of Gibraltar to look at ways of resolving the situation. We therefore welcomed the agreement that the Chief Minister concluded with the fishermen because we believed that it built on our understanding with Spain. We stick very strongly to that point of view.

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The right hon. and learned Gentleman rather astonishingly asked what we were doing about the situation, and tried to pretend that we were doing nothing, even though, in my statement, I announced the two initiatives that we have taken today with the Spanish Government and the European Commission. He seemed to avoid that completely.
The right hon. and learned Gentleman also asked about the October agreement. He ought to know that that agreement was largely an affirmation of traditional fishing practices in that area, which between 1991 and 1997 had worked well and to the benefit of both sides. When that harmonious traditional activity was undermined by the presence of extra vessels, action was taken. We welcomed the arrest in January of the vessel that was clearly violating the understanding that we had reached with Spain. As I said, we believed that the agreement concluded by the Chief Minister was greatly to be welcomed and provided a way forward. I cannot think offhand of a word that means the opposite of statesmanship, but whatever it is, it certainly applies to the right hon. and learned Gentleman.
Mr. Ted Rowlands: Have not the actions of the Spanish authorities breached European law? If so, what specific action will the Government take?
Ms Quin: Indeed, European law is the reason for our approach today to the President of the European Commission. The threat not to accept Gibraltar's driving licences directly contravenes the relevant EU directive, so we intend urgently to pursue the matter with the Commission. It is our understanding that the relevant EU directive would be breached if the Spanish authorities refused to accept those driving licences.
Mr. David Heath: Are not the actions of the Spanish Government in this affair entirely unacceptable, particularly in view of the successful negotiation and resolution of the fishing dispute? Are not those actions particularly ironic on the part of a state with enclaves of its own in north Africa, and do they not undermine the more constructive overtures by the Spanish Government in recent years? Will the Minister continue, as she has been doing, to make it clear to Spain that Gibraltar's future will be based on the wishes of Gibraltarians, not crude bullying? Will she work to assure the status of Gibraltar within the European Union? Lastly, will she seek ways to provide proper representation of Gibraltar in the European Parliament?
Ms Quin: I welcome the thrust of the hon. Gentleman's questions, which was a good deal more constructive than that of the official Opposition spokesman, the right hon. and learned Member for Folkestone and Hythe. We believe that the Spanish action is unacceptable and, importantly, counterproductive. There is a great deal to be gained by co-operation between Gibraltar and, in particular, the neighbouring regions of Spain. Such actions by the centre rather undermine the cause of that co-operation, which we hold dear.
Mr. David Winnick: Leaving aside the characteristic attitude of the shadow Foreign Secretary, is it not deplorable that a Spanish Government
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are reverting to the provocative attitude of the Franco regime? When Spain became a democracy, one hoped that its attitude would be very different. If Spain takes the view, which I understand, that it wants closer relations with Gibraltar, surely it must work in such a way as to persuade the majority of people in Gibraltar that that should be the case. At the moment, all the evidence reveals that 98 per cent. of them want to stay as they are. I hope that the position of the House is to defend the right of the people of Gibraltar to do precisely what they want—the right to self-determination.
Ms Quin: My hon. Friend makes valid points and I agree with his approach. Certainly in the post-colonial world, the wishes and consent of the governed are absolutely paramount in any constitutional arrangements. That is clearly spelt out in the Gibraltar constitution, and the Government hold very firmly to that commitment. It is obviously right to say that any change in Gibraltar's status could be granted only if it had the wholehearted consent of Gibraltarians. That is why persuasion and a policy of friendship and openness are by far the most successful approach, particularly as we are all partners in the European Union and other European organisations.
Sir Teddy Taylor: The House and the people of Gibraltar were told in 1972 that the agonies that they suffered in 1967 could not be repeated because of what were called the tight rules and strict procedures of the European Union. Now that Spain is breaking the law on frontier control, and threatening to break the law on passports and driving licences, will the Minister say exactly what their friends in Brussels can do? Is it not a little silly to talk about directives when Spain is ignoring dozens of directives and having legal proceedings taken against it in 25 cases? Will the Minister tell the people of Gibraltar what Europe can do?
Finally, will the Minister at least give the assurance—I am sure that she will—that the Government will not let down or sell out the people of Gibraltar, and that in no way will they allow Gibraltar to be put under the rule of Spain against the people's wishes?
Ms Quin: In response to the hon. Gentleman's last point, I hope he will agree that I, my right hon. Friend the Foreign Secretary and the Government generally have given that assurance on many occasions. Indeed, the Prime Minister gave that assurance only last week in response to a question from the hon. Gentleman at Prime Minister's Question Time.
There are all kinds of ways in which EU directives have been broken. We can have legal recourse to redress. However, we believe that by far the best route in the immediate future is to do what we are doing—to protest to the European Commission and ask it to remind Spain and other countries of their responsibilities under directives by which they have agreed to be bound.
Dr. Norman A. Godman: My right hon. Friend is right to emphasise that the Foreign Office will stick to the principle of consent. That principle underlines the Good Friday agreement. Madrid should be told that no change can take place outside the principle of consent.
The fishermen are not fishing out of purse-seiners such as those that operate out of Fraserburgh and Peterhead. They are small-boat fishermen, and it is right that that

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fisheries dispute is settled locally. Madrid should be told that the best form of fisheries management is regional management.
Ms Quin: My hon. Friend makes an important point—not surprisingly, with his knowledge of the fishing industry and the arrangements that work in practice. We believe that such a local agreement would reinforce the understanding that Britain and Spain had reached. We also believe that, understandably, the local agreement addresses effectively the concerns of local residents in Gibraltar. We are speaking of a fairly small area where fishing activity—especially if it takes place at night, as much of it does—can cause noise and aggravation to local residents, as well as not being in conformity with the understanding that had been reached.
I am glad that the local authorities and the police in Gibraltar took the action that they did, but I am also glad that the Chief Minister was able to back up that action with the agreement that was subsequently reached.
Mr. Michael Colvin: Some of us have a certain sympathy for the Minister of State, because we know that she is not getting the support that she should be getting from the Foreign Secretary.
With regard to the blockade of Gibraltar, which is a clear breach of EU law, does the right hon. Lady agree that that is a test of the European Commission's ability to enforce its own laws? With regard to the fishing and the welcome local agreement, what hope is there of the House of Assembly passing ordinances to enshrine that agreement in law? If that were done, would the Government agree to the dispatch of a fisheries protection vessel to the Admiralty waters around Gibraltar to ensure that that law is enforced?
Ms Quin: On the last point, if the agreement works as we hope it will, and if it is subsequently backed up by legislation in the Gibraltar Assembly in the way that we hope, a fisheries protection vessel would not be needed.
I am disappointed and somewhat surprised by the hon. Gentleman's initial comments. He, along with colleagues from all parties, has met me through the all-party Gibraltar group in the House. I have also met him as an officer of that group. On each occasion, I have stressed to him the way in which my right hon. Friend the Foreign Secretary and I have been working together on this issue. The hon. Gentleman knows that a great deal of effort has been put in by both of us, as well as by the Governor, to address the situation. Those comments do the hon. Gentleman no service.
Mr. Lindsay Hoyle: Is the Minister aware of the plight of three of my constituents who were trapped on the Spanish side of the customs, not being able to enter Spain nor being allowed to go back into Gibraltar, for 13 hours? As Spain was clearly in breach of European law, I hope that my right hon. Friend will seek compensation for my constituents and also for Gibraltar. Has not the time come for that fisheries protection vessel to go down to Gibraltar? Let us take off the kid gloves and ensure that we get the right deal for our people in the United Kingdom and Gibraltar.
Ms Quin: There certainly have been cases where people have suffered as a result of delays at the border.
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There was one instance of a husband trying to cross the border to reach his wife, who was about to give birth to their child, so there have been some human tragedies and human difficulties associated with the delays that have been imposed at the border. Some of the delays, it has to be said, were caused by the fishermen blockading the border rather than by the Spanish authorities. Given the different types of incidents that have occurred, it would be helpful if my hon. Friend wrote to me and I could then investigate the incident to which he referred.
Mr. Andrew Tyrie: I was there when the border was closed on 29 January and I saw some appalling behaviour by the Spanish police. Many people in Gibraltar believe that the British are engaged in negotiations to try to create some kind of counterweight to the Franco-German alliance through an Anglo-Spanish alliance, and that if Gibraltar has to pay the price for achieving that alliance, so be it.[Interruption.] That is what people in Gibraltar think.
Is the Minister aware that many people think that the line that the Government have been taking since they came to power is very naive and smacks of appeasement? Recent events still do not seem to have got across to the Foreign Office. The Spanish understand only strength; they do not understand polite reminders, via the European Commission, to obey directives. They are bullfighting; the Foreign Office is playing cricket. Is not the right thing to do in the fishing dispute to send a naval vessel capable of enforcing our rights and our sovereignty in our territorial waters?
Ms Quin: The hon. Gentleman's version is a caricature of events. He may have visited Gibraltar, but he is giving us a very selective account of events. His claims about the Foreign Office are completely incorrect. He was not in the Foreign Office when we were discussing these issues, so he cannot claim to have been there. Let me say clearly that there is nothing stealthy or underhand about our approach. If I have to say it again, I will do so: we remain fully committed to the pledge in the Gibraltar constitution.
Mr. Bill Rammell: Does the Minister agree that, in reality, there is consensus on the way that we should deal with this situation? Attempts by Conservative Members to play politics with the issue do them an enormous disservice. Had Labour Members conducted themselves in such a way in opposition, they would rightly have been accused of irresponsibility. On the substance of the issue, will she comment on—and, I hope, refute—the spurious allegations that Gibraltar has contributed towards the conflict by going against European Union directives?
Ms Quin: I strongly endorse my hon. Friend's comments. I should like the issue to be approached within a cross-party consensus, but I am certainly prepared to defend very strongly the Government's record on it. I am grateful to him for mentioning EU directives, because we have received no official communication from Spain claiming that Gibraltar is in breach of various EU directives. Fifty-one are listed, and that list has been sent to the Commission. That allegation is ill-founded.
I have information that, of the 51 directives listed, 31 have been transposed by Gibraltar. Of the remaining 20, seven are not applicable because of Gibraltar's EU status, and two do not require transposition,

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because Gibraltar does not have the relevant facilities. A further seven directives are in the final stages of transposition, with draft legislation complete or almost complete. Gibraltar's record is extremely satisfactory in that respect. Given the commitments that the legislative Assembly has, and the size of Gibraltar, it has done a good job in transposing those directives into legislation.
Mr. Christopher Gill: The Minister will be aware of the popular perception in Gibraltar that the British Government are not prepared to stand up to the Spanish Government. Will she assure the House that the Foreign Office will abandon its supine policy of doing nothing that upsets the Spanish and will recognise its true responsibility, which is to protect British interests and British subjects?
Ms Quin: I cannot recommend that the Foreign Office abandons a supine policy that it did not adopt in the first place.
Mr. John Wilkinson: As we are one of the largest contributors to the European Union and Spain is the biggest net recipient by far, would it not concentrate the Spanish mind wonderfully if Her Majesty's Government said that they would cut off the supply to Brussels?
Ms Quin: The Government would be unwise to deal bilaterally with issues that are the subject of negotiation among the 15 member countries of the European Union. As the hon. Gentleman knows, we are currently negotiating in the European Union on Agenda 2000. We are strongly defending our interests in those negotiations, and we are promoting new ideas and proposals for reform of the European Union.
Mr. Howard: Will the Minister reply to just one of the questions that I put to her earlier, which she completely ignored? Why has the Foreign Secretary not yet rejected the proposals from Spain for joint sovereignty over Gibraltar?
Ms Quin: We have a framework for discussing issues with Spain, which was adopted by the previous Government, and we have continued that practice. Those proposals will be examined within that framework without, in any sense, undermining the commitment in the Gibraltar constitution to which many hon. Members on both sides of the House have rightly referred.

Business of the House
12.57 pm
Sir George Young: Will the Leader of the House tell us the business of the House for next week?
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week will be as follows:
MONDAY 15 FEBRUARY—Consideration in Committee of the House of Lords Bill [1st Day]
TUESDAY 16 FEBRUARY—Consideration in Committee of the House of Lords Bill [2nd Day]
The provisional business for the following week will be as follows:
MONDAY 22 FEBRUARY—Second Reading of the Immigration and Asylum Bill.
Motion on the Northern Ireland Arms Decommissioning Act 1997. (Amnesty Period) Order.
TUESDAY 23 FEBRUARY—Second Reading of the Welfare Reform and Pensions Bill.
WEDNESDAY 24 FEBRUARY—Until 12.30 pm, debate on the Third Report from the Northern Ireland Affairs Committee on Composition, Recruitment and Training of the RUC, followed by a debate on the Sixth Report from the Agriculture Committee on Flood and Coastal Defence. Followed by debates on the motion for the Adjournment of the House.
Remaining stages of the Social Security Contributions (Transfer of Functions, etc) Bill [Lords].
Remaining stages of the Rating (Valuation) Bill.
The Chairman of Ways and Means is expected to name opposed private business for consideration at 7 o'clock.
THURSDAY 25 FEBRUARY—Debate on Welsh Affairs on a motion for the Adjournment of the House.
FRIDAY 26 FEBRUARY—Private Members' Bills.
The House will also wish to know that on Monday 15 February there will be a debate on Agenda 2000: Reform of the Common Agricultural Policy in European Standing Committee A. [Mr. Rooker].
On Wednesday 24 February there will be a debate on VAT Fraud in Intra-Community Trade, the Independent Fraud Office and the Court of Auditors Annual Report for 1997 in European Standing Committee B.[Ms Hewitt]. Details of the relevant documents will be given in the Official Report.
[Monday 15th February:
European Standing Committee A—Relevant European Committee document: Unnumbered EM, submitted by MAFF on 20 November 1998; Agenda 2000:Refonn of the Common Agricultural Policy. Relevant European Scrutiny Committee reports:HC 34-ii (1998–99) and HC 34-ix (1998–99).
Wednesday 24 February:
European Standing Committee B—Relevant European Community Document: OJC 349, Court of Auditors report for 1997;14031/98, Independent Fraud Office:10786/98, VAT Fraud in intra-community trade;Relevant European Scrutiny Committee reports:HC 34-vi, HC 34-vii and HC 34-viii (1998–99).]
Sir George Young: The House is grateful to the right hon. Lady for the announcement of next week's business, and for an indication of business for the following week. Will she find time for a debate on the Foreign Affairs Select Committee report on the Sierra Leone fiasco? Not only does the report contain devastating criticism of the Foreign Office, but the Government have made it clear that they dispute the findings. Does that not make it even more imperative to debate the report at an early stage, so that the House can decide for itself whom to believe?
Can we also debate the Defence Select Committee report on the Territorial Army? Will the right hon. Lady halt the growing practice of Ministers rubbishing Select Committee reports in advance? Before the Defence Select Committee report was even published, the Minister for the Armed Forces said that he would reject any criticism. Will the right hon. Lady condemn that contemptuous approach to the House and its Select Committees?
The Greater London Authority Bill is in Committee again next week. I understand that it is being substantially amended, which suggests either a lack of preparation or some change in policy. May we have an assurance that the Committee will have adequate time to consider those substantial amendments before they are debated?
I understand that the Chancellor will shortly be publishing a document about the euro—the outline national changeover plan—an important publication on an important subject. Can the right hon. Lady confirm that the Chancellor will make a statement to the House on that occasion? Will he be able to explain why Mr. Oskar Lafontaine is able to write an article in today's The Daily Telegraph saying that he is in step with the Prime Minister on Europe, although, yesterday, one Minister endorsed criticism of the German presidency for its proposals to tax the British art market?
In respect of the White Paper on the House of Lords, will the right hon. Lady reflect on what she said to my hon. Friend the Member for South Staffordshire (Sir P. Cormack) and me, and agree that it would be right for the House to debate such an important constitutional reform in Government time?
Finally, can we expect next week a statement on the talks on Kosovo?
Mrs. Beckett: The right hon. Gentleman asked me for an opportunity to debate the Foreign Affairs Committee report. As he said, it has only just appeared, and the House has already had an opportunity to debate the issues fully. The Government will, of course, give careful consideration to both the report and our reaction to it, but I understand that the report does not take us much further than the position that we reached at the end of the Legg inquiry. Nevertheless, I undertake to consider that request.
The right hon. Gentleman said that it was necessary to discuss those matters so that we could decide whom to believe. As I have said, I understand that little new has emerged from the report, other than what was known on the publication of the Legg report. The question of whom to believe therefore does not arise in the way implied by the right hon. Gentleman.
As for what the right hon. Gentleman said about the Territorial Army, I did not hear the remarks to which he referred, and I would be very surprised if my hon. Friend the Minister for the Armed Forces had rejected the findings of a report. I am sure that he would have said
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what is the case—that there has been full consultation about the Territorial Army, which will provide the background to the Government's reaction.
I share some of the right hon. Gentleman's concern about over-speedy reaction to Select Committee reports, which should indeed be weighed carefully by all hon. Members. I can only say that, if the Opposition perpetuate the practice—for instance, of the shadow Foreign Secretary—of preceding every Select Committee report with a demand for the immediate resignation of the relevant Minister, it is only natural for Ministers to respond. Perhaps each of us can encourage our colleagues not to judge reports before they are published; but the hysterical reaction of Conservative Front Benchers does nothing to encourage such a measured approach.
As for the Greater London Authority Bill, I, like the right hon. Gentleman, dislike the practice that makes extensive amendment necessary during the passage of Bills. That practice grew up under, and was used a good deal by, the last Government. I hope that, following the discussions and proposals of the Modernisation Committee, we shall be able to reduce it gradually, but that will clearly not be possible in the short term. However, I expect that adequate time for consideration of such matters will be available. I remind the right hon. Gentleman that we have not yet resorted to the last Government's practice of guillotining legislation and then introducing substantial new clauses.
The right hon. Gentleman asked for a statement on the changeover plan. I will bear his remarks in mind. As for the remarks of Minister Lafontaine, he says a number of extremely interesting things, none of which is the direct responsibility of this Government; but we shall bear in mind the right hon. Gentleman's request for a statement when the document is published.
I hear what the right hon. Gentleman says about the White Paper on reform of the House of Lords. I shall certainly undertake to consider the matter through the usual channels. If we had some indication—which, of course, will not be possible at this stage as we have not quite yet embarked on the Committee stage—of what the Opposition feel will not have been covered in the Committee debates, that would help us in our consideration of his request. It will obviously help us in considering the matter.
I cannot promise a statement on Kosovo next week. It is not clear whether it would be right to make a statement at that point, but I assure the right hon. Gentleman that my right hon. Friend the Foreign Secretary is keeping the matter under review. I am sure that, if there is something of substance to announce, he will be anxious to do so.
Ms Jean Corston: Will my right hon. Friend find time for an early debate on the rights of bereaved parents or relatives either to have knowledge of, or to give consent for, the removal of vital organs from people who die in hospital? That arises from today's news that at least 170 of the babies and children who died in what is now called the Bristol heart operation scandal were buried without their hearts, without the knowledge of parents. As one parent has said today:
"It is bad enough losing a child. To find out you've not buried them completely is just terrible".

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One can only imagine parents' grief. The hospital says that it has behaved in accordance with correct procedure. If that is true, can we re-examine the procedure?
Mrs. Beckett: I know that my hon. Friend has been engaged in a long-running campaign on clinical standards and improving health services for her constituents in Bristol. She and our other colleagues in the city are anxious about those matters. It is a difficult and sensitive situation. We can only sympathise with the parents who find themselves yet again at the centre of a media storm that is focusing on what must have been some of the most dreadful events in their lives. I say only that it is my understanding that the Royal College of Pathologists is discussing with the Coroners Society of England and Wales what guidelines should exist in that difficult area, and that Department of Health officials are keeping in touch with developments.
When there has been, for example, a post mortem—understandably, that happened in many of the Bristol cases—it can be standard practice for such organs to be kept, but it is a difficult and delicate matter. I share my hon. Friend's view that it is important that there is openness and proper information—a view that, I think, everyone will share. I assure her that the matter will be looked at, perhaps even by the inquiry that is taking place.
Mr. Paul Tyler: On behalf of many other parents in other parts of the south-west who have similar concerns to those of the hon. Member for Bristol, East (Ms Corston), I endorse the view that the issue of parental permission is very important. I hope that the Leader of the House will be able to assure us that it will be attended to.
We endorse the request for a debate in Government time on the Foreign Affairs Select Committee report. We do not take the view—nor do any members of the Committee, I understand, from any party—that it simply duplicates the work of the Legg committee. It is important that the House should be given an opportunity to debate its own Select Committee report.
On another important issue for our constituents, did the Leader of the House hear this morning's comment by the spokesman for the train operating companies on the further deterioration in the quality and reliability of train services? He said:
"The rate of it getting worse is slowing down."
Certainly the trains are slowing down, but can she give us an explicit assurance that the Deputy Prime Minister will come to the House and make a statement, preferably in the next two weeks, on his legislative plans for the Strategic Rail Authority, and on what he expects to achieve at the so-called rail summit that he is holding with the various companies later this month?
I am sure that the Leader of the House shares my disappointment that the right hon. Member for North-West Hampshire (Sir G. Young) did not use the opportunity, as one of the great train robbers himself, to apologise on behalf of the other privateers.
Mrs. Beckett: On the issue of permission, of course, those are issues that will be looked at, but, as the hon. Gentleman may appreciate, no one owns someone else's body and those matters can be difficult. They are delicate and sometimes involve both distress and genuine
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difficulty in the right decisions being made. I shall draw his remarks to the attention of my right hon. Friend the Secretary of State for Health. I do not know whether I can give the commitment that the hon. Gentleman seeks, but I share the widely held view that there should be proper information on, and understanding of, what is happening and why.
The hon. Gentleman endorsed the call for a debate on the report of the Foreign Affairs Committee. I take the point that he shares the view that there should be such a debate. I reiterate that the Government will look carefully at the Select Committee report, but I cannot give an undertaking today that there will be a further debate on matters that we have already debated extensively.
I cannot assure the hon. Gentleman that my right hon. Friend the Deputy Prime Minister will make a statement in the next two weeks on what is happening in the rail service. I am not sure whether it is sensible to ask him to make a statement before the national rail summit on what he hopes to achieve there. He will be anxious to keep the House informed on his plans for the Strategic Rail Authority and on the national rail summit. He shares the concern and anger of many hon. Members about the deterioration of our rail services. He is anxious to address those issues and keep the House informed.
Mr. Gordon Prentice: Since our debate on 10 November last year on the difficulties facing manufacturing industry, my constituency, which is heavily dependent on manufacturing, has suffered a steady haemorrhaging of jobs from manufacturing, including 350 jobs from the Lear corporation and, only yesterday, 450 jobs from Buoyant Upholstery. I know that the Government are trying to do their bit. Interest rates were 7.5 per cent. in June last year and are now down to 5.5 per cent. I am sure that there will be a recovery in the housing market and people will start spending money on what the Americans refer to as "big ticket" items, but, for areas such as north-east Lancashire, which depends heavily on manufacturing, there is a strong case for an early debate on the issue.
Mrs. Beckett: I know of my hon. Friend's long-standing concern about, and support for, manufacturing industry in his constituency and throughout the United Kingdom. He and I, together with some honourable Conservatives, advocated the cause of manufacturing industry when the Conservative party was trying actively to destroy it. I recognise the difficulties. My hon. Friend rightly said that the Government's economic policy is directed at trying to bring about the improvements in trading conditions that will help in the long term. However, he will know, as we all do, that much of the current difficulty results from problems experienced across the world. That is why it is important to ensure the right countervailing action in international circles. The Government are addressing that.
Sir Peter Emery: I have two questions for the right hon. Lady. The first is entirely non-political and concerns the House. I am sorry that I have not given her notice of it. Will she consider the response by Ministers to written questions for a named day? She will recall the recommendations of the Procedure Committee, which were accepted 10 or 12 years ago, on the Government's practice of postponing answers to written

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questions for a long time. Will she consider the possibility of a statement on the fact that questions for a named day are falling into the same pattern time and again, with answers such as, " I shall reply to the hon. Member as soon as possible"?
Madam Speaker: Order. The right hon. Gentleman is asking the Leader of the House a question on a matter for which she is not responsible at the Dispatch Box today. We are dealing with forthcoming business. She is not answering questions as President of the Council. If the right hon. Gentleman is seeking a statement, that is another matter, but he is getting into deep water. I think that the right hon. Lady has the gist of his question. I hope that his second question is about business.
Sir Peter Emery: I wanted a statement next week on the issue.
Madam Speaker: The right hon. Lady has got the point.
Sir Peter Emery: It is quite obvious. I should not be doing it otherwise.
My second question is on the Foreign Affairs Committee report. May we have a full day's debate? I was most concerned to hear the right hon. Lady say that the report contains "nothing new". None of the Committee members believes that. Indeed, had the right hon. Lady read the report instead of repeating it at second hand, she would not take that view. She said that the report has been debated extensively, but that is not accurate. There has been no debate on the report, which goes much further than foreign affairs and addresses the way in which Parliament holds the Executive to account. That, as much as the report, needs to be debated.
Mrs. Beckett: On the right hon. Gentleman's first question, I cannot promise him a statement next week. Perhaps the issue can be addressed at President of the Council questions. I know that there are genuine difficulties, particularly when hon. Members ask for a substantial amount of information to be provided within a short deadline. However, I shall look into whether there is a particular problem.
Secondly, the right hon. Gentleman asked me again about the report by the Select Committee on Foreign Affairs. We have had a full debate on the issue. The right hon. Gentleman says that there has been no debate on the report and the way in which Parliament can hold the Executive to account. However, an entirely unprecedented amount of information was made available and an unprecedented degree of access was allowed. I do not mean to be discourteous to the right hon. Gentleman, but I very much doubt that that would have been allowed when he and his colleagues were at the Foreign Office, so the Government have already addressed the concerns of Parliament.
Mr. John Cryer: Could we have a second debate on the Jenkins report on electoral reform? When we last debated that report, about 50 Back-Bench Members applied to speak, but only a handful were able
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to do so. I did not have the opportunity to speak, so, along with many of my hon. Friends, I should like a second opportunity to debate the issue and to condemn the report as an attack on democratic accountability.
Mrs. Beckett: I fear that I cannot undertake to offer my hon. Friend such a debate in the near future, but I have heard and understood his comments. There is a great deal of concern and I know that many hon. Members wish to express their views on the matter. No doubt, they will have such an opportunity at some point.
Mr. Richard Shepherd: I join my right hon. Friend the Member for North-West Hampshire (Sir G. Young) in requesting a debate on the modernisation of Parliament and the reform of the House of Lords. As is consonant with our procedures, the right hon. Lady well knows that a major White Paper on constitutional reform does not require consultation through the usual channels, but it is a matter of honour for the Government to conduct such a debate. To argue that some of the proposals in the White Paper may be discussed in respect of a public Bill, which is narrowly drawn, on removing the hereditary principle from the House of Lord means that many of the issues in the White Paper could be ruled out of order by the Chair.
Mrs. Beckett: The hon. Gentleman's record of concern for the business of the House is well known and recognised by hon. Members on both sides of the House, but, with great respect, it is a little strong for him to say that debating a White Paper is a matter of honour. We have not followed the usual procedure for White Papers, which are often issued substantially in advance of legislation; in this case, the White Paper has been issued alongside the legislation, but it is a special case. However, I take the hon. Gentleman's point that some of the issues raised in the White Paper may not be touched on during the debate. I do not wish to anticipate what will happen in the debate, but, as I hope that he will have observed, I undertook to consider the matter through the usual channels. That is the right way to proceed.
Dr. Norman A. Godman: May we have an early statement on changes to the code of conduct governing the passage of submarines through our traditional fishing grounds? I remind my right hon. Friend that the previous Government introduced the code of practice following the tragic loss of Carradale fishing vessel, the Antares, with its four-man crew, long after hon. Members such as me had called for such a code of conduct. Allegations have been made concerning two incidents late last year involving breaches of the code and I am still awaiting answers to parliamentary questions that I tabled a considerable time ago. I am making a reasonable request for a substantial response to the allegations concerning those two breaches of the code of conduct.
Mrs. Beckett: I am sorry to hear that my hon. Friend, who takes a great and determined interest in those matters, has not yet had a response to his questions. I cannot offer him time for a debate or a statement in the near future, but I certainly undertake to take up with the relevant

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Ministers the issues that he raised, because I know that they share his concern and will be anxious to give a response.
Rev. Martin Smyth: Can the Leader of the House arrange a statement in the next two weeks on social security payments in different parts of the United Kingdom, especially when we are having more devolution? A lady came to live in my constituency in October, having been on disability living allowance in England. She contacted me yesterday because she has been turned down for the allowance on the ground that she has gone abroad.
Mrs. Beckett: I undertake to make inquiries and draw the case to the attention of the relevant Minister. Without knowing the particular circumstances of the case, I cannot be confident about how it might be handled, but I undertake to ensure that the relevant Department is aware of it.
Dr. George Turner: Can my right hon. Friend arrange a debate on the progress, or lack of it, in digital television? For more than a decade, my constituents have had to put up with second and third-grade reception of analogue television. They are extremely annoyed that the technical opportunities offered by the roll-out of digital television to give them decent reception have not been seized. People from Norfolk do not want to have to watch regional transmissions from Yorkshire. People in up to 40 or 50 constituencies are forced, if they want to watch digital television, to use Sky, which does not offer ITV channels. The whole issue needs to be properly examined. Will the Government at least make a statement on their policy, so that the broadcasters know where Government want them to go before we legislate?
Mrs. Beckett: I undertake to draw my hon. Friend's remarks to the attention of the relevant Department. I am well aware, from my own experience, of the difficulties in television reception in many parts of Norfolk and of some of the regional sensitivities that arise. I fear that there may be a little too much optimism about the speed at which digital television will become available, but the Government are certainly considering the issues. A consultation paper was published last year, I believe, and we are considering the responses.
Mrs. Eleanor Laing: Will the Leader of the House find time in the near future for a full debate on Gibraltar? While Gibraltar is in crisis and its people are being victimised by Spanish authorities, it must surely be right for Ministers to come to the House voluntarily—not as they have done today—and tell us what they intend to do to protect the democratic rights of British citizens. As we have seen today, a mere protest to the European Commission is simply not enough.
Mrs. Beckett: I cannot undertake to find time for such a debate in the near future. The Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for Gateshead, East and Washington, West (Ms Quin) made a full statement today. I wholly refute the hon. Lady's clear implication that we are in any way failing to stand by the people of Gibraltar. We are taking
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strong action that we hope and believe will ameliorate the problem and put an end to the difficulties. The Conservative party seems much more inclined to rattle sabres, shout and rant and call for the resignation of my right hon. Friend the Foreign Secretary. That will not help anybody.
Mr. Mike Hancock: In view of the bungling and incompetent way in which the Ministry of Defence handled the consultation process on the future of the Territorial Army, will the Leader of the House accede to the earlier request for a debate on that subject, based on the Defence Committee's report? Like the right hon. Member for North-West Hampshire (Sir G. Young), I am concerned by the way in which the Minister of State, in a cavalier and discourteous way, has rubbished the report in advance of publication.
In addition, will the Leader of the House put pressure on the Secretary of State for Health to make a statement in the House on the way in which hospital facilities—particularly accident and emergency services—will be provided, in view of the MOD's decision to close the Royal Naval hospital, Haslar?
Mrs. Beckett: Let me begin where the hon. Gentleman ended. He will know that, although the decision to close Haslar has been taken, it has long been made clear that that will be done only when suitable alternative arrangements are in place. He also referred to the future of the TA. As he said, the Defence Select Committee report has been published this morning, so there has been no time for anyone to study it. I have taken on board the request that has been made for a debate, but I fear that I cannot find time for one in the near future.
Mr. Crispin Blunt: Could the Leader of the House find time for an early debate on the relationship between the Executive and Select Committees? I am a member of the Defence Select Committee, which sat for a number of hours taking evidence, and also paid visits, to produce a report on the Territorial Army, which is being launched now by the Chairman of the Committee. Does she understand that it was outrageous for the Minister for the Armed Forces to say on "Today" this morning that the Government will reject any criticisms in the report? That, allied to the handling by the Prime Minister and Foreign Secretary of the report on Sierra Leone, shows that something is seriously wrong with the Executive's attitude to Committees of this House.
Mrs. Beckett: I utterly reject what the hon. Gentleman says. It is extremely important that there is a good and constructive relationship—which will sometimes be one of different and strongly expressed views—between Select Committees and the Government of the day. That is why the structure of Select Committees is as it is. They contain Members of all parties and reflect the composition of the House. That relationship is crucial to holding the Executive to account.
Difficulties are created if the Opposition use Select Committees simply as a ramp against the Government, and I have observed Opposition spokesmen using Select Committee reports in that way. It is better for Select Committees and the Government to have mutual respect for each other's roles. Often, that will lead to differing points of view. There is nothing wrong with that—indeed,

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it would be quite wrong if Select Committees always approved of what the Government did. These matters need delicate handling by both sides.
Mr. Owen Paterson: That last reply by the Leader of the House was absolutely astonishing, Madam Speaker. I was going to ask for a debate on fuel duties, but I am so amazed by that response that I shall not. As Members of the legislature, we are here to hold the Executive to account—that is what we are sent here for. Select Committee reports are all-party reports. How can the Leader of the House refuse a debate on the ground that it would be held for party-political advantage? Will she reconsider that now?
Mrs. Beckett: I do not think that the hon. Gentleman was listening to what his hon. Friend the Member for Reigate (Mr. Blunt) said. The hon. Gentleman asked me to arrange a debate not on the issue of an all-party report, but on the relationship between Select Committees and the Executive, on the spurious grounds—something that the Conservatives are continually alleging, on extremely flimsy evidence—that, in some way, the Government are in a different position in terms of being held to account by the Committees of the House. That is not the case, and it is not a matter that is worth spending the time of the House debating. That was the debate that I declined to have. I recognise that the Defence Select Committee report is serious. It will be looked at seriously by the Government, and we will produce our response in due course. However, a debate on the general relationship between Select Committees and the Executive is not merited at this time.
Mr. Eric Forth: Particularly in the light of what the Leader of the House has said in response to the last two questions, will she seriously and urgently review the whole matter of the Sierra Leone report? That report touches on the relationships that exist between the legislature and the Executive, between Select Committees and the House, and between Ministers and civil servants. Given the gravity of its findings, is it not highly urgent that this House should examine, first, what one of its own Committees has said and, secondly, what that reveals about relationships between Ministers and civil servants? Those are important and urgent matters, and they do not deserve to be treated in the way that the Leader of the House appears to have treated them so far.
Mrs. Beckett: With respect to the right hon. Gentleman, I have said about the Foreign Affairs Committee report only that, at first reading, it seems to us to cover similar ground as the report by the Legg inquiry. However, the Government will produce a full response to both Select Committee reports in due course. That is the proper way to behave and the Government will behave properly.
Mr. Nigel Evans: Will the Leader of the House arrange for an early statement on the Government's handling of the meningitis outbreaks? What are the Government's strategies, in both the short term and long term, to deal with the outbreaks,
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which have happened in south Wales, Scotland, the north-west of England, Southampton and elsewhere? We need to know what the short-term strategy is to ensure that organisations such as the Meningitis Research Foundation and the National Meningitis Trust get the proper resources so that they can fulfil their task of giving advice, guidance and counselling in areas where the outbreaks occur. There is also a need for long-term research to determine why outbreaks of meningitis in this country are at a 50-year high, and why the rate of incidence is three times as high as in the United States of America.
Mrs. Beckett: As the hon. Gentleman may be aware, a special investigation, chaired by the relevant medical authorities, is under way. He asked for a debate about the strategy for tackling the outbreaks, but I am sorry to say that the evidence appears to show that the problem does not lend itself to a strategy.
Mr. Evans: I wanted to know about both the short term and the long term.
Mrs. Beckett: I understand that, and those matters are being examined. The situation seems to change dramatically, and the cause of the disease is not well understood. That makes the problem particularly difficult, but I assure the hon. Gentleman that the Government—and the whole House—entirely share the concern that he has expressed.
Mr. John Bercow: Can we have a statement next week from the Secretary of State for Trade and Industry to discuss the Government's incompetence over the introduction of the working time regulations? As a result of those regulations, boys and girls who deliver newspapers will be eligible in law for up to four weeks' paid leave—which one assumes was not the Government's intention. Is the right hon. Lady aware that the National Federation of Retail Newsagents fears that delivery will end as a consequence, and that up to 10,000 jobs will be lost?
Finally, the right hon. Lady is a highly experienced parliamentarian: will she concede that the regulations were introduced, without prior parliamentary scrutiny, under the auspices of the lost and not lamented right hon. Member for Hartlepool (Mr. Mandelson)? He gave minimum notice but caused maximum hassle for business. Had the regulations' introduction not been so clumsy, would not this unholy mess have been avoided?
Mrs. Beckett: That would all be very interesting, but my understanding is that the working time regulations do not apply to paper boys and paper girls.
Mr. Bercow: That is wrong.
Mrs. Beckett: I am simply saying that that is my understanding. I know that the matter has appeared in the press today, but I am sure that all hon. Members will accept that that is not a guide. If the regulations do not apply, the question of incompetence does not arise. The matter is being considered most carefully, but my understanding is that there has been a misunderstanding.
Mr. Edward Leigh: The Leader of the House said that there will be debates the week after next

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on agriculture and Northern Ireland. The right hon. Lady is a distinguished and courteous parliamentarian: will she have a word with the Ministers winding up those debates to ensure that they adopt a self-denying ordinance and do not launch pre-emptive strikes—friendly fire on members of Select Committees—before those committees publish reports? That is what the Minister for the Armed Forces did today. According to Teletext, the Minister
"would reject any criticism of the Government by the Committee."
Surely the normal convention is that Ministers say on the day of publication that proposals will be carefully considered. Our request is reasonable. Surely the Government do not want to be accused of packing Committees with pager poodles, but want independently minded Committees.
Mrs. Beckett: It is self-evident that the Committees are not packed with poodles. My understanding is that the remarks made by my hon. Friend the Minister for the Armed Forces were directed at suggestions that there had been inadequate consultation. That is a different matter from the main substance of the report.
I entirely share the view of the hon. Member for Gainsborough (Mr. Leigh) that it is right and proper that Select Committee reports should be given the weight that they deserve. They should be properly handled in the House, and it would be wise if hon. Members on both sides, in all circumstances, bore strongly in mind the convention that Select Committee reports should not be leaked or commented on in advance by anyone.
Mr. John Hayes: Given today's shocking news that hospital waiting lists rose in December by a further 12,000, will the right hon. Lady allow time for an early debate on that subject? She will recall, as many people do, that the Government made an early pledge on waiting lists. I carry a copy of their pledge card as a constant spur to my evangelisation of the case against the Government, and to remind me of how many promises they are breaking. A debate would allow the Government not only to acknowledge that an early pledge has turned into a broken promise—that much is clear—but to apologise for it to the House and to the people.
Mrs. Beckett: The hon. Gentleman's remarks are entirely ill-placed. It is neither shocking nor surprising that there was, most unfortunately, a slight increase in the waiting lists in December. As my right hon. Friend the Secretary of State for Health has pointed out, if we had
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continued to issue the figures on the basis used by the previous Government, the slight increase would have been concealed because the figures on the quarter went down. The Government are entirely on course to deliver on our pledge. I am confident—I am sure that the hon. Gentleman and his party will welcome this—that delivering on the pledge will be made all the easier by the response to the nurses' hotline asking people to come back to the health service. That hotline has already received 22,500 calls.
Mr. Shaun Woodward: The Leader of the House will be aware of affection for RAF Brize Norton, and of the important role that it plays in the life of the nation. She may also be aware that Ministry of Defence officials have given a briefing discussing its possible closure. However, she may not know that the Ministry of Defence was asked this morning to confirm or deny those reports, and officials said that they were not in a position to do so as discussion was taking place on whether RAF Brize Norton might close in future.
Will the Leader of the House find time for an urgent debate on the future of RAF Brize Norton, and on the future of military airfields in the south of England? That debate could bring an end to the uncertainty created by Ministry of Defence officials.
Mrs. Beckett: I was not aware of the report, and I am afraid that I cannot assist the hon. Gentleman by finding time urgently for a debate. I recognise that the matter is of great concern to his constituents, and to others in the south of England. Ministry of Defence Questions will be taken on Monday 22 February. If the hon. Gentleman is fortunate enough to catch your eye, Madam Speaker, he may be able to find some way of raising the matter then.
Mr. Anthony Steen: Has the Leader of the House taken a call since yesterday from the Prime Minister's office suggesting that a debate on the fisheries problem would be welcome and that the Prime Minister would like to participate in it because of his concern about the conservation issues that I have raised in well-researched and very penetrating questions? If the Prime Minister has not rung her, would she call his office to suggest tactfully that a debate would be well received?
Mrs. Beckett: I have spoken to the Prime Minister since yesterday, but I fear that the most pressing matter on his mind was not the call for an early debate on fisheries. However, I am confident that—as he said yesterday—my right hon. Friend is sympathetic to the concerns expressed by the hon. Gentleman.

Orders of the Day

  Local Government Finance (Wales)
  1.40 pm
  The Secretary of State for Wales (Mr. Alun Michael): I beg to move,
  That the Local Government Finance Report (Wales) 1999–2000 (HC 203), which was laid before this House on 3rd February, be approved.
  Madam Speaker: With this it will be convenient to discuss the following motions:
  That the Local Government Finance (Amendment) Report (Wales) 1998–1999 (HC 204), which was laid before this House on 3rd February, be approved.
  That the Special Grant Report (Wales) 1999 (HC 177), which was laid before this House on 28th January, be approved.
  Mr. Michael: The local government finance report contains my decisions on the local government revenue settlement for 1999–2000. It has been welcomed widely as the most helpful settlement for local government in Wales for many years. It is more generous than in previous years, but it also reflects our higher expectation of local government, the role of local government in meeting our commitment to improving education and other services, and our determination to achieve best value in the delivery of services and the outcomes we seek.
  The special grant report sets out the grant allocations of bus subsidy grant to local authorities for 1999–2000.
  Mr. John Smith: I warmly welcome this statement and the record increase in service spending in Wales. I welcome particularly the additional funding for transportation and buses. Will my right hon. Friend confirm that the Government are able to ensure that local authorities spend the additional funding on the additional services that are required? Just this week, my constituent Mr. Howard Done collapsed in Cowbridge. He is in his 80s and was waiting in the freezing cold for a bus that is subsidised by the additional transport subsidy. That bus, run by Shamrock Coaches, did not come and neither did a second bus. Poor Mr. Done collapsed, was taken into someone's home and then transported back to Barry. It is essential that funds go where they are needed.
  Mr. Michael: My hon. Friend raises a very important point. We must improve the quality of bus transport in rural areas, and I shall develop that issue in a moment.
  In the settlement, the Vale of Glamorgan area will receive an increase in bus grant of 128 per cent—or an additional £108,786—in the coming year, which is designed to address precisely the issues raised by my hon. Friend. I am sure that the local authority will be quick to take up issues concerning specific services and service efficiency. We shall enable the local authority to do more and provide the sorts of services to which my hon. Friend referred.
  The £5 million that has been allocated to local authorities in the special grant report is an increase of £2.75 million—or more than 120 per cent.—on the settlement this year, and is designed to provide additional support for bus services. Of that sum, £3 million will be
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  spent in support of rural bus services—an increase of 33 per cent. on the funding made available for such services in 1998–99. However, because the need for public transport is not confined to rural areas, the Under-Secretary of State for Wales, my hon. Friend the Member for Neath (Mr. Hain), and I have allocated a further £2 million and given councils the freedom to decide whether to spend it on urban or rural services.
  This funding will make a tremendous difference to bus services in Wales. It will provide up to 16 million additional bus kilometres—or 10 million miles in old money—which represents an increase of more than 60 per cent. in the provision of socially necessary services compared with the position in 1997–98 when no such grants were available from central Government. I expect councils to use this new money imaginatively and effectively.
  A related strand of our integrated transport policy concerns concessionary fares. From April, I expect all councils in Wales to operate schemes for pensioners that at least meet the minimum standard of £5 for a bus pass and half fare for bus travel. The increase in net total standard spending includes sufficient funds for that. Over the following two to three years, we intend to provide free concessionary travel for pensioners.
  The amendment report for 1998–99, the third of the reports to which I referred, replaces the revised report approved by the House on 11 February 1998. An error in the data on the number of secondary school pupils in Cardiff came to light last summer, and my predecessor decided that it should be corrected. I believe that he promised the House that it would be. Local authorities were consulted and no comments were received. Its correction means that Cardiff county council's entitlement to revenue support grant will be reduced by £171,000 and the entitlement of the other 21 authorities increased by a similar amount.
  I turn now to the details of the settlement for 1999–2000. Total standard spending, or TSS, net of specific grants, is general funding for local authority services. I propose to set net TSS for 1999–2000 at £2,986.6 million, an increase of 5.1 per cent. on 1998–99.
  Net TSS comprises £180.1 million for Welsh police authorities, £2,804.7 million in standard spending assessments for the 22 councils, and £1.8 million in allocations to specified bodies, such as the improvement and development agency for local government and the local government ombudsman. The increase in total police provision represents a rise of 2.2 per cent. on 1998–99 and includes the amount for police grant to be paid by my right hon. Friend the Home Secretary that was approved by the House on 4 February.
  Mr. Richard Livsey: The Secretary of State knows that the initial allowance for Dyfed-Powys police was 0.8 per cent., which is not enough to sustain the police service there. Has he done anything since the original announcement to improve the situation?
  Mr. Michael: I am coming to an aspect of that which lies within the responsibilities of the Welsh Office, but responsibility for police grant lies with the Home Office. The hon. Gentleman may know that when I was Minister of State at the Home Office, I instigated research on the

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  sparsity factor to address precisely that issue, which has been raised consistently by the Dyfed-Powys police. I understand that it is still hoped that the research will be completed in time to inform the next police grant settlement.
  I propose to provide £2,570.2 million of aggregate external finance, or AEF, net of specific grants. That is an increase in central Government grant support of 4.8 per cent. on 1998–99. AEF is made up of £1,890.2 million in revenue support grant, £656 million in redistributed non-domestic rates and £22.2 million for council tax reduction grant.
  As we promised in the White Paper "Local Voices", we are abolishing crude and universal capping. The Local Government Bill has been introduced and is in Committee. In line with the White Paper, I am not announcing capping principles in advance. I still have reserve powers to cap authorities if they do not budget prudently. I do not want to have to use my powers and will do so only as a last resort to protect tax payers from excessive council tax increases.
  The Welsh Local Government Association has agreed that this is a good settlement for local government in Wales, and that council tax increases should be lower this year than in previous years. This positive approach, and the good partnership that exists, should mean that confrontation can be avoided.
  Mr. Desmond Swayne: Will the Secretary of State help the House by giving at least some indication of the criteria he will use when deciding whether a council should be capped?
  Mr. Michael: No, I shall not: the hon. Gentleman has no constituency interest in a reply to that question. I have made it clear that I am working in co-operation with Welsh local authorities and that partnership is the right approach. Local authorities and, I am sure, Members of Parliament who represent Welsh constituencies understand the signal that is being given; which is that, as long as local authorities budget prudently and do not propose unreasonable increases, I do not intend to use the powers available to me.
  Mr. Dafydd Wigley: The Secretary of State emphasises that he is giving greater flexibility to local authorities, but does he accept that one area of the settlement in which flexibility has been taken away from local authorities is housing renovation? By taking a proportion of those funds into a central pool, the right hon. Gentleman has left local authorities such as mine in an uncertain position, now that they have lost £3.5 million from housing renovation funds. It appears that authorities are not to know until mid-March what their allocation from the fund will be.
  Will the Secretary of State consider giving indicative figures some time this month, so that the authorities can go ahead and draw up their budget for housing in good time for the beginning of the next financial year? Without that, their housing renovation funds will be in chaos.
  Mr. Michael: Setting priorities as we have done in matters such as education means that there are certain other budgets which, although we would love to increase them, we cannot increase to the extent that we would like.
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  On housing, we are still spending at a higher level than is the case in respect of English local authorities. We shall work with the WLGA to get the best from the money available and to target the money more effectively. Ensuring that outcomes improve is the main target.
  Mr. Alan W. Williams: Did I correctly understand my right hon. Friend to say that we are now getting rid of rate capping? Given that we hope to get objective 1 funding from next year, does that mean that, however much objective 1 funding is available, if the Welsh Office cannot make adequate matching funds available, local authorities will be able set their own rate so that they can provide the 25 per cent. from within their own resources?
  Mr. Michael: I said that we are abolishing crude and universal capping. It is in that spirit that I have worked with the WLGA, rather than set levels. That is the reason for my response to the hon. Member for New Forest, West (Mr. Swayne), who appears not to have understood the point. As for objective 1 funding, its financial implications for local authorities, and our working out how best to take advantage of it, I shall be discussing the matter with the WLGA as soon as we are certain of the decision—in respect of which I share my hon. Friend's optimism.
  Mr. Swayne: On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to refuse to answer perfectly proper questions asked by hon. Members in the House, and instead to say that it his intention to discuss the matter with the Welsh local authorities?
  Mr. Deputy Speaker (Mr. Michael J. Martin): I understand the hon. Gentleman to be talking about his intervention. The Minister's reply to it was perfectly in order.
  Mr. Michael: I am grateful, Mr. Deputy Speaker. The hon. Gentleman understood neither his own question nor the answer he received. Other hon. Members here present will understand me when I say that I commend the approach of the WLGA, with local authority leaders arguing their corner robustly, but in a positive atmosphere which contrasts dramatically with relations under the previous Government.
  Mr. Chris Ruane: May I join in the exchange, in a positive and robust manner, to fight the corner of my county and my constituency? My right hon. Friend will be aware that, for the past two years, I have taken up the issue of Rhuddlan borough debt, specific to my constituency and my county. I am aware that he will not wind up today's debate, so may I take this opportunity to ask what action he has taken in respect of Rhuddlan borough debt?
  Mr. Michael: I understand my hon. Friend's point. The problem arises not from the current local authority, but from its predecessor, and is a somewhat complex financial issue. My predecessor gave Denbighshire credit approvals of £2.5 million, repayable over five years, to help it to meet the problems that it inherited from the former Rhuddlan borough council. More recently, I offered to delay the repayment of credit approvals to help the

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  council deal with the repayment of grant to the European Commission. I also offered a supplementary credit approval of £100,000 to enable the council to undertake a review of the former borough council's capital programme—in other words, to establish the facts.
  I have heard today that Denbighshire has accepted my offer. I am pleased that the council has also confirmed that the district auditor is content with the proposed arrangements. That enables the council to tackle the immediate problems that it faces, and to identify the scope of any issues which may not previously have been identified. I would be very happy to meet my hon. Friend, and others who have an interest in the matter, in order to get the facts completely clear and to continue working with the council to find a solution to the problems that it faces.
  It is clear that the formula used to distribute funding to local government is not perfect. Last summer, the Welsh Office and the Welsh Local Government Association agreed to fund an independent review of the SSA formula. The contract was awarded to the economics department of Swansea university, which will provide a final report this month. The Welsh Consultative Council on Local Government Finance will consider the report at the end of March. In the longer term, it will fall to the National Assembly and local government, through the Partnership Council, to agree which changes are to be implemented for the 2000–01 settlement, and for later years. That is a good example of how partnership between central and local government can bring about change. We all hope that the outcome of the review will be a formula that delivers a fairer and more equitable settlement to local authorities in Wales.
  The £22.2 million that I am providing for council tax damping, through the council tax reduction scheme, will protect council tax payers from the continuing mismatch between SSAs and grant allocations. The scheme should ensure that increases for about two thirds of council tax payers in Wales are limited to about £1 a week. The parameters of the damping scheme were agreed by the WLGA, and as a consequence, the amount of damping grant for 1999–2000 has fallen by nearly 30 per cent. compared with this year.
  The settlement provides an additional £70.2 million for local authority education services. My hon. Friend the Member for Neath and I will be monitoring budgets to ensure that at least that extra amount is spent on education. The increase supports the Government's commitment to improve standards of education not just in schools, where we expect the bulk of the money to be spent, but more widely, through initiatives such as the one for life long learning.
  We are committed to improving the lives of children in public care in Wales. I have therefore made available an additional £5 million to support the introduction of a programme to improve the quality of local authority children's services and the life chances of children who are looked after by the local authority, by ensuring that they have the necessary education, health care and other support to make a successful transition to adulthood and independence.
  Mr. Ted Rowlands: The additional £5 million is very welcome. It will be
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  worth between £120,000 and £130,000 to Merthyr Tydfil county borough council. The cost of looking after children in care is rocketing, often as a result of decisions made beyond the local authority's jurisdiction, such as in courts. I gather that a White Paper on the issue is imminent. Will my right hon. Friend review the funding of children in care, because many local authorities will find extreme difficulty with it over coming months and years?
  Mr. Michael: I understand the nature of the problem to which my hon. Friend points. As a member of the ministerial group which undertook detailed and serious work in response to the Utting report, I am acutely aware of the need for Wales to address those issues. I have also set aside a further £1 million to provide central support for councils' efforts to improve services for children living away from home. We need to look carefully at services for children, in co-operation with the Welsh Local Government Association and others that have an interest in the welfare of children.
  I shall be working with local authorities and others to bring about an holistic approach to the needs of those leaving care. Very often, they have continuing personal difficulties and face problems with housing and employment. We should ensure that we provide joined-up solutions to joined-up problems. Some of the issues of social exclusion and of promoting social inclusion are very relevant to precisely the group of children and young people to which my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) referred.
  The report of the north Wales child abuse tribunal of inquiry will have lessons to teach us about the need for constant vigilance to ensure that children living away from home are properly looked after and their welfare safeguarded. That, too, addresses the issues raised by my hon. Friend the Member for Merthyr Tydfil and Rhymney. I have undertaken to present the report to the House as soon as possible after I receive it, and the tribunal's findings will inform the development of the programme to which I referred earlier.
  During the consultation on the provisional settlement, I received many representations about funding for the police. As I said earlier, the bulk of police funding is allocated by my right hon. Friend the Home Secretary, using a common formula for Wales and England. The concerns that were raised with me related mainly to the method that had been used to calculate capital charges, which inform the only part of the funding received by the police that I decide.
  In response to the concerns about the sudden and unexpected results of the application of the Wales formula to capital charges, I decided to change the way in which capital charges are calculated. I stress that nobody had anticipated that the formula would have those unintended and damaging consequences. The final settlement takes account of that point and represents an improvement of £1.8 million over the provisional figures for the police in Wales.
  I am pleased to be able to confirm my plans to delegate the strategic development scheme to local authorities. I have worked closely with the Welsh Local Government Association and the Wales Council for Voluntary Action to agree robust arrangements to ensure that the change will not lead to a cut in funding for the voluntary sector, a concern that was widely expressed. Instead, it will lead

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  to more creative, co-operative and productive working between the sector and councils across a broad span of services.
  Decisions should be made at a local level, but there must be partnerships between councils and the voluntary sector to ensure that best value is achieved. Meetings with county voluntary councils or their equivalents have taken place or are about to take place in all 22 authority areas in Wales. That is clear evidence that the agreement is working in practice. I am also pleased to say that the WLGA and the WCVA have agreed with me to set a September deadline for agreeing compacts in each part of Wales to reflect at local authority level the Welsh compact between Government and the voluntary sector.
  My predecessor and I have made significant progress in building a strong partnership with local government in Wales. The National Assembly for Wales will build on the strong foundation that we have laid.
  Partnership can help us to achieve the shared aim of providing the best possible service to the public. Through best value and meaningful consultation we shall be able to ensure that the services provided are meeting the needs of people in Wales. Traditional patterns of service provision have created boundaries, and people at the margins have fallen through the cracks between services. The Government's approach to social inclusion—as we describe it within Welsh policy and the Welsh budget—aims to ensure that those cracks between services are closed and that the most vulnerable in our society are not forgotten.
  Following the comprehensive spending review, the Government have been able to provide local government with certainty of funding. The indicative figures that I have published for the two years after 1999–2000 will allow local government to plan more effectively into the future. Service priorities can be planned over a three-year horizon, and local government welcomes that.
  This is the last time that the House will be asked by a Secretary of State for Wales to approve spending plans for local government in Wales. From 2000–01, it will fall to the National Assembly for Wales to make those decisions. The people of Wales will benefit from the governance of an Assembly comprising their elected representatives, making decisions that reflect Welsh needs.
  My decisions give local government in Wales a good deal that has received the support of the Welsh Local Government Association. They seek to build on the outcome of the Government's comprehensive spending review and balance my responsibilities for local government with those that I have for other public services in Wales. They represent yet another step towards redressing past funding inequalities. I commend them to the House.
  2.4 pm
  Dr. Liam Fox: As other hon. Members wish to speak and time is limited because of the private notice question earlier, I shall keep my comments to a minimum.
  The Secretary of State said at the outset that he believes that, as a result of the settlement, council tax increases should be lower than in recent years. However, the Government's figure of £1.40 a week would constitute an
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  increase of about £75–that is, 13 per cent. for a band D household, which is more than last year's average 12 per cent. increase across Wales.
  Ordinary Welsh families will be paying more than 25 per cent. more in council tax than they paid in 1997–98. Moreover, the figure does not include community council precepts, the cost of discretionary rate relief for businesses and the new arrangements for council tax benefit subsidy.
  The Government have heaped new costs on to councils. Pensions contributions have increased because of the Government's decision to abolish advance corporation tax, and councils will be expected to meet the cost of the teachers' pay deal announced last week. The minimum wage will also have implications for local authority spending. When all those factors are taken into consideration, it is likely that ordinary Welsh families will once again face steep tax increases.
  Moreover, the Government's decision not to announce in advance the top limits for what councils will be allowed to spend means that there is no guarantee that some councils will not increase tax rates by even more. Although the Secretary of State will continue to have reserve powers to cap council spending after council budgets have been set, he has refused to say what criteria he will use in making that decision.
  The answer that the Secretary of State gave my hon. Friend the Member for New Forest, West (Mr. Swayne) was quite unacceptable. He implied that as my hon. Friend did not have a constituency interest, he was not entitled to the same answer as hon. Members who had Welsh constituencies. That shows the contempt with which the Government treat the United Kingdom Parliament.
  Perhaps the Secretary of State will now tell us how much pain ordinary taxpayers will have to endure before he acts on capping. The Government claim to be committed to ending what the right hon. Gentleman called "crude and universal" capping. By deciding not to announce provisional cap limits, the Government fail to tell us what will be appropriate or inappropriate, so councils will not know in advance how much they can spend. That gives the Government the opportunity to decide the capping criteria that they eventually use on the basis of which councils they wish to affect, in order to avoid the embarrassment of having to cap a large number of their own authorities.
  The Government have replaced "crude and universal" capping with arbitrary and retrospective capping. The changes further blur accountability in local government and reduce transparency.
  As the House knows, at present the full bill for council tax benefit is met by central Government. The Government's White Paper, "Modern Local Government: In Touch with the People"—of course, every Government document must contain the words "modern" and "people"—was published in July last year. That proposed transferring some responsibility to local authorities for meeting council tax benefit above a certain threshold.[Interruption.] Yes, "modern" is a great word. I am sure that the people who found themselves on the increased hospital waiting list in December will be happy that those were modern waiting lists, not just old waiting lists.
  The provisional settlement in December made it clear that the Government intended to press ahead with their proposal. Despite vigorous opposition from local

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  authorities, the Government have decided to implement the scheme. That would mean that where a local authority increased council tax above a certain level, council taxpayers would have to pay even more to subsidise some of the cost of council tax benefit. The scheme will have a disproportionate impact on council tax payers in less-well-off areas where an above-average proportion of residents are in receipt of CTB. According to the Local Government Association, which the Secretary of State is fond of quoting, that will mean "the nearly poor paying for the really poor".
  Following the elections to the National Assembly for Wales in May, the Assembly, as the Secretary of State said, will assume responsibility for matters relating to local government finance in Wales, including the distribution of grant and capping powers. The amount of revenue support grant awarded to a council is not specified by law, and will therefore be totally at the discretion of the Assembly. The Government of Wales Act 1998 provides no protection for councils in the north, east or west from domination by the Labour heartlands. I am sure they will give consideration to that.
  Mr. David Hanson: The north is the Labour heartland.
  Dr. Fox: Hon. Members from other parties would have a difference of opinion with the hon. Gentleman.
  The Assembly will also be able to reduce the total amount of money that it gives to local authorities in Wales. It could give the funds to any other body, such as the Welsh Development Agency, or, more likely, spend the money itself. The Assembly could even introduce its own tax-raising power through the back door. It could deliberately hold back funds from councils, safe in the knowledge that those councils would be forced to raise council tax, which they will be able to do if the Assembly decides to lift capping restrictions.
  Business faces a similar threat, as calculation of the national non-domestic rate will pass to the Assembly. At present, the Assembly may increase the rate only in line with inflation—or less, with the consent of the Treasury. The Government are, however, reviewing that system. Even if it is left unchanged, inward investment may suffer in the meantime, as firms choose not to locate in Wales in case they face a much higher business rate in a few years.
  I should like ministerial answers on two specific areas. The first is debt. What is the total council debt in Wales and what is the total cost of servicing the debt? Which are the five councils with the worst record in terms of total debt? Secondly, what is the total amount of uncollected tax in Wales? How much of that relates to the community charge and how much to the council tax? How many councillors still owe tax? How many Labour candidates for the Welsh Assembly still owe either community charge or council tax? When tax is not collected, the honest taxpaying public have to pay extra, which is a burden. They have a right to know if any of their elected representatives are putting a heavier tax burden on taxpayers than on themselves.
  There is much that the Welsh Assembly will be able to do. I say to the Secretary of State that I hope that one benefit it will bring will be scrutiny—greater than any that
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  has ever been carried out by this House—of how local government money is spent and how local government is financed in Wales. I wish those who will take part in that scrutiny well, because the Government have a record of which they should not be proud. This House should have scrutinised them better.
  2.12 pm
  Mr. Win Griffiths: I should like to say—virtually without qualification and bearing in mind the crowded agenda for change and improvement, which has been necessary after 18 years of Tory government—that the settlement for local government in Wales is good news.
  It provides for a record increase and the settlement must be considered in the context of the three-year rolling programme. It will give those in local government—not only officials in their offices, but school head teachers and governors—the ability to plan their budgets three years ahead, and to do so with confidence, in the knowledge that the Government are determined to tackle and keep control of inflation. Each year, people in local government will know that they will get an above-inflation increase in their budgets. That is a fundamental part of this process.
  I was not surprised that the Opposition spokesperson—the hon. Member for Woodspring (Dr. Fox)—kept his remarks brief, because he did not have that much to say. He attempted to make something out of the capping issue, although, over the years, the Conservative Government did not have to cap councils in Wales. Those councils have always tried to act responsibly—even in the days when they were being cut to the quick by the previous Government. It is significant that the hon. Gentleman did not bother, either, to compare the Tory record of grants to local government with that of the Government. The two cannot stand comparison. We are streets ahead and, for the first time for a decade or more, local government can begin to plan the development of its services with confidence.
  At the end of his speech, the hon. Gentleman was forced to refer to a number of matters that are irrelevant to the debate, such as council debt and council tax and community charge debtors. The record of collecting council tax and community charge in Wales—and certainly in my own authority of Bridgend—is very good, despite the incredible efforts, and the totally wrong-headed policy, of the previous Government. Eventually, they had to give up that policy, even though it cost us all 2.5 per cent. on value added tax.
  Mr. Nigel Evans: Will the hon. Gentleman tell the House, and his constituents, what percentage increase band D people in his constituency will pay following this good deal on the settlement?
  Mr. Griffiths: As the hon. Gentleman ought to know, it is not my responsibility, nor is it the responsibility of this House, to determine what the council tax and council spending will be next year. The local authority will decide, and I am confident that Bridgend county borough council—given the additional resources made available to it by the Government and its responsible attitude towards council tax increases—will do the right thing for its electorate by making sure that the council tax increase is not excessive and that council services will improve during the coming year.

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  For example, my right hon. Friend the Secretary of State made an appeal for the additional £70 million specifically to be spent on education, and largely on schools. Quick reference was made to the cost of the teachers' pay settlement and that £70 million will ensure that school governing bodies will have the money to pay their teachers in full. The total additional amount being made available in Wales is more than the estimated cost of the teachers' pay increase. The previous Government could not say that with any confidence about the funding that they provided. They were always asking local government to find some of the money out of savings from somewhere.
  Although I believe that there is still scope in local government for more savings to be made, for more efficient services to be provided and for best value to become reality, at least this year local authorities know that the teachers' award can be funded, in full, from the additional money.
  I also recognise that despite the fact that the settlement is above inflation, local government could still wish for more money because it wants to provide a better service for children and older people, to do more to repair schools and to renew and modernise council properties. However, we know that there are huge problems in the national health service, such as those connected with modernising and funding it properly. The rural economy is also facing huge problems to which a lot of attention must be paid.
  There are so many fronts on which we must fight to recover decent standards of public service, to strengthen the Welsh economy and to make Welsh people more prosperous, that we can never satisfy all demands at once, but the settlement clearly shows that the Government are determined, year on year, to provide more money for local government in Wales.
  Over the three-year plan, there will be a 15 per cent. increase in our settlement, provided that we can meet our inflation targets. I have every confidence that my right hon. Friend the Chancellor of the Exchequer and the Bank of England will be able to achieve that. That means that we can have above-inflation increases year on year. There will be £70 million extra for education this year; next year, that sum of money will still be provided, plus another £75 million, and the year after that it will be augmented by another £80 million.
  These measures are such a positive step forward that the previous Government must be wondering how they managed—or mismanaged—the economy and public services. They were always rabbiting on about good-quality services, but they lamentably failed to provide a framework and a funding system that enabled such standards to be achieved.
  In the last year for which the Conservative Government had responsibility for local government funding, the average spending per pupil in Wales was £2,284, whereas under this year's budget it will be £2,431, which is an increase of more than 6 per cent. In my local authority in Bridgend, the figure increases from £2,236 to £2,402, which is an increase of more than 7 per cent. We have a little catching up to do, because we are below the Welsh average.
  There is a determination to achieve such improvements because the Government have a positive view of local government. They believe in working in partnership with local government, and they want the Welsh Office and
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  local government to work together to try to tackle the problems of providing high-quality services. Moreover, that partnership at a local level also spreads through other Government agencies and the private and voluntary sectors.
  For example, it is important that the police, local authorities, the probation service and the voluntary sector work together to tackle the problems of law and order and youth justice, so as to make the most of the available money and to provide a comprehensive and integrated service. I am sure that hon. Members from Wales will confirm that the issue of vandalism is raised at every surgery. Young people congregate around community centres, sometimes making it impossible for other people to be confident that it is safe to meet there. That is the legacy of the previous Government's 18 years of neglect of public services in Wales.
  I welcome and much appreciate the additional money going into education. However, there are still significant problems with the assessment of the requirements of children with special educational needs. That provision is a constant problem for local authorities across the United Kingdom, because it is demand led. It is difficult to make a budget estimate of what is needed, and to provide the funding to ensure that children with special educational needs receive appropriate help and support. It may be more appropriate for the Assembly to look into this matter, but there is a strong case for examining that provision afresh and deciding whether it requires specific special funding.
  Although I welcome the £5 million to ensure that the recommendations of the Utting report on children in care are implemented, there is still a huge agenda of concern that goes beyond the provision of funding for services. It relates to the culture and the attitude to children adopted by the different services—teachers, social workers, probation officers, the police or voluntary sector providers of services for children. Sometimes their views on how children should be dealt with are so different that it causes unholy difficulties.
  Part of the problem is the different perceptions held by each service. The Secretary of State for Wales should get all those with relevant responsibilities round the table because they should work much more closely to a common agenda to ensure that children are provided for, whether they are in school, in youth clubs, subject to community service orders or in residential homes.
  On the additional funding made available in the significant, ground-setting decision on transport, the £5 concessionary pass card and the 50 per cent. minimum reduction in bus passes for old-age pensioners are to be rolled out into a free service. That was an incredibly important decision. It will give older people new opportunities. The Welsh Office team should be highly commended for that decision.
  The Government are also providing free eye tests for pensioners and are making efforts to provide better public services for them. We should also consider what local government and the voluntary sector can do for pensioners to help them live at home, so avoiding the need to take up expensive hospital beds.
  On the eve of elections to a Welsh Assembly, the Welsh Office, my right hon. Friend and his fellow Ministers have provided a vision and a pathway for the

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  Assembly to tread which I believe will deliver to Wales and the people of Wales a Government of whom they can be truly proud in the 21st century.
  2.28 pm
  Mr. Lembit Öpik: It is such a shame that the Conservatives are no longer in power, because as I listened to the hon. Member for Woodspring (Dr. Fox) I realised that, if only they were in government, we would have happier pensioners, uncapped councils, shorter waiting lists, improved social provision and perhaps even a better form of devolution than the one we have got. Two years in opposition—two years in oblivion in Wales—has clearly had an edifying and regenerating effect on the Conservatives. I feel tingles of anticipation down my spine when I consider the 70 years of preparation that my party has had.
  With 18 years of preparation, the Labour party is somewhere in between. Although the overall settlement is much less unreasonable than those we have had in the past, it is hardly overgenerous. Indeed, the treasurer of Powys, which is the area I know best, feels that it is a standstill budget. Council tax will increase by more than 8 per cent., which is more than twice the rate of inflation. That worries my constituents, and it should also concern us. It is, in effect, a form of indirect taxation to raise money that is desperately needed by our local authorities. It would have been nice to have found a more equitable way of doing that than increasing council tax, which harms those who are least able to pay.
  It is odd that the Conservatives feel justified in criticising these figures, given that it was a Conservative Secretary of State who, not so long ago, handed back £100 million from Wales to the Treasury in Westminster. That hardly smacks of fighting the people's corner in Wales.
  Let me make some specific points about the settlement. It is clear from the figures that our spending on health and education is, to some extent, at the expense of social services, which are, in a sense, a hostage to Labour's political requirements. Having made promises, the Government are now having to juggle between important services in order to fulfil their commitments. The elderly and the mentally ill, who were not blessed with inclusion in the Government's early-trumpeted pledges, may suffer the most.
  The problem is the lack of integration between social services and health departments. Many organisations, including the Welsh Local Government Association, believe that Welsh social services are currently being underfunded to the tune of £95 million, and that is likely to continue to exert a pressure in the system. Extra money for health cannot be used most efficiently unless social service provision improves in tandem. Too often, beds are blocked because patients cannot get the home support or the residential home places that they need in order to leave hospital. In Powys, it almost pays for a person to become infirm at the beginning rather than the end of the financial year. The common-sense solution is to integrate social service and health provision, and the Liberal Democrats have long argued for that solution.
  Mr. Win Griffiths: Will not local health groups allow that to happen? Have we not something positive to look forward to?
  Mr. Öpik: I agree. The establishment of local health groups paves the way for exactly the strategy that we have in mind. I do not want to speak in purely parochial terms, but we have the chance of securing a fully integrated social service and health system in Powys—and, I imagine, in other areas where the relevant professions have a real opportunity, and a real desire, to take part in the experiment. So, I agree with the hon. Member for Bridgend (Mr. Griffiths).
  I ask Ministers to push the boat out a little in encouraging such experiments, and to see how the ideas work in practice. There will, of course, be a small amount of risk—the experiment may not work—but it will be a good way of making investment in social services and health go a little further. We will get more for our health and social services buck if those two parts of the public sector are allowed to work in the most efficient way possible.
  More than one in eight houses in Wales is defined by objective criteria as unfit for human habitation, and the figure rises to one in four in the case of private rented accommodation. That, surely, will have consequences in terms of social services and health, which must be tackled head on. Funds available for private-sector renovation grants were cut by £30 million between 1996–97 and 1997–98, and are likely to be slashed this year, even though bad housing is a key factor in poor health. It is money down the drain: we are trying to cure the symptoms, rather than tackling the cause. The Secretary of State has used the phrase "joined-up thinking". I urge him and his fellow Ministers to do some joined-up thinking about health, and to recognise that the roles of social services and housing are related.
  As for pay settlements, local authorities are, to an extent, hostage to central Government's decisions on wage bills. There are welcome pay increases for nurses and for some teachers, but others are far less fortunate. Despite proclamations to the contrary, pay settlements always put severe pressure on local government finance. Pay awards are always the Achilles heel. Incidentally, many nurses will not be fortunate, because they are in the middle tier: those who are not new entrants, and are not thinking of leaving the profession, have received a far less generous settlement. It goes without saying, however, that there is pressure on local authorities to meet the wage bill before doing anything else.
  The alternative is to lose jobs, but that puts even more pressure on services that are already under strain. We must consider the consequences carefully before giving unequivocal support to the guidance on wage bills. Naturally we should all like nurses and teachers to be paid more, so I worry that local authorities may not have enough money to pay them more without cutting other services.
  The Minister said that he considered the need for an holistic approach to social provision important. I interpret that as tacit support for what I have said about the desirability of collective health and social service planning. The savings achieved by such sensible investment might help to ease the pressures on the wage bill.
  Waiting lists continue to be a worry, but it may be possible to reduce them by eliminating them altogether in some areas—preventing people from requiring the health service in the first place—if we invest in primary

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  health care. Again, there is an opportunity for health and social service departments to work together, and to prevent people from ending up in hospital by explaining what they can do to stay healthy.
  Mr. Nick Ainger: Such as giving up paragliding.
  Mr. Öpik: I have not the first idea why the hon. Gentleman should suggest that, but I will say that the Liberal Democrats seem to have been far less successful in parachuting politicians into Wales than the Government. I have wanted to say that for a long time.
  We need to consider the formulae whereby local government settlements are determined. Rural areas may still be suffering a little more than they should, given the extra cost of services in such areas. Local authorities need more control over how they spend their money. Some of us feel that there is too much guidance from the centre. Such guidance is sensible to some degree, but there must be a balance.
  We heard something about transport policy from the Minister. It is welcome that pensioners will have a better deal, but we must bear in mind that public transport is virtually non-existent in some areas, and that we shall need an awful lot of extra money before the enormous damage done by the last Government begins to be rectified. Liberal Democrats are realistic enough not to expect all that to happen overnight, but we feel that we must be constantly attentive. I hope that, co-operatively, we can find solutions, perhaps by focusing on specific issues—for instance, the need for integration of bus and rail services.
  Mr. Win Griffiths: As in Powys.
  Mr. Öpik: Indeed—there and elsewhere, but I am talking about the need to ensure that the bus does not leave five minutes before the train arrives.
  Let me say a little about the general question of funding. There is a case for putting in a little more centrally, perhaps taking it from the contingency fund that the Government appear to be amassing; but most of the funds must result from our acting more smartly rather than simply throwing money at the problems. I hope that the hon. Member for Ceredigion (Mr. Dafis), who will speak on behalf of Plaid Cymru, will explain how his party intends to fund local government at the same level in the event of an independent Wales. I am not here to criticise Plaid Cymru's central separatist agenda, and I do not condemn it for holding a separatist view—such a view is politically legitimate, even if I disagree with it personally—but I hope that its spokesman will explain how, within a separatist agenda for an independent Wales, it intends to come up with the kind of money that the Government have promised and the Liberal Democrats have demanded to maintain services at anything like the present level. Clearly, Europe will not fund our local government requirements, so we tend to assume that the money would come from a massive increase in taxation, but I look forward to hearing what others in the Chamber have to say about that.
  The settlement is not unwelcome. It has some reasonable elements, but we still feel that there is a great opportunity to think more smartly, to act more holistically
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  and to allow local authorities to experiment in that way. If the Government are willing to take such a risk, I am sure that many in local government would be eager to take up the cudgels of that approach. We cannot fill potholes with promises, but we can fill them with policies.
  Some of those policies might be of interest not just in Wales, but in other parts of Britain. We have said many times that the experiment in devolution in Wales may act as a guide to other parts of the United Kingdom and, indeed, to Europe. If we make breakthroughs through integrating our systems and through, in some measure, trial and error, the benefits may be felt well beyond the borders of our nation.
  2.41 pm
  Mr. Chris Ruane: Thank you, Mr. Deputy Speaker, for the opportunity to participate in the debate.
  I start on a positive note. The additional finances that have been given by the Welsh Office have been well received in my constituency, with annual spending going up from £91 million to £97 million in 1999–2000. The additional resources that have already been given to education have been welcomed by parents, teachers and pupils in my constituency. They make a welcome change to the five years of year-on-year cuts in the education budget in Denbighshire under the previous Government.
  The additional education funding has meant that, in September, an extra 17 primary or infant school teachers were employed in my constituency. I was a primary school teacher for 15 years. During that time, the biggest complaint that I received from teachers and parents in the urban areas of my constituency was about class sizes. I once taught a class of 39 eight-year-olds and I can personally vouch for the disproportionate effect an additional 10 children can have on the education of the whole class. The £70 million that we will pump into education next year equates to an extra £140 per pupil per year. That is a massive increase on what the Conservatives provided.
  The additional money for public transport in Denbighshire is also welcome. It will have a big effect on the poor wards in my constituency, where car ownership is down to about 40 per cent.—60 per cent. of people do not own cars. Cars are a necessity in my area because of the rural-urban mix. They are necessary to get to places of employment. If people do not have a car or access to public transport, they will not have a job.
  Perhaps one of the biggest changes under our new Labour Administration is the improved relationship between local government and the Welsh Office. That is reflected by the fact that no capping limits have been set. Under the new spirit of co-operation, that means that existing powers will not have to be used to rein in councils. All those are positive developments in local government finance in Wales. Welsh Office Ministers should be congratulated on securing that additional finance for Wales.
  On a more local level, I have concerns about the particular financial circumstances in my constituency and county. My constituency forms the northern part of Denbighshire. The county's finances suffer for several reasons. The first is that Denbighshire is a small county in terms of population: it is just 89,000, compared with

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  approximately 132,000 for Wrexham, 120,000 for Flintshire and 110,000 for Conwy. Therefore, its overheads are much higher than those of most counties.
  The second reason why my county suffers is that it is neither urban nor rural—rather, it is both. The northern end of the county contains the towns of Prestatyn and Rhyl, which is the second largest town in north Wales. The southern end of the county is largely rural and characterised by small isolated settlements. The current funding system in Wales does not favour such counties. I ask the Minister to examine that issue.
  The third reason for the poor state of Denbighshire's finances is the legacy that was left by the old borough council of Rhuddlan. I should like to outline that issue and its impact on finances in my county.
  Rhuddlan borough council existed from 1974 to 1995. In the final years of its existence—from 1990 onwards—it applied for a number of European grants, which were match-funded by the Welsh Office. In the final two years of the council's existence, many applications for funding were made by the council and granted by Europe and the Welsh Office.
  When the new council of Denbighshire was established in 1995, evidence started to emerge that those applications were not made in accordance with the rules. As a result, the new county of Denbighshire has been saddled with debt of nearly £8 million. That debt could rise significantly as a result of further investigations. It has to be serviced by the county. The impact of a small population base, the rural-urban split and servicing that massive debt is having a dire effect on the level of services in Denbighshire.
  For the past four years, local people, including me, have sought answers as to how all that came about. I have used an array of parliamentary procedures to try to get the truth. When first elected, I sought a meeting with the then Secretary of State for Wales, my right hon. Friend the Member for Caerphilly (Mr. Davies), to explain the situation and to ask for financial help and an inquiry.
  I wrote to the Public Accounts Committee and it said that it was not their responsibility, but the responsibility of the Audit Commission. I wrote to the Audit Commission; it said that it was not its responsibility. I wrote to the National Audit Office; it said that it was not its responsibility. I have drafted numerous written parliamentary questions and asked for advice from the House of Commons Library.
  I have had meetings with the former Welsh Office Minister, my hon. Friend the Member for Bridgend (Mr. Griffiths), the Under-Secretary of State for Wales, my hon. Friend the Member for Cardiff, Central (Mr. Jones), and the current Secretary of State for Wales, who is prepared to help. Indeed, he has already given Denbighshire an additional supplementary credit approval for the current financial year of £100,000, and has decided not to offset Denbighshire's credit approval for 1999–2001 by £1 million, to assist Denbighshire to repay the grant to the European Conrunission. However, that is not enough.
  The Welsh Office under the last Conservative Administration must bear some of the blame and some, if not all, of the cost. It had the ability and the responsibility
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  to audit those accounts regularly. Over £1 million of Welsh Office, or should I say public, money was used in Rhuddlan borough. Those grants were not properly monitored. Therefore, I am asking the Secretary of State to do two things: to increase the rate support grant for Denbighshire over the next few years, so that the debt can be settled; and to set up a full inquiry into the Rhuddlan borough debt. That will be of benefit to my constituents and the people of Denbighshire in general.
  Mr. Martyn Jones: As my hon. Friend knows, I represent part of Denbighshire. I endorse all his statements about the problems that it faces. I add my request to the Secretary of State for an inquiry into that matter because it causes great problems to my constituents.
  Mr. Ruane: I thank my hon. Friend for that intervention.
  A full inquiry would be of benefit not only to my constituents, but to the people of Wales. We must learn the lessons of what happened in Rhuddlan borough council, so that we do not repeat the mistakes when Wales receives, I hope, its £2 billion-worth of objective I funding from Europe, starting in January.
  It is important that the inquiry has the power to summon witnesses. The key players in the affair have been very reluctant to supply the information that is required to answer the questions that are being put by the public. I understand the Welsh Office's reluctance to grant a full-blown public inquiry—there have been only 24 such inquiries since 1921. They can be expensive. The cheapest was Lord Cullen's inquiry into the Dunblane massacre, which cost £1 million. The dearest, I think, was the inquiry into child abuse in north Wales, which cost £15 million. I realise that Rhuddlan's debt is not in the same league as Dunblane or the north Wales child abuse issue, but it has left a considerable legacy for the finances and body politic of Denbighshire, which will be eradicated only if there is a full inquiry into what went wrong.
  I look forward to the full co-operation of my right hon. Friend the Secretary of State and the Welsh Office in settling this long-running issue and await with interest the comments of my hon. Friend the Minister.
  The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones): I understand my hon. Friend's strong feelings about the injustice of the situation that his local authority finds itself in. He explained the great cost of a public inquiry, but then said that holding one would solve the problem of Rhuddlan's debt. In what way would a public inquiry alleviate his authority's debt problem?
  Mr. Ruane: I am asking for two things. The way for the problem of the £8 million debt to be alleviated—
  Mr. Martyn Jones:—is for the Welsh Office to pay up.
  Mr. Ruane: Indeed, is for the Welsh Office to pay up, mate. A population of 89,000 people cannot repay the debt. We are looking to the Welsh Office—which should have been monitoring the situation over seven years—to help us out. The inquiry is a separate issue, but we must have one. The issue has been going on for four years. The public clamour for an inquiry has not abated. It is getting

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  worse and I agree with the demands. We must have a proper inquiry to ensure that we learn the lessons. That is in the interests of the Welsh Office for possible future European grants and it is in the interests of my constituents. I thank the Welsh Office for the help that it has given, even though it has been a long time coming.
  2.52 pm
  Mr. Cynog Dafis: I shall start by slightly modifying my speech to respond to the rather puerile attack—if it can be called an attack; it was more of a sniping exercise—from the hon. Member for Montgomeryshire (Mr. Opik) on Plaid Cymru. We have been expecting it for some time and were wondering when it would come. We were aware that the Labour party was too engaged in its affairs to turn its guns in our direction. We expect that to happen in the next month or so. We shall be ready, having prepared our policy in considerable detail. It will be interesting to see the detailed policy development of the other parties in preparation for the Assembly. The Liberal Democrats have at last got round to sniping at Plaid Cymru, because of their desperation about their awful position in the opinion polls. I am sorry, but that is the reality.
  The hon. Member for Montgomeryshire invited me to imagine a Welsh local government budget in what he described as an independent Wales. It is possible to construct such a budget. It would be a difficult budget, bearing in mind the current condition of the Welsh economy, but it could be done. However, it would be an academic exercise, because a so-called independent Wales—the hon. Gentleman is still using the language of the 19th century—is not on any agenda for the next five, 10 or even 15 years. Plaid Cymru's agenda is to make the existing constitutional settlement—the National Assembly for Wales—work well for Wales. We shall also be pushing for parity with Scotland, which has been given a far better settlement, as soon as possible. I trust that we shall have the support of the Liberal Democrats. I am confident that we shall also have the support of many Labour Members.
  The eventual constitutional outcome for Wales is, to a large extent, in the lap of the gods. It depends a great deal on what happens to the European Union and the enterprise for European federalism. It also depends on the democratic will of the people of Wales. Let us leave it to them. Plaid Cymru aspires to full national status for Wales, but full national status could be significantly different in 10 or 15 years from what it is today for the Republic of Ireland, Denmark or any other so-called independent European country. There will be a convergence between the constitutional status of the Basque country or Catalonia and that of Ireland, Denmark and other states. The terror of independence and separatism—the bogey that the hon. Gentleman is trying to raise—will disappear over the horizon.
  Mr. Öpik: I did not mean the hon. Gentleman to feel that I was sniping. I was attempting to make a serious political point. The first sentence in Plaid Cymru's general election manifesto said:
  "Plaid Cymru is the only party which places a self-governing Wales in a European Union at the forefront of its political agenda."
  Is that right?
  Mr. Dafis: I am happy to confirm that that is our position, but it is not relevant to the hon. Gentleman's
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  point. The implication of his comments seemed to be that Wales was inherently incapable of getting into the position of being able to pay its way. The suggestion was that Plaid Cymru could never get such a local government settlement in an independent Wales. He is saying that Wales could never ensure a generous settlement for its local government. If that is what he means, he has a dismal view of the potential of Wales. We reject that.
  I agree with much of what the hon. Gentleman said about the settlement. I can be more generous to him than he was to me.
  Mr. Jon Owen Jones: Before the hon. Gentleman leaves the subject on which he was having an interesting debate with the hon. Gentleman from the other side of the Cambrian mountains from him, I hope that his comments about the present settlement will reflect the fact that Wales's tax base—its GDP—is 83 per cent. of that of the rest of the United Kingdom. His aspirations have to reflect the reality of that low tax base.
  Mr. Dafis: I could not agree more. That is a reality that would make it very difficult to come up with a robust Welsh budget at the moment. Does the Minister agree that there must be reasons why the Welsh tax base is in such a parlous condition and the Welsh economy is in such a state? It has something to do with the construction of the British state, the way budgets have been handled and how taxation, public expenditure and regional development—or its absence—have been dealt with over the past 20 years. The problem can be traced back to Wales's ridiculous over-dependence on heavy industry, the failure to introduce a more varied industrial base and other matters.
  The situation is recoverable within the European framework that we would like—which is not necessarily the framework that we shall have—if Wales has appropriate policies instead of the inappropriate policies that we have constantly had to suffer from. Wales can hope to achieve a GDP level comparable to the best in Europe. I hope that the Minister also has such faith in the future of Wales.
  Mr. Llew Smith: I accept that in a separatist Wales, the budget would not be determined by the British state. However, the hon. Gentleman's vision involves a federal Europe. Does he accept that in such circumstances, the budget would be determined by the unelected and unaccountable European central bank, which would determine the budget level and interest levels? It would be illegal under article 107–
  Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We must not get into a debate on European banking. We should be considering the Welsh financial matters that are before us.
  Mr. Dafis: I shall address those matters directly, but of course they have to be considered in the light of the framework mentioned by the hon. Member for Blaenau Gwent (Mr. Smith). Power is shifting from London to Europe, so the big question relates to democratic accountability, and what should determine interest rates and European monetary policy. Power is also shifting to Wales, Scotland and Northern Ireland, so the really big constitutional question relates to the future of this place.

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  What significant powers will remain here? We need to get our heads round those issues and build a Welsh future on that basis.
  Mr. Deputy Speaker: Order. Perhaps the hon. Gentleman will find another opportunity to discuss those matters, but I must ask him to confine his remarks to local government finance in Wales.
  Mr. Dafis: I am sure that you will sympathise with me, Mr. Deputy Speaker, as I was diverted from my speech by interventions.
  There is a great deal of spin about what the Government are saying about local government finance. Of course, the present Government are identified with spin, if nothing else. I am sure that the hon. Member for Blaenau Gwent will agree with me about the enormous disparity between the glowing images conveyed by Government statements and the experience of ordinary people in Wales, whether they are employers, employees, unemployed or in education.
  Yesterday, for the umpteenth time, the Prime Minister said that he was determined not to return to Tory boom and bust. We have heard that repeated so many times that it is becoming tedious. However, much of Wales is experiencing something akin to economic collapse. Although we do not want to go back to boom and bust, much of the Welsh economy is bust. The Government are not entirely to blame, but their general approach to monetary and fiscal policy and to public expenditure is an exacerbating factor. The disparity between the Government's rhetoric and what is actually happening arouses in my constituency a mixture of wry amusement and anger. People do not understand how the Government's words relate to reality. The same applies to local government finance.
  The Government made much of their intention to remove crude and universal capping, which is a good thing. They are giving local authorities greater autonomy while retaining the powerful sanction of cutting their contribution to council tax benefit if councils exceed their spending limits. However, there is another more subtle agenda which was mentioned by the hon. Member for Montgomeryshire.
  The Government are proud of having kept their pledges not to raise income tax and not to exceed Tory spending limits in their first two years in office. However, they made those promises for the crudest political reasons. Just before the election, I was asked whether I thought that the Prime Minister would keep his election promises. I said that I certainly hoped not. It would have been good news had the right hon. Gentleman decided to break those promises, but he has kept them, certainly in relation to income tax and spending limits. In order to remain within the spending limits, the Government have had to keep a lid on public expenditure, including the Government's contribution to local authorities.
  As a result, local authorities will need to increase council tax in order to maintain services. The new Labour Government are allowing them that freedom, so things are changing. The net result of that approach is that wealth is redistributed—regionally and individually—in favour of the better-off and to the disadvantage of the worse-off.
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  That is clear from statistics. The pattern has persisted for 20 years, and the present Government are allowing it to continue, except at the margins. Although the Government have altered things here and there, by and large they have pursued the same general agenda. So the present Government are not as bad as the Tories—perhaps that will be their epitaph. I am sorry to be unkind to hon. Members who sit on the same side of the House as I do, but I do not believe that that epitaph would be acceptable to those who expected great things from a change of Government at an historic time.
  My own local authority, Ceredigion, is a case in point. The standard spending assessment for Ceredigion has been set at £70.2 million. That is an increase of 5.6 per cent. in real terms and there is a sense of relief about that. The council is permitted to spend up to £75.8 million without suffering clawback of council tax benefit subsidy. Without any kind of wish list, but simply to maintain services and meet new commitments, Ceredigion would certainly need to spend up to that limit, but that would involve a 12 per cent. council tax increase in an area of chronically low incomes where the economy is crashing, in part due to the high value of the pound which is a significant factor in the economy of west Wales.
  The Government have allocated extra resources which have been hypothecated for education. Substantially increased resources are being provided on a cumulative basis over the next few years and that is most welcome. This year, however, Ceredigion has estimated that it will require an increase of 7.5 per cent. from the Welsh Office in order to fund the pay awards to teachers and head teachers, so a large proportion of the extra money provided for education this year will go to meet the pay awards. In his letter circulated today, the Under-Secretary of State for Wales, the hon. Member for Neath (Mr. Hain), acknowledged that five sevenths of it would go on that.
  Mr. Jon Owen Jones: Can the hon. Gentleman explain why a pay rise of around 4 per cent. to teachers needs an increase in local authority funding of more than 7 per cent?
  Mr. Dafis: I shall write to the Minister about that. I have received that reply from Ministers before.
  Mr. Livsey: The hon. Gentleman has raised a serious point. Many small schools in rural areas have been closed down and the heads of other small schools will receive a higher than average pay increase. I am not certain whether the Welsh Office took that into consideration in calculating the settlement. Although we welcome the increased expenditure on education, the settlement does not cover the eventuality of higher increases in teachers' pay than were originally anticipated.
  Mr. Dafis: The hon. Gentleman has elaborated my point. The fact of the matter is that five sevenths of the extra money being allocated to schools this year will fund pay awards, so although it is acceptable and useful, it not such a big deal.
  As a result, counties such as Ceredigion find themselves between a rock and a hard place. They are acutely aware of the need to maintain services which the public rightly demand, but they are also concerned not to increase the burden on council tax payers, especially those on low pay who are just eligible to pay council tax. For such people, the council tax represents a serious burden.

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  Ceredigion county council is controlled by a group of independent councillors, supported by the Liberal Democrats—although it is almost a contradiction in terms that a group of independent councillors should behave as a political party. The council has decided to limit the council tax increase to 6 per cent. The hon. Member for Bridgend (Mr. Griffiths) talked about increases that are not excessive, but 6 per cent. is well over double inflation, and people who are already paying high council taxes might call it excessive, although I would say that it is an extremely cautious increase.
  Even with such a cautious increase, the band D payment will go up by £47 to £669 a year. That is a lot for people on low incomes to pay. Even after raiding the reserves, the social services budget will be cut by £200,000, which will exacerbate the bed blocking described by the hon. Member for Montgomeryshire. That is bad economics, and means that people with acute medical need cannot get into hospital and that the state has to pay more for the care of the people blocking the beds than if they were in nursing homes or being cared for at home.
  Social services, which is protected by top-slicing and special funds, is having a cut of £200,000, so there are concerns about departments that are not so protected. The Plaid Cymru group on Ceredigion county council opposes the strategy of limiting the council tax increase to 6 per cent., and I strongly support it in that. Maintaining services and investment should come first. I recognise the council's dilemma, which is of central Government's making. The Government should do more to help.
  There are concerns about the totally inadequate funding for the police in the coming year. Reference has already been made to the unacceptable cuts in the Dyfed-Powys police authority allocation from the Home Office. The Secretary of State said—which is also unacceptable—that local government now had to try to fill a little of the gap, to the tune of £1.8 million for the whole of Wales since the announcement in December. That means a further cut in damping in Ceredigion from £168,000 to £53,000, adding insult to injury.
  A review of the funding formula is under way. It is essential that the problems of regions such as Ceredigion, with special service needs and sparse populations, should be recognised, if the gross unfairness is to be rectified. Even that would happen within the straitjacket of a Government apparently hellbent on pursuing their right-wing agenda on taxation, interest rates and public expenditure: an agenda that is profoundly damaging to Wales.
  To prove my analysis wrong, the Government could take one simple step on objective 1. Wales's pro rata allocation should be significantly higher than the £200 million a year—equivalent to 2p on the standard rate of taxation in Wales—that is currently claimed, but the Government are not prepared to access what is available. They have an incentive not to do that. We are all aware of the problem of matching funds, and local government's position in relation to the capital budget makes that a most serious matter.
  The hon. Member for East Carmarthen and Dinefwr (Mr. Williams) suggested that we should cope with the problem by raising council tax. If it were to come to that, and we had to increase council tax to get matching funding to enable us to spend £200 million of European
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  money to revitalise the Welsh economy, it would be very important for everybody to understand that we had to do that because the UK Government failed to accept their core responsibility to redistribute resources within the state to allow regional development to occur.
  I invite the Government to do what they should and ensure that we get central Government resources to match the European money. If we get that, it will be good news, and it will be after the election, so I will take my cap off to them. They must commit themselves to that if they are to retain any credibility.
  3.15 pm
  Ms Jackie Lawrence: I was somewhat surprised to hear the hon. Member for Ceredigion (Mr. Dafis) saying that it would be good news if the Government did not keep their pledges to the British people. There is a tremendous amount of disillusion with politics in my constituency because people have been led to believe over recent years that Governments do not keep their pledges, and that is precisely why it is absolutely vital that the Government do so. This is a debate of only two hours, and the hon. Gentleman took 25 minutes of that. Perhaps because he is the only Plaid Cymru Member present, he has taken all his party's share. In a true spirit of egalitarianism, I shall be as quick as I can.
  Because this is the last time that it will be the task of the House to consider this settlement, I am especially pleased that it is so generous. I was stunned to hear the few and limited comments of the hon. Member for Woodspring (Dr. Fox) on behalf of the Conservative party. Those comments demonstrate to those of us with Welsh constituencies how out of touch that party continues to be.
  It was suggested that gross domestic product per head in Wales was 83 per cent. of the national average, but, in my constituency, the figure is about 72 per cent. My area is desperate for investment, which it was starved of during the 18 Tory years.
  The settlement contrasts with the actions of the former Secretary of State, the right hon. Member for Wokingham (Mr. Redwood), who, at a conservative estimate, returned £100 million that could have been invested in Wales. People in my constituency who were desperate for dualling of the A40 and improved infrastructure remember that well, but the hon. Member for Woodspring seems to have some selective amnesia.
  In my past life as leader of the Labour group on Pembrokeshire county council and a member of the former Dyfed county council, I saw at first hand the damage done by the previous Government as they squeezed local government funding in pursuance of their market forces dogma. They could not control local government in Wales, even with well-known Tories standing as so-called independent councillors to try to fool the public. Their ploy was to squeeze local government funding to force cuts in services, coupled with compulsory competitive tendering to privatise the remaining services.
  That cynical ploy took no account of the effect on the lives of ordinary people who depended on those services for a decent quality of life. The new settlement is further progress in correcting the damage caused by those years of Tory dogma.
  Our schools were starved of cash for two decades. I well recall when the parent-teacher association of the school attended by my two youngest children had to raise

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  funds to purchase books for an essential maths scheme so that the children would not be disadvantaged. Capital finance for schools and local education authorities was practically non-existent.
  In one school in Neyland in my constituency, a classroom ceiling fell down. Fortunately, no one was hurt. Leaking roofs, crumbling plaster and flaking paintwork were a common sight in Pembrokeshire schools in the Tory years. That shows the human consequences of Tory neglect of our education service in pursuance of dogma.
  We should not be surprised. Unlike Labour Members—one must say at this point that that includes my right hon. Friend the Prime Minister—Tory Members do not have a history of using state education for their children. The previous Government shed services through squeezing finances, forcing councils to privatise remaining services so that local authorities would exist simply to award contracts, and little else.
  Government policy means nothing if it does not improve people's day-to-day lives. The Government's belief in supporting local government in providing services in partnership with communities, together with the settlement, will improve the lives of people in Wales; but I want to reinforce concerns about the capital allocation for 1999–2000 and the need to give ample notice of the results of bids for housing grants. That is an issue of concern in my area.
  The extra funding for education provided by the Government has already filtered down to schools in my constituency. For the first time in decades, there are plans to build new schools and to repair old ones. I welcome the £70 million for education and the fact that it is to be monitored to ensure that local authorities do indeed spend it on education. It is a scandal that, in this day and age, there are still schools in my constituency that have outside toilets with no heating or lighting in winter. The overall settlement for Pembrokeshire—which, at 5.3 per cent., is twice the rate of inflation and the best that it has ever received—will enable the county council to tackle the backlog and to build for the future if there is the political will in the authority to do so.
  I welcome the announcement by the Secretary of State that he will not set capping criteria for 1999–2000. The crude across-the-board mechanism of capping was another central Government sledgehammer employed indiscriminately by the previous Government. Local authorities should be allowed to determine the needs of their particular area in partnership and consultation with local communities in a responsible way, and without undue diktat from central Government.
  If there are increases where local councils behave irresponsibly, powers can be used selectively to protect the public from the undue burden of cost resulting from such irresponsible behaviour. We must not forget that it was the previous Government who changed the system by which local government funding was apportioned between Government and the council tax payer. The Conservatives' system, with its increased gearing effect on council tax payers, is driving up council tax bills throughout the United Kingdom even now.
  The settlement is good news for Wales. It means record increases in spending on essential services, such as education and social services. I particularly welcome the
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  announcement of £5 million in the settlement to modernise and improve children's services, as proposed in the Government's response to the report by Sir William Utting. Our children are our future, and we must ensure that their needs are met, whatever their circumstances. Before becoming a councillor and then a Member of Parliament, I fostered children for Dyfed county council. Undertaking that work opened my eyes to the need to support children who do not have the security that many take for granted.
  On a different note—and as a former member of Dyfed-Powys police authority—I was initially concerned by the level of the settlement for this efficient and forward-looking force. In last week's debate on the police grant, I pursued the issue of sparsity—which I am aware my right hon. Friend the Secretary of State initiated during his time at the Home Office. Rural police forces such as Dyfed-Powys await the publication of research with interest, as they believe that it will support their claims that there are significant extra costs in policing rural areas. However, I am pleased to note that having heard the general concerns of police forces in Wales, my right hon. Friend has decided to alter the capital charges element of the formula for the police, which will mean an increase of £1.8 million for police authorities in Wales.
  The settlement provides a solid foundation on which the new Assembly for Wales can build. The new National Assembly, in partnership with local government in Wales, will in future take over responsibility for the funding of everyday services for the people of Wales. This is a new opportunity for consensus politics in Wales, rather than the confrontational style that we see so often here in Westminster. It is a new opportunity for a shared vision of the way forward for Wales by the people of Wales. It will prevent a repeat of the incident under the previous Government, when £100 million was returned to the Treasury to support one individual's right-wing credentials—hardly an action in the best interests of the people of Wales.
  3.24 pm
  Ms Julie Morgan: Time is short, so I will quickly cover some aspects of the settlement for my authority, Cardiff. I will then speak specifically about the grant for traveller education in Wales. The settlement is welcomed in Cardiff, where we see it as a real sign of the advent of a Labour Government. It will make a significant difference. The growth in population in the Cardiff area has increased the SSA for Cardiff and the council tax will now be one of the lowest in Wales. During the final two years that the Tories were in control, the council tax went up by 25 per cent in the first year and 15 per cent in the second. Last year, it went up by 12 per cent. and this year it will be 3.6 per cent.
  The settlement shows that the Labour Government are committed to working in partnership with local authorities and are committed to local authorities in a way that we have not seen for the past 18 years. The extra money for education is strongly welcomed and is filtering down to schools. However, we have a huge task in the Cardiff area, because the old South Glamorgan authority—made up of Cardiff and the vale—was the lowest spender on education in Wales. The local authority is planning to try to bring up its spending gradually to the level of authorities such as Swansea, Newport and others. This year, the authority is putting in an extra £500,000 and is trying to reach the general spending level.

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  The local authority's tremendous drive to increase the number of nursery places and nursery units is a result of our pledge to provide a nursery place for all four-year-olds. That is causing a problem in my area of Cardiff, North. I strongly welcome the commitment to nursery education, and I fought hard for it when I was a local councillor. However, due to the lack of education provision in Cardiff, North, a whole network of local voluntary playgroups and nurseries were started by parents—usually the mothers.
  It has been a great struggle to keep the playgroups going, and they often represent the best in child care—parental involvement and support for children with special needs. The Welsh language playgroups are involved. However, because of our commitment to state education, some four-year-olds are taking up places in the local authority nurseries and are leaving those groups floundering. Last year, the Welsh Office gave £60,000 to the playgroups to see them through this period of transition—because it is only a period of transition.
  We are committed to working in partnership, and we want to make sure that LEA nurseries and the nurseries in the voluntary sector—which, on the whole, are not run for profit—can work together in a true partnership to make sure that every child has a place in good-quality child care. That is an issue in my constituency, and throughout Wales. We must save the pre-school playgroup movement because those playgroups provide some of the best child care.
  I am concerned at the slight reduction in the three-year capital allocation, as it will cause problems in relation to unfit housing. I am worried also at the length of time that residents in my area—and in others, I am sure—have to wait for disabled facilities grants. It is unacceptable that disabled people or the elderly must struggle when we know that, sometimes, a small amount of money can make their lives easier. Cardiff is bidding for an extra £15 million to tackle unfit houses and disabled facilities grants, and I hope that that bid is successful. That is why we are here—those are the issues that the Labour Government must tackle.
  I welcome the fact that the Welsh Office has increased the grant for the traveller education service in Wales from £150,000 to £300,000 for next year. That is a tremendous step forward. However, I wish to draw the attention of Ministers to certain issues regarding traveller education. A Welsh Office-funded report by Laura Morgan of Save the Children Fund in December 1998 showed that the number of traveller children in Wales was twice the number estimated by the gipsy count which used to be carried out by the Department of the Environment. There are about 2,000 traveller children in Wales. Although the grant has been doubled, we are really keeping the status quo because the original grant was based on a lower number of children.
  The grant is for only one year, and I am sure that that is because the National Assembly will take over funding for traveller education. However, a one-year grant is not enough it is causing havoc in planning and in recruiting pupils and teachers. I hope that the Welsh Office will pass on the message to the National Assembly that the project needs to be funded for another two years.
  The development of traveller education in Wales is patchy. Cardiff has the only established and comprehensive traveller education service, and has more
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  traveller children—270–in mainstream schools than anywhere else in Wales, although hardly any of them are in secondary school. The problem is huge and more money and resources are needed to tackle it.
  Traveller children are a vulnerable and marginal group. There are few old people in the traveller population, because most travellers die relatively young. They suffer from discrimination, and the adult literacy rate is only 35 per cent. Extra resources are needed to help the children of that socially excluded group. The Government have made a commitment to, and a priority of, children who are socially excluded, and the problem of traveller children must be tackled head on.
  I very much welcome the funding increase announced today, and I hope that the National Assembly will produce a more cohesive society in Wales, in which travellers and their children will be allowed to play a full role.
  3.31 pm
  Mr. Llew Smith: At Prime Minister's Question Time yesterday, my right hon. Friend the Prime Minister responded to a question by saying that he was in favour not only of wealth creation but of the redistribution of wealth. That statement had the support of all Labour Members and it is something on which we, as a trade union and labour movement, can build on. Redistribution can happen in various ways, one of which is by means of settlements such as we are debating today. When we judge the settlement, we must take into account how much redistribution it has brought about between individuals and communities throughout Wales.
  By any measure, Blaenau Gwent is one of the poorest communities in Wales. We have some of the worst health problems in the United Kingdom, and the area is pretty well at the top of the list for heart disease, respiratory diseases and cancers. With some colleagues, I did some research into the number of sick and disabled in the area, and we published a book some years back. We found that 43 per cent. of families had one member who suffered from long-term illness or was disabled.
  Our income levels are among the lowest in the United Kingdom. Much of our housing stock is old and badly in need of repair. Blaenau Gwent probably has one of the lowest levels of car ownership in the south Wales valleys. Unfortunately, the examples of deprivation and poverty seem endless.
  The local authority has to deal with those problems, but does the settlement begin to respond to them? Will it bring about the necessary redistribution of wealth? Does it stem from a socialist philosophy that believes that investment should go where the need is greatest?
  The uplift in committed expenditure is 5.9 per cent. That is to be welcomed and it is far in excess of the level of increases experienced under the previous Conservative Administration. However, excluding the education component, the figure is 4.6 per cent. Initially, especially given present levels of inflation, that appears very generous, but I want to take this opportunity to present the local authority's views.
  It has stressed to me that the settlement is subject to additional commitments that render it less favourable. Furthermore, local authorities across the country are suffering from the increase in landfill tax from £7 to £10 per tonne. Further cost pressures arise from the need

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  to restore past deficits on superannuation funds, to meet new duties imposed on environmental health departments in respect of the inspection of contaminated land and new regulations on the inspection of animal food stuffs.
  Those last duties are referred to in the statement and it is made clear that resources are provided, in the overall total, to enable authorities to carry out the new duties. Further cost pressures arise from the implementation of Government proposals for best value and the implementation of the single-status agreement achieved as part of a previous settlement for local authority employees. Many local authorities also face increased demands from precepting bodies for sums that exceed the additional resources provided by the settlement.
  We are running out of time, but I want to raise a couple of matters with the Minister, and I hope that he will be able to respond. First, the local authority standard spending assessment in Blaenau Gwent is to rise by 3.4 per cent. Given that the area is one of the poorest in Wales, I hope that my hon. Friend the Minister will explain why some other local authorities are to receive rises of as much as 6.2 per cent., while the average throughout Wales is 5.2 per cent.
  Secondly, will my hon. Friend explain why some local authorities, including Blaenau Gwent, will have to put up council tax by between 12 and 14 per cent., while others will raise their council tax by only 3 to 8 per cent? I am sure that my hon. Friend will want to respond to those questions.
  3.37 pm
  Mr. Martin Caton: I shall be brief, but I guess that it is almost impossible, when debating the local government settlement, not to become very parochial. That has been evident this afternoon.
  I have talked to councillors, trade unionists and officers in my local council, and I have to say that the phrases "best settlement ever" or "more than we could have hoped for" have not crossed their lips. I suppose that that is not surprising, but the words "realistic" and "responsible" have been heard, and they are appropriate. The settlement is not hugely generous, but it is realistic and responsible, and it allows our local authorities to get on with delivering public services in a way that has not been possible for many a year.
  Yet, in talking to people, I encountered some disappointment and anxiety for the future. As my hon. Friend the Member for Blaenau Gwent (Mr. Smith) mentioned, there is concern in some of our communities about the way in which the standard spending assessment is arrived at. I applaud the partnership approach between the Welsh Local Government Association and the Welsh Office that produced the settlement, but the levels of poverty are still being underestimated. Not enough weight is being given to tackling the problem, and that is why the poorer communities in Swansea, Blaenau Gwent, Rhondda Cynon Taf and Merthyr Tydfil still do not get the deal that they deserve.
  The other main issue that people raised with me is their concern about social services. Commendably, the Government have given priority to education and to health, which were mismanaged and underfunded in the period of Conservative Government. However, social services are tied closely to decent service provision in education and
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  health, and they are very stretched at present. They need to be given the same sort of priority very soon, if we are to achieve a comprehensive, joined-up approach to the provision of decent public services.
  I know that I will not be allowed to speak any longer, so I shall sit down.
  3.39 pm
  Mr. Nigel Evans: It is now my opportunity to say a few words about joined-up thinking. I speak as one born in Swansea, who lived there for 33 years. [HON. MEMBERS: "Yes, yes."] I have to get the background in; my family still live there, and the family business is still there. I was a West Glamorgan county councillor for six years, too, so I speak with authority.
  When my hon. Friend the Member for New Forest, West (Mr. Swayne) asked a legitimate question of the Secretary of State, I was disappointed to see him fobbed off simply because he has no constituency interest. That may be so, but my hon. Friend has a countrywide interest.
  Mr. Swayne: The fact that I was treated rather discourteously is of no consequence. Although the Secretary of State might have used marginally more charm had he been asked the same question from his own Benches, the point is that he would have given the same answer. He will not tell us what criteria he will use in making any decision on capping.
  Mr. Evans: My hon. Friend is wounded, and it takes a lot to wound him. His point is serious, and I hope that it will be answered in the wind-up.
  Beyond the opening speeches from both sides, eight Back-Bench Members have spoken in an interesting debate. We have heard mainly new Labour speeches from the Government side—and, indeed, a new Labour speech from the Liberal Democrats, too. There will be another debate on 25 February—traditionally known as the St. David's day debate—when many hon. Members who might have wanted to speak today may be able to do so. I hope that it will not be the last St. David's day debate in the House of Commons, as those debates allow us to raise matters of concern. This year's debate will follow the result of the Labour leadership debate, and we shall be able to speak with authority on the impact that that result will have on our deliberations. Will it be a victory for the people of Wales, or for the fudged system introduced to help the Secretary of State to become leader of the Labour party in Wales? We need not wait long now to know.
  It is a shame that the Liberal Democrats have used the debate to have a go at Plaid Cymru. This dreadful political spat between the two minor parties in Wales is shameful. [HON. MEMBERS: "What about the Tories?"] If anyone is suggesting that the Conservatives are in oblivion in Wales, I should say that the Liberal Democrats should recognise oblivion. Let me remind the hon. Member for Montgomeryshire (Mr. Öpik) that 100,000 more people voted Conservative in Wales than voted Liberal Democrat. We look forward to the local elections.
  Mr. Deputy Speaker (Sir Alan Haselhurst): Order. May I remind the hon. Gentleman that we are discussing the finance order? He should return to that.
  Mr. Evans: I am sorry, Mr. Deputy Speaker, but I felt under an onus to respond to the dreadful attacks made on the Conservatives during our two-hour debate.
  Speaker after speaker has told us what a wonderful settlement the settlement is. The real judges of that will be the people of Wales, either at the local elections in May or at the elections to the Welsh Assembly. The people will know how good the settlement is because of the level of service that they will receive and because of the council tax that they will pay.
  Expectations of the Government have risen because they told the people of Wales that things can only get better. Of course, the people were not told that things can only get dearer. As the council tax letters drop through their letter boxes, they will see that that is the case. There are expectations of smaller class sizes and investments in partnership with local authorities, and there is a price to be paid for those things.
  In several areas, there will be increased demands on the services that people receive in Wales. For example, the millennium bug problem has required investment, but no extra resources were made available, so local authorities, and the police, have had to invest extra resources there. The minimum wage and other local pay settlements also require to be funded. We have heard of good pay settlements, but there is a price to be paid, and some of the charge will be passed on to the local taxpayer.
  The Government's pension fund grab, just after they were elected, has left local authorities needing to find extra resources to ensure that pension fund money is made up. Local authorities will have to pass those charges on. Equipment and new technology also require funds, and the police have made representations in the belief that the police settlement was not sufficient to meet pay demands and the costs of new technology and other equipment needed to provide a service.
  I shall congratulate the Government on one matter, because it is right to recognise good news where it exists. It is the extra £5 million being made available for local transport—£3 million for rural areas, and £2 million for urban areas, although some of the latter may be diverted to rural areas too. Vast tracts of Wales are rural, and people live in remote communities in which, if there is no bus service and they cannot drive, there is no hope of getting around. I hope that the money will be targeted as effectively and imaginatively as possible to help aging populations and those who live in remote areas to live a fuller life in the parts of Wales where they want to live. I congratulate the Government on making those extra resources available.
  There is a payback, however. In the past two Budgets, petrol taxes have increased, so the money has come from motorists, many of whom live in rural areas. When will the Government learn that the use of a car is not a luxury for people in rural areas, but a necessity? Those people are clobbered time and time again.
  Extra demands are being placed on local authorities, but a lot of money is being ring-fenced for education. We accept that the Government believe the money ought to go to education, but if their other pledges are to be fulfilled, and if expectations in local government are to be
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  met, the money must come either from efficiency savings or from services being cut. There simply will not be sufficient funds from the resources made available.
  My hon. Friend the Member for Woodspring (Dr. Fox) has mentioned council tax benefit. We simply do not know which areas will be hardest hit when money is clawed back. Currently, the benefit is dealt with solely by central Government, but when local authorities have to pick up the bills, the poorest sectors and the nearly poor will be clobbered. It is they who will have to pay for the settlement.
  My hon. Friend the Member for Woodspring also mentioned capping. Everyone thinks it wonderful that there is now no official capping. When I was in Wales, I thought capping an excellent idea as it brought a focus and rigidity to the system that protected those people who were clobbered time and time again. The new capping arrangement means that local authorities will not know when the capping will come about. Crude and universal capping is to go, we are told, but that will leave crude and unknown capping, entirely at the disposal of the Secretary of State.
  Mr. Michael: Wrong.
  Mr. Evans: The right hon. Gentleman may say I am wrong; we shall see if that is so when the Under-Secretary of State for Wales winds up. I only hope that his performance today is better than the one he gave earlier this week on the private notice question. [HON. MEMBERS: "Shame."] His statement was shameful. I hope that today he will answer some of the questions put, even though he was not able to do so then.
  Devolution will be upon us after May, and it will have an enormous impact. Today's revenue support grant settlement debate will be the last that we shall have in the House of Commons. Will the Minister say something about the Barnett formula, and about the confidence of local authorities in both the three-year settlements and their prospects for the future?
  Will the Minister take the opportunity in his winding-up speech to comment on the debts of Welsh local authorities? How much money remains outstanding? To what extent are council taxes in arrears? What are the debt charges? I hope that the Minister will explain how local authorities will be able to deliver services in the light of the settlement that he has announced today.
  3.50 pm
  The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones): This has been an interesting and wide-ranging debate on the local government finance report for Wales. Next year, the decisions that we have been discussing will fall to the National Assembly for Wales. Today, hon. Members have raised various points about the funding of local services for their constituents.
  The local government settlement for 1999–2000 builds upon the comprehensive spending review and, for the second year, we have addressed the funding deficit that we inherited from the previous Administration. There are undoubtedly still spending pressures on local authorities, but in the spirit of the partnership that we have fostered in Wales, the most acute pressures have been alleviated. In particular, the additional £70.2 million for education

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  will enable local authorities to meet the teachers' pay settlement and have money left to spend on education. I am sure that when the hon. Member for Ceredigion (Mr. Dafis) does his sums, he will find that that is the case. We estimate that the teachers' pay settlement for 1999–2000 and the hang-over from the last pay settlement will cost about £50 million. Some £20 million is available for local authorities to target at local education priorities.
  Several hon. Members—my hon. Friends the Members for Bridgend (Mr. Griffiths), for Vale of Clwyd (Mr. Ruane), for Cardiff, North (Ms Morgan) and for Preseli Pembrokeshire (Ms Lawrence)—related their experiences of looking after children or of teaching. They expressed their strong support for the Government's policies, which will achieve a reduction in class sizes and an increase in nursery education.
  My hon. Friend the Member for Cardiff, North expressed her anxiety that we should safeguard playgroups in the voluntary sector. I endorse her views, and I know that my hon. Friend the Member for Neath (Mr. Hain) will take them into account. My hon. Friend the Member for Bridgend spoke about the need to secure social services—particularly when dealing with children in care. That is very much a Government priority. By allocating money to our sure start programme, we hope to be able to tackle some of the problems before they become insurmountable. I know that my hon. Friend will support the Government's actions in that area.
  Sure start is also a way of trying to co-ordinate Government policy to bring about joined-up central and local government. The hon. Member for Montgomeryshire (Mr. Öpik) talked about trying to integrate services. He referred to integrating health and social services in order to achieve better value for money and increased service provision from the same funding. I hope that the hon. Gentleman will support the Government's efforts in trying to pool budgets as a way of utilising the same amount of money to best effect within different departments and areas of local government.
  The settlement for 1999–2000 is a good settlement for local government in Wales.
  Mr. Barry Jones: Will the Minister give way?
  Mr. Jones: Yes, but only this once.
  Mr. Jones: I am very grateful. The documents refer to job creation and the moneys for that. Since April, my constituency has lost 1,250 jobs and we are very concerned that we may lose assisted area status. How might the Welsh Office help my constituency in north-east Wales to retain assisted area status?
  Mr. Jones: My hon. Friend is always assiduous in promoting his constituency—we could all learn from him. No decisions have been taken about which areas will qualify for deregulation on the assisted area map. Flintshire will be considered for inclusion, along with the rest of the United Kingdom.
  We have delivered on our commitment to minimise ear-marked resources. We agree that all local councils are best placed to identify local funding priorities.
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  The settlement for 1999–2000 also includes indicative figures for the following two years. This forward-looking approach will allow local government to plan local priorities over a three-year horizon. In each of the three years, we will deliver an increase of more than 2 per cent. in real terms, which will enable local government to respond better to local service pressures.
  As part of the consultation on the provisional settlement, the police authorities and their representatives have asked my right hon. Friend to look again at the way that capital charges have been calculated. He has responded to their concerns, and this has resulted in an increase of £1.8 million over the provisional figures announced in December. We are prepared to listen and are committed to developing meaningful partnerships. The National Assembly for Wales will be able to begin its work on the basis of sound partnership.
  I know that not all local authorities are happy with the council tax reduction, or damping, scheme. We agreed the parameters of the scheme for 1999–2000 with the Welsh Consultative Council on Local Government Finance. It decided on a scheme that it considered best met the needs of local government in Wales, knowing that there would be winners and losers. The damping scheme is an excellent example of how well local government in Wales can work together, with some authorities contributing to the damping top slice so that poor authorities can receive the benefits.
  As my right hon. Friend said at the beginning of the debate, the standard spending assessment formula is not perfect. The independent study commissioned jointly by the Welsh Office and Welsh local government associations will be available later this month. My hon. Friends the Members for Blaenau Gwent (Mr. Smith) and for Gower (Mr. Caton) have asked us to address their concerns about poorer authorities apparently not receiving as many resources as they should. We shall re-examine the funding formula, but there are reasons why local authorities receive different sums—not least, demographic changes. Population movements in south Wales in particular have led to some local authorities receiving an increased allocation as a result of population growth.
  I acknowledge that earmarking £70.2 million of the increase for education and £5 million for Utting means that there will be pressures on other services. However, if councils increase their education budgets by £70.2 million and their other budgets by the balance of the increase in net total standard spending, spending will increase by 4.9 per cent. for social services—because of the £5 million support and the introduction of a Quality Protects Wales initiative—and by 4 per cent. for other services. That takes no account of local decisions on council tax and resources released by efficiency savings. We expect that, when best value comes in, local authorities will be able to deliver greater efficiency savings, and thus release greater resources.
  This settlement represents a good deal for Wales and provides a sound foundation on which the National Assembly can build relations with local government. We have a challenging agenda of modernisation ahead, but with the support of our partners in local government and others, we believe that we can meet that challenge. Welsh local government will receive a record funding increase of £878 million over the next three years. That is

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  nearly £300 per person in Wales. In the circumstances, it is a very good settlement for the people of Wales, and I commend the reports to the House.
  Question put and agreed to.
  Resolved,
  That the Local Government Finance Report (Wales) 1999–2000 (HC 203), which was laid before this House on 3rd February, be approved.

  Local Government Finance (Amendment) Report (Wales) 1998–1999
  That the Local Government Finance (Amendment) Report (Wales) 1998–1999 (HC 204), which was laid before this House on 3rd February, be approved.—[Mr. Hanson]
  Special Grant Report (Wales) 1999
  That the Special Grant Report (Wales) 1999 (HC 177), which was laid before this House on 28th January, be approved.—[Mr. Hanson.]

  Local Government Finance (Scotland)
  4 pm
  The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): I beg to move,
  That the Local Government Finance (Scotland) Order 1999, dated 28th January, a copy of which was laid before this House on 1st February, be approved.
  Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to discuss the following motion:
  That the draft Housing Support Grant (Scotland) Order 1999, which was laid before this House on 28th January, be approved.
  Mr. Macdonald: The orders set the framework for local authority funding and housing support for the year ahead. In future, they will be the business of the Scottish Parliament. Before I introduce them, I have a few words on the general background.
  The local government order delivers the most generous financial settlement for local authorities for seven years. It underlines our commitment in the comprehensive spending review to invest in quality local services. Councils will be able to increase spending by almost 5 per cent. next year. Much of that increase will be targeted at the Government's priorities, which are shared with Scottish local government, of education, social work and the police and fire services. On top of that, the three-year spending plans that we announced last July after the CSR provide further real-terms increases over the following two years. The firm three-year plans offer councils long-term stability and should help them to plan their service delivery over a sensible period. In turn, that should deliver better value for money.
  Next year alone, council spending is set to increase by more than £300 million. By the third year of the CSR, Scottish local authorities will have an extra £840 million per year to spend on front-line services. Those are significant real-terms increases, and as local authorities deliver the efficiency gains to which they and we are fully committed through best value, their real spending power will be even greater.
  Overall, the settlement represents a major boost to local government spending power, providing councils with the means to make real progress in improving the quality of front-line services. This is a fresh start for the local government and reverses several years of tight spending controls made necessary by the economic mismanagement of the previous Government.
  Councils must be rigorous in their continuing efforts to improve efficiency. Keeping council tax rises down is a key objective. Council tax payers expect and deserve no less. We have, as promised, scrapped crude and universal capping, but it remains important that councils budget prudently. We have therefore introduced a new system of expenditure guidelines to inform council budgeting rounds.
  Mr. Donald Gorrie: Can the Minister clarify what the difference, if any, is between the guidelines and the crude universal capping that he is so much against?
  Mr. Macdonald: Yes. The expenditure guidelines will let councils know the level of spending that we think

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  is prudent, but they are indicative rather than firm caps. It will be up to councils to decide at what level to set their council tax. If councils heed the guidelines, council tax rises should average no more than 5 per cent. next year. We have provided local authorities with significant increases in funding, and we do not expect councils to have to budget above guideline. However, if we are faced with excessive budget increases, we have the existing capping powers in reserve.
  Mr. Alex Salmond: The Minister argues in principle against the rigid capping of previous years, in which I support him. The Scottish Office—in future, the Scottish Parliament—tightly controls the revenue flow to local authorities: 90 per cent. or more of the money available to local authorities will come from central Government, whether through the Scottish Office or the Scottish Parliament. In principle, what is the need to have further guidelines, even indicative ones? If the revenue is being controlled, cannot local authorities at least be trusted to distribute their expenditure?
  Mr. Macdonald: The hon. Gentleman knows that we must also have regard to the interests of council tax payers. This is a significant step forward to providing data flexibility and discretion for local authorities, but it is prudent to keep the existing capping powers in reserve. I hope and trust that there will be no occasion to use them.
  It is not only council tax payers who are hit if council tax rises are excessive. Large hikes also affect national taxpayers, and the assigned budget through increased council tax benefit subsidy payments. The White Paper, "Scotland's Parliament" signalled arrangements to ensure that any resultant extra cost would have to be found by the Scottish Parliament. We have therefore put in place subsidy limitation arrangements to ensure that councils themselves bear the responsibility for the benefit costs associated with high spending increases.
  Sir Robert Smith: On the new method of controlling local government spending, is the guideline figure at or below the grant-aided expenditure figure for the councils?
  Mr. Macdonald: The guideline figure is the GAE figure. If councils spend considerably above that, or increase council taxes considerably above the expected 5 per cent. on average, the reserve powers are available to deal with the situation. We hope that that will not happen. The signs so far for next year suggest that the reserve powers will not prove necessary, but they will remain in reserve.
  Dr. Liam Fox: To help the debate, can the Minister say what he means by "considerably", and give councils in Scotland an idea of what that means in practice?
  Mr. Macdonald: If the guideline, which at £6.5 billion for next year is pretty generous, or the expected average council tax increase of about 5 per cent. is breached, we would consider the situation in the individual local authority. We would examine why it had happened and assess each situation as it arose. That is the point of
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  moving away from the crude and universal, automatic approach to one where we allow more discretion. That is sensible and right, but it is prudent to keep the other powers in reserve. It is a matter of assessing each local authority's situation individually.
  Mr. Salmond: My understanding from the Convention of Scottish Local Authorities is that planned expenditure for Scottish local authorities collectively is some £300 million above the GAE assessment for next year. Given that situation, does the Minister intend to act? If not, or if he thinks that the expenditure planned by local authorities is unreasonable, what would he cut from the £300 million to bring the figures into line? The Minister for Home Affairs and Devolution shakes his head, but COSLA argues that planned expenditure is £300 million more than the GAE assessment. Either the planned expenditure or the assessment is wrong. It argues that the assessment is wrong.
  Mr. Macdonald: Perhaps I inadvertently misled the hon. Gentleman. I said that it was about £6.5 billion next year; I think that the figure is actually £6.9 billion. That is the figure that we will take as a guideline. We will assess whether local authorities are spending way above that guideline figure.
  Mr. Salmond: So that is another £400 million?
  Mr. Macdonald: No. There is no sense of the sort of squeeze that the hon. Gentleman fears. We do not expect any local authority to exceed the guideline in the coming year, certainly not by any significant amount.
  Mr. Tam Dalyell: Will my hon. Friend comment on part of COSLA's case, that application of convergence criteria with the implicit aim, over time, of regarding each council's grant-aided expenditure as its spending guideline is strongly opposed? What is the Government's view?
  Mr. Macdonald: There is nothing new in that. The notion that expenditure by councils should be more in line with the assessment of councils' needs is one that has been advanced for many years by different Governments. COSLA' s case is nothing new—that has always been its argument. The importance of the new procedures and the new expenditure guidelines is that they represent a far less rigid approach to achieving convergence than the old crude and universal capping procedures, so there is now greater flexibility than there was previously.
  Mr. Oliver Letwin: The Minister is being most generous in giving way, but will he finally clarify the position regarding the guidelines? He mentioned total guidelined expenditure of £6.9 billion, compared with grant-aided expenditure of £5.7 billion. From where did he get the extra £1.2 billion; that is, how did he calculate that the guidelines ought to give headroom of £1.2 billion over the grant-aided expenditure figure?
  Mr. Macdonald: The guideline figure is £6.9 billion. Some local authorities spend in excess of the GAE figure: because council tax increases in past years have been larger than previous Governments thought that they

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  should be, the amount of actual expenditure has been rising above the GAE figure. There is nothing new in that gap between actual expenditure and GAE, so there is nothing about which the hon. Gentleman should be surprised or puzzled.
  Mr. Letwin: Does the Minister agree that, if councils raised their expenditure to the guideline level this year, that would involve, given his aggregate external financing, a rise in their local tax of about 5 per cent.?
  Mr. Macdonald: Our assumption is that, if councils meet the expenditure guideline, the average council tax increase will be about 5 per cent., so the hon. Gentleman is absolutely correct.
  On the detail of the orders, the Local Government Finance (Scotland) Order 1999 sets out the amounts of revenue support grant and non-domestic rate income that will be payable to each authority in 1999–2000. It also redetermines the amount of revenue support grant payable for 1998–99. The order is accompanied by a report that sets out in detail the background to the figures in the order. The detailed calculations set out therein have been subject to consultation with COSLA, with which we enjoy a constructive working relationship on issues of distribution. We have been faced with some difficult issues in that respect and the strength of our relationship with COSLA has helped in handling them.
  Overall, the settlement is a generous one that will enable councils, for the first time in many years, to deliver real increases in the scope and level of their services. However, with that extra spending power comes a requirement for greater financial responsibility: we expect local authorities to seek best value in all their activities and to budget prudently.
  The second document under consideration is the Housing Support Grant (Scotland) Order 1999. The Government attach considerable priority to housing and that has been reflected in the decisions we have taken since entering office. We added £66 million to the housing budget for the first two years, which was the first increase after years of cuts in housing expenditure under the previous Government, owing to the budgetary consequences of their management of the economy. Following the CSR, we announced an additional £300 million to be spent on housing and regeneration over the next three years. That means that, by the end of 2002, Scottish Office funding for housing will be about £640 million—an increase of nearly 40 per cent. on the level of funding we inherited from the previous Administration. Our key housing initiative—[Interruption.]
  Mr. Letwin rose—
  Mr. Deputy Speaker: Order. I am sorry to interrupt the Minister. If the hon. Member for West Dorset (Mr. Letwin) wants the Minister to give way, he should make his wishes known audibly, otherwise we have two hon. Members on their feet simultaneously.
  Mr. Letwin: Will the Minister give way?
  Mr. Macdonald: I shall happily give way to the hon. Gentleman.
  Mr. Letwin: I am grateful to the Minister and sorry for not having drawn his attention to my desire to intervene
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  earlier. Given his comments about the previous Government's mismanagement and its effects, will the Minister tell us what effects the recession being generated by the current Government will have on next year's settlement?
  Mr. Macdonald: It is precisely because of our prudent approach to public finances that we shall be able to deliver, on plan and on schedule, the public spending increases we have already announced.
  Our key housing initiative is to develop new housing partnerships, which bring together councils, tenants and the wider community in a way that gives tenants a direct say in the ownership and management of their houses. The public funds being made available from new housing partnerships are intended to be used to lever in private finance to meet the need to repair and modernise much of our public sector housing. Some £45 million has already been allocated to councils throughout Scotland to develop new housing partnerships to provide improved and, of course, affordable houses.
  In August, councils were invited to bid for new housing partnership resources amounting to £278 million over the next three years. In setting in motion that new bidding round, I made it known that we intended to give priority to funding proposals for community ownership that both promoted tenant empowerment and brought in private finance.
  Sir Robert Smith: Will the Minister attempt some discussions with the Treasury about how the accounting rules work, so that where tenants want to have the council as their landlord, it will still be possible for investment to be put into the council houses and for the houses still to be run by the council on behalf of the tenants, as is the wish of many tenants in my constituency?
  Mr. Macdonald: The hon. Gentleman must accept that, where houses remain in the public sector, the debt attached to those houses must be counted within the public sector debt. The Treasury and my right hon. Friend the Chancellor have to evaluate and handle such debt in the same way as any other part of the public sector debt portfolio.
  Sir Robert Smith: That is where the Treasury has not improved its accounting practices in line with much of continental Europe. When one invests in a house that is guaranteed to earn rental income, the debt is totally different from that which is incurred by investment in expenditure, where there is no return on capital.
  Mr. Macdonald: The parallel cannot be drawn. Where local authorities demolish houses that they have built through public sector borrowing, the debt outstanding on those demolished houses is not, or ought not to be, paid off by tenants, but is transferred to the general fund and the general taxpayer. The Treasury has to take into account any consequences in terms of public sector debt. If the objective is to lever in private sector investment, which we think is a sensible objective, the approach I outlined of community ownership has the merit of achieving both that and tenant participation and empowerment. That is no great price to pay, but is a great virtue and merit of the approach we have chosen.
  Mr. Salmond: I hope the Minister will forgive me for pointing out that he has not directly answered the

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  question. It is technically possible to retire, reschedule, write off or transfer to the general fund debt relating to stock that remains in the public sector: for example, 18 months ago, we rescheduled some of the water debt in Scotland, yet the water industry remains in the public sector. The Minister's answer was that it is desirable to get the housing stock out of the public sector, but why should not the same financial incentives be available for housing stock that chooses to remain within the public sector as for that which is transferred out of the public sector? Why are the Government giving financial incentives to transfer stock out, but not offering the same financial encouragement to improve stock that remains within the public sector?
  Mr. Macdonald: The point is quite simple. As long as the stock remains in the public sector, that sector will have certain obligations and liabilities concerning that stock and the financial consequences of managing it. Therefore, it is absolutely right, sensible and prudent for those liabilities to be accounted for in public sector debt. When the Treasury assesses the amount of debt and liability for next year and years ahead, it includes those houses for which it is responsible as part of the public sector.
  Mr. Ian Davidson: Given that the Minister is well known for being both strongly pro-European and less hostile to the Liberals than many others on the Labour Benches, could not he combine both his hobbies and agree to accept the proposal of the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith)?
  Mr. Macdonald: I am very keen on matters European. Sweden, for example, has long developed community-based and tenant-driven housing models which I would recommend to both local authorities and hon. Members. The virtue of community ownership is not just that it levers in private finance to complement the public investment that we are making, but it provides new powers and a new role for tenants. That makes it a very desirable way forward.
  The bids for new housing partnerships are being assessed by a group which includes representatives of COSLA, Scottish Homes, the Scottish Federation of Housing Associations and the Chartered Institute of Housing. We shall be announcing the outcome of that bidding round later this month.
  The order provides for a total amount payable in 1999–2000 of £10.6 million. That comprises £6.8 million that is payable to Highland, Shetland Islands and Western Isles councils in respect of their mainstream housing costs, and £3.8 million that is payable to 19 other authorities as a contribution towards the running costs of hostels for the homeless.
  The grant calculations are based on assumed rental income of £41.76 per house a week, and assumed management and maintenance expenditure of £885 per house per annum—an increase of 3 per cent. over last year's figures. I should emphasise that those figures are neither guidelines nor recommendations, but are used for the purpose of the formula only. The assumptions are uprated annually as part of the well-established formula calculations.
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  Housing support grant, as a deficit subsidy, continues to decline primarily because loan-charge expenditure next year is estimated to be substantially lower than this year. However, to cushion the effect of a substantial reduction in entitlement, we have again activated the grant loss limitation mechanism, which restricts the reduction in grant to £110 a house. Without the grant loss limitation mechanism, housing support grant in 1999–2000 would have been further reduced to less than £9 million.
  Housing support grant is now, of course, a relatively minor component in local authority housing finance. I remind the House again that, over the next three years, an additional £278 million will be made available to the new housing partnership initiative. No doubt, there will be further comment on that in the debate. I hope that that explanation of the two orders has been helpful to hon. Members, and I commend them and the reports to the House.
  4.24 pm
  Dr. Liam Fox: I acknowledge at the outset that although I have not been one of the hon. Members known to say the most flattering things about devolution and the forthcoming Scottish Parliament, one of the Scottish Parliament's most useful functions will be to provide a decent amount of time for the scrutiny of this sort of information, which simply has not been possible in the House. I for one very much welcome that better accountability and scrutiny. I say that in a spirit of utter magnanimity—perhaps that is as far as it will go.
  It is useful to point out that the real-terms increase in central Government support is in fact 1.71 per cent. I know that Governments will always talk of a cash-terms increase, so the figure is worth putting in context, especially as the economy slows down. On a day when the Bank of England predicts growth for the first half of the year of nothing to 0.5 per cent., it is a bit rich for Ministers to talk about previous financial mismanagement. Five councils—Falkirk, Orkney Islands, Inverclyde, Shetland Islands and Western Isles—all face a real-term cuts in aggregate external finance. Therefore, to say that the settlement is one of the most generous on record will hardly come as any great comfort.
  I do not make any party political point, but it is interesting to note that, of the five councils that receive the most favourable increases in aggregate external finance, four—East Renfrewshire, East Dunbartonshire, South Ayrshire and Stirling—are politically marginal, over which Labour gained control in 1995, and will be defending in 1999. On the fifth council—South Lanarkshire—the Labour party has lost a number of so-called safe seats to the Scottish National party in recent times. I imagine that there is no political pattern, and that really there just appears to one in the tables.
  It is interesting to hear the Minister say that council tax will increase by an average of 5 per cent. That is at least what the Government have worked out, and how the gap in the different sets of figures, which my hon. Friend the Member for West Dorset (Mr. Letwin) pointed out, arises. If previous trends are reflected, there will be tremendous variation from that average, as I am sure the Minister would accept that. Last year's average of 5.6 per cent. resulted from figures ranging from zero in Renfrewshire to 15.5 per cent. in Orkney. That relates to our earlier point about what merits "considerable variation", to which I shall return.

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  The figures do not, of course, include other precepts, such as the cost of discretionary business relief, council tax benefits subsidy, and so on. The Government have also heaped new costs on councils. Pensions contributions have increased because of the Government's decision to abolish advance corporation tax, councils will be expected to meet the cost of the teachers' pay deal, and the minimum wage will have implications. That adds up to a back-door tax rise.
  Given that the Minister has said that this is such a generous settlement, it is worth citing an example of its effect. Most of the increased resources are ring-fenced for new responsibilities. In Edinburgh, for example, 60 per cent. of the AEF increase is to meet new responsibilities in education, child care and care in the community. Only 40 per cent. of the increase is available for existing services, and increased salaries must be met from that amount. The settlement suddenly becomes a much less generous one.
  Mrs. Rosemary McKenna: Is the hon. Gentleman aware that, through COSLA, local authorities have agreed with the Government on priorities in the settlement?
  Dr. Fox: I do not for a minute suggest that the priorities are right or wrong. However, when one strips what is ring-fenced, the settlement is much less generous than it might appear, especially from the Minister's presentation.
  Edinburgh may not be able to maintain all existing services as a result of this settlement. It has said that there will have to be restricted library access, a cut in the books budget for libraries, a scaling back of the street cleaning service, fewer home helps and a cut in road and pavement repairs. Those are comments of people who are involved in local government in Edinburgh, and I am not one to argue.
  Mr. Nigel Griffiths rose—
  Dr. Fox: Perhaps the hon. Gentleman will want to argue the point.
  Mr. Griffiths: Certainly. Given that when the hon. Gentleman's party ran Edinburgh in coalition with the Liberals, 1,000 teaching posts were axed, his comments are a little rich. From this August, schools in Edinburgh and Edinburgh's excellent Labour authority will be delivering a nursery place not just to every four-year-old, but to every three-year-old—ahead of the promises that we made during the election campaign. The hon. Gentleman mentioned home helps. Labour's work contrasts with the massive cuts in the number of home helps when his party was in control of that self-same council.
  Dr. Fox: It is not for me to determine the priorities of any council. I have always been a great believer in the fact that they should determine their own. We shall see how well Edinburgh performs in the coming year within the settlement. That can be judged by the electors later on. It is certainly not for me to try to second-guess any council. People who work in local government in Edinburgh say that they may not be able to maintain their services, and I would rather accept their view than that of a Minister.
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  When the Government talk about ending crude and universal capping, they put an interesting case before us because it will mean that councils will not know in advance how much they are able to spend. It will also enable the Government to decide the capping criteria that they will eventually use on the basis of which councils they choose to be affected, in order, no doubt, to avoid potential embarrassment at having to a cap many Labour-controlled authorities. They are replacing crude and universal capping with arbitrary and retrospective capping. That further blurs accountability in local government and reduces, rather than increases, transparency.
  The Minister refers to cases in which the guidelines are breached by a considerable amount. For guidance, will he give us an example of council tax rises last year that would have breached guidelines by what he terms "a considerable amount"? For example, would last year's limit of 5.6 per cent. have been breached considerably by Glasgow's 9.4 per cent. increase, Aberdeen's 11.5 per cent. increase or Orkney's 15.5 per cent. increase? Which of those figures would have amounted to a breach?
  Mrs. McKenna rose—
  Dr. Fox: I am sure that the Minister for Home Affairs and Devolution could answer the question and he should do so in his winding-up speech. The Under-Secretary gave us the Government's definition when he said that they did not want guidelines to be breached considerably. The House and councils have a right to know what that means in practice. That is not an unreasonable question for the House to ask. I look forward to the Minister giving us the information that we require.
  Another problem is the transfer of responsibility for council tax benefit. That means that if a local authority increased council tax above a certain level, council tax payers would have to pay even more to subsidise some of the cost of CTB. That will be a disproportionate cost to council tax payers in less-well-off areas, where an above average proportion of residents are in receipt of benefit.
  The Minister for Home Affairs and Devolution, Scottish Office (Mr. Henry McLeish): Did I hear the hon. Gentleman refer to CCTV?
  Dr. Fox: No, to CTB—council tax benefit. I have obviously been away from Scotland too long. The Minister has trouble understanding the Somerset inflection that I have developed.
  I should like the Minister, in his winding-up speech, to give us his view on uncollected taxes. The latest figures that we have for the levels of uncollected council tax and community charge reveal that the total value of unpaid bills as at 30 September 1998–that does not include the figures for 1998–99–had increased by nearly £50 million. That follows an increase of almost £150 million last year. I have sympathy with Ministers because it is interesting that the increase has occurred in spite of the fact that the previous Government and this Government issued grants to local authorities to improve their current and past collection rates.

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  I am sure that the Minister will accept that the trend is worrying because in Glasgow, the amount of uncollected local taxes is 18.6 per cent. of the amount billed. In West Dunbartonshire, the figure is 12.2 per cent., and in South Lanarkshire, it is 8.6 per cent.
  Mrs. McKenna: Does the hon. Gentleman agree that uncollected taxes are a direct result of the poll tax imposed by his Government? Furthermore, is he advocating that there should be no capping at all?
  Dr. Fox: I am absolutely puzzled as to how an increase in uncollected taxes in the past year can be due to the poll tax, when it is clearly due to the amount of council tax that has not been collected in the past year. Of course there is a hangover from uncollected community charge, but there has been an increase in the past year of the amount that is outstanding. That is worrying, especially when central Government are giving grants, and it is due to the fact that local government is not carrying out its tax collection duties properly.
  One of the worries is that those who are not paying their council tax are causing a higher increase for law-abiding citizens who do pay their council tax. That is the moral reason why the Government should redouble their efforts to try to make sure that the system works.
  A secondary problem is council debt in Scotland. The cost of servicing debt is huge. For example, in Glasgow the cost of servicing the debt is £245 million and in Edinburgh it is £117 million. Those are high figures. One of the advantages of the Scottish Parliament having more time to consider these measures is that it will be better able to hold central and local government to account.
  Such mismanagement in local government finance definitely needs to be checked. It was only in late January this year that Labour-controlled North Ayrshire council said that it would have to raise the average council tax bill by £37 to cover a £4.2 million budget deficit. Earlier in January, the Labour-run City of Glasgow council said that it would not impose a rise in council tax, but that would be at the expense of a budget cut of £21 million and 400 job losses. That is despite the fact that Glasgow had over £200 million of uncollected taxes. Last December, it was announced that the former Labour-run Strathclyde regional council bequeathed a closing deficit of £78.5 million.
  The report by the Controller of Audit, Robert Black, on the performance of councils' direct labour organisations and direct service organisations for 1998, found that half of Scotland's councils had incurred deficits in at least one of their DLOs or DSOs. That is well detailed in the Scottish Office note. Those are important issues.
  I hope that the Scottish Parliament will take seriously its duties in accountability and scrutiny. It is a great pity that the House has not had more time to consider the figures. They are very complicated and many Members want to take part in this important debate. I hope that those who go to the Scottish Parliament will take seriously their duties. I wish them well in what will be a difficult task.
  4.36 pm
  Mr. Nigel Griffiths: We have just heard a very poor analysis by the Opposition of the figures in the settlement. The Opposition spokesperson, the hon. Member for Woodspring (Dr. Fox), has the real story in front of him, and that reveals that on top of the comprehensive spending review settlement, which guarantees a real-terms increase of 6.8 per cent. over the next three years in spending on vital public services in Scotland, today's announcement is particularly welcome.
  We welcome the Government-supported expenditure increase of £301 million, which increases spending by 4.8 per cent.—well above inflation—to £6.5 billion. We welcome the grant-aided expenditure increase of £265 million, which increases spending also by 4.8 per cent. to £5.8 billion. For the third pillar of local government finance which supports our council-run public services in Scotland, the aggregate external finance figure of £5.5 billion has also increased by £219 million, which is 4.1 per cent. Those are the important figures, but what the money does is more important still.
  Last year, we spent over £500 million of public money in Scotland on housing. The comprehensive spending review provides an extra £300 million for housing and area regeneration. I want tenants to be given more say about their housing and more resources to carry out vital works because we have inherited a shameful legacy.
  Shelter tells me that until 1995, we were spending far less on housing as a percentage of gross domestic product than comparable European countries. Our spending was well below the European Union average. Shelter says that that has condemned 362,000 Scottish children and 119,000 Scottish senior citizens to living in damp houses. My hon. Friends will visit them in their homes and hear their problems at their constituency advice sessions every week. Shelter estimates that nine out of 10 houses in Scotland fail to meet modern energy efficiency standards, which is an absolute disgrace. Since the election, it has been our priority to tackle those poor standards in 50,000 homes with £9 million of new money.
  Before Christmas, I visited Shanter way in my constituency to find out how that money was being spent directly on cavity wall insulation, roof insulation and draft excluders on doors and windows, which transformed the life of a young family, one of whom was disabled.
  Energy Action Scotland is doing a terrific job in co-ordinating that work throughout Scotland. None of it would have been possible without Energy Action Scotland and without the money made available by the Government, and the money that we levied from the utilities to fund the new deal, which was opposed root and branch by the Conservative party.
  I spoke to one of the new dealers in Shanter way, a young man who had been unemployed and is now getting training. He praised the scheme. He is getting double the basic £70 and will be taken on permanently. He told me how that had transformed his life and the lives of 16 other youngsters working for the same firm.
  I am pleased that the Minister for Home Affairs and Devolution is giving the rough sleepers initiative a boost of an extra £30 million to help people with no roof over their heads. We feel a great sympathy and compassion for their plight, and that initiative will make a real difference. As one of the founders of The Big Issue in Scotland, I pay tribute to my hon. Friend's work.

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  Education is, of course, the Government's priority. I welcome the real growth in spending of 15.3 per cent. over the period of the comprehensive spending review—an extra £1.3 billion, which is far more than the Liberals pledged. We got off to a flying start with an extra 5.1 per cent. in Labour's first year, which meant an extra £200 per pupil.
  We are keeping our promise to provide nursery education for all three and four-year-olds with the extra £40 million. We welcome the increase of £112 million for pre-school education, which will allow many more three and four-year-olds in Scotland to attend nursery school. As a result of this settlement and other financial help given by the Government, 100,000 children will receive grant-funded pre-school education in the next school session.
  It is vital that we honour our commitment to cut class sizes. That is being done for the crucial ages in primary 1, primary 2 and primary 3, to ensure that no pupil is taught in a class of more than 30. Of the 18 primary schools in my constituency, some have already achieved that and others—particularly Sciennes school and James Gillespie's primary, where there are pressures on numbers—will welcome that commitment and the extra resources made available today.
  That money will be spent, in contrast to the shameful neglect of education by Lothian regional council when the Conservatives and Liberals ran it in coalition. At that time 1,000 teaching posts were axed from Edinburgh schools, including such vital extra teachers as specialist music teachers and drama therapists. Therefore we do not take lectures from other parties about how we are running education in Edinburgh, nor should my hon. Friend take any lectures from them on his spending plans and stewardship in Scotland.
  As my hon. Friends know, I took an interest in social work before coming to the House of Commons. I welcome the 4.9 per cent. increase—the extra £51 million, with a significant extra component going to community care. During the Tory years, steps were taken to empty a hospital in my constituency without alternative provision having been made. Now, people's needs are realistically assessed and tangible support is offered when care in the community is provided. That is not cheap, so the extra money is vital.
  The fire services are to get an extra £8 million—a welcome above-inflation increase—and there is an extra £24 million for the police services. Throughout the range of public services, a great start has been made. We can hold our heads high.
  There is a clear message from the Labour Government: we value local government and local government services. We pay tribute to the many hard-working local councillors and dedicated council staff. We are providing an extra 4.9 per cent. in overall extra expenditure. This year, next year and the year after, the people of Scotland can look forward to getting value for money in a range of vital services, instead of what they experienced in the past decade—swingeing cuts, reduced services and, in many councils, the disappearance of vital services.
  Dr. Fox: On a point of order, Mr. Deputy Speaker. You will have been made aware that the Government are to make a statement on Kosovo at 7 pm. Have you been
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  informed by Ministers why that could not have been made earlier, when more hon. Members were around the Palace of Westminster.
  Mr. Deputy Speaker: I am afraid that I have had no messages. It is entirely a matter for the Government when they decide to make statements to the House.
  4.46 pm
  Mr. Donald Gorrie: We will give one feeble cheer for the local government settlement. It certainly does not deserve two cheers.
  There is a real-terms increase of about £64 million this year, allowing for inflation. However, we must look further than one year. Last year, there was a cut of £83 million, and the year before there was a cut of £260 million. If we look back over five years and project the Labour Government's plans for the next five years, and compare the last five years of the Conservative Government with the first five years of the Labour Government, we find that the Labour Government will have supported local government to the extent of £460 million less per annum than the Tories.
  The hon. Member for Edinburgh, South (Mr. Griffiths), whom I am happy to follow, deserves a job in the Labour party's spin department. I do not recognise the situation that he depicted. He referred several times to an alleged coalition in Lothian regional council, which never existed. The Liberal Democrats at that time helped to save a great many services that would have been cut. The Labour party did nothing to help. The hon. Gentleman is good at rewriting history and painting the present in false colours, so he deserves a job in the relevant part of the Government.
  Over the past two years, there has been a net cut in local government funding—a slight increase this year and a bigger decrease last year. The councils that have suffered most are, in order of severity, Aberdeen, Inverclyde, Shetland, Argyll and Bute, Dundee, Moray, West Dunbartonshire, Stirling, Glasgow and Falkirk.
  Mrs. McKenna: How does the hon. Gentleman square that with the comment of the hon. Member for Woodspring (Dr. Fox) that Stirling was one of the areas that was gaining because it was a Labour marginal at the general election?
  Mr. Gorrie: I am not questioning any motives. I have not checked, but I suspect that Stirling may have done well this year, but particularly badly the previous year. I think that my figures are correct over the two years.
  I should like the Minister to answer several questions. First, will the Government guarantee the finance for councils to fund their programme for modernising education, which involves related teachers' pay increases? The Government, COSLA and the councils are keen to improve and modernise education. Will the Government be sufficiently flexible and allow finance to enable any necessary pay increases and other improvements to be made?
  Secondly, when will the Government remove local authority self-financed expenditure from the public sector borrowing requirement? That is the single biggest constraint, and it could be a constraint on the Scottish Parliament, depending on what are the rules. It is essential

  531
  that that constraint is removed. The current position is ludicrous. The British are out of step with the continental countries, and we should change the rules smartly.
  Thirdly, why did the Scottish Office remove community care as a line in the Budget? In recent years, there has been a line for community care, but, this year, it comes under social work. The figures may be a bit damning; when I asked for figures on community care I was given figures on social work, less youth activities. That shows that, despite councils being asked to do much more, they were receiving an increase of only 0.25 per cent. two years ago and last year. They are receiving no increase this year, so the money for community care is simply not there.
  I should have thought, with respect, that if the Government are serious about joined-up budgeting and joined-up government, community care should involve social work, housing and health. Pre-eminently, the budget should stand alone and draw on those three, rather than be lost in a morass of social work funding.
  Fourthly, will the Government make best value less bureaucratic? Most people would sign on to the concept of best value, but others will have had an experience similar to mine when I visited the chief executive of the council of the area that I have the honour to serve. He produced a huge wodge of papers, which related to one little bit of best value. The initiative is hugely bureaucratic and takes up enormous amounts of the time of council senior management. The idea is good, but surely we can carry it out in a more humane, sensible and less bureaucratic way.
  Fifthly, the Under-Secretary, who spoke in his usual charming style, said that the Government were keen to keep the council tax down. Actions speak louder than words. This year, continuing from previous years, the Government have made aggregate external finance diverge further from grant-aided expenditure. The aggregate external finance of GAE was 84.7 per cent., but it is down to 84.2 per cent and they have diverged more and more year by year. The more that they diverge, the more that has to be cut, or the council tax has to go up disproportionately, to make up the difference.
  Contrary to that divergence, the issue of convergence concerns COSLA, and the hon. Member for Linlithgow (Mr. Dalyell), greatly. The councils are afraid that the Government are forcing them gradually to bring their budgets in line with the Government's estimates rather than the reality and what the councils, in past years, have determined.
  The next issue is funding of pay increases, which does not happen. The Government, like the previous Government, pretend that pay increases can be paid for through efficiency, which is a complete falsehood. That is just not possible and there is merely a hidden cut. It would be more honest of the Government to fund the pay increases in full. If a budget is not enough to pay for everything, the Government say that there has to be a cut in something, but if affairs are being run in an honourable manner, people do not pretend that pay increases can be funded without increased moneys. The figures provided by COSLA show that the councils have had to produce at least an extra £550 million over the past six years.
  532
  One of the issues that we have been asked to cover this afternoon is housing. The Minister spoke warmly of the amount of money that the Government will put into housing under partnerships and regeneration. He did not stress, however, that this is a "pistol to the head" approach. Councils are being told that they must transfer their stock or they will not get the money. When challenged on that policy by councillors, the Minister said, "It's a free country. You can either agree to go along with this or not." If councils do not go along with it, they get no money. Surely it is possible to put money into councils without having the compulsion to which my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir R. Smith) referred. If councils run things well and tenants are happy with what they are doing, they should be given the money without having a pistol at their head.
  There has been a steep decline in housing repairs funded from the public purse, particularly repairs to our city tenements. Last year, Glasgow spent about one sixth of what it had spent on average in the previous nine years on repairs and grants for repairs to tenements, with the aid of grants from the Government. In Edinburgh, the decline is to one thirteenth of the average in the previous nine years. There is almost a total standstill in the repairs to tenements. The Government should deal with that huge problem.
  The Government may claim, quite fairly, that they removed the ring fence around this money, and that it is now up to the councils. If councils are tightly squeezed on all financial fronts, they will take money from wherever they can get it, and they have taken money from that source. If the Government are serious, they must either ring-fence those funds again or do something to ensure that cities continue to repair their tenements.
  The result of the Government focusing their modest increases on particular spheres is that other spheres of activity have continuing cuts. Although the cuts may seem quite small, they come after many years of Tory cuts. There are cuts in councils' care for the environment, and severe cuts in their support for sport. The Sports Council has estimated that the support that councils give to sport has decreased by half over the past five years. There is a huge decrease in the support of voluntary organisations, many of which have collapsed or have had to make severe cuts. Citizens advice bureaux have had to reduce or lay off staff, or open less. There has been a reduction in funding for social work, road repairs, community education and help for young people and youth activity, which would prevent many of the problems in our communities.
  The Government are perpetuating that death by a thousand cuts in the fabric of our society. They are dismantling our communities. It is a gradual rather than a dramatic decline each year. Our communities are in much worse shape than they used to be, and it is disappointing that the Government have not put in more money to help them.
  We must have a rational review of local government finance. The whole business of 85 per cent. coming from the central purse with councils raising only 15 per cent., together with the controls that the Government feel are necessary, is not acceptable. I hope that the Minister will agree that the Scottish Parliament should, at an early stage, have a thorough review of local government finance, so that, in a few years' time, we can lay the

  533
  foundations of a more rational system. This is not a rational system: it is profoundly unsatisfactory. We are disappointed that the Government have turned the ship around so little. After two years of large cuts following the Tories' budget, there is now a modest increase. That is disappointing, because many parts of local government are suffering severely.
  4.59 pm
  Mr. James Wray: This subject is dear to my heart. I have listened to the facts and figures that hon. Members from both sides of the House have given. I know how badly the previous Government did on housing. At the time, I was a councillor, and the houses in my area were rotten with damp, there were rats and, every day of the week, the council received claims for compensation due to the damage caused to household effects. People were living about 500 to the acre, although the number was subsequently reduced to 150.
  When I speak of housing expenditure, I refer to Glasgow, but also to Scotland as a whole. It is a damn shame that, between 1991 and 1992, the housing support grant was cut from £101 million to nil in a city where those statistics have hardly ever changed. Under the last Government, some 7.1 per cent. of houses were empty, and 5.8 per cent. are still empty. Moreover, additional expenditure has been necessary because of the damp and the cuts—problems that arose under the last Government. In 1993, 1,300 houses were pulled down in Philadelphia; meanwhile, some 2,335 were demolished in Glasgow.
  Hon. Members have read facts and figures from pieces of paper. They have mentioned housing expenditure of £643 million in 1995–96, and of £700 million-odd in 1996–97. In 1977, the figure was £464 million; and in 1978, it was about £498 million. That represents an increase of 6 per cent.—an increase of £30 million—but, when we examine the figures closely, we see that there is a shortfall of £479 million. The Minister says that £300 million will be invested over three years, but that falls short of what is needed.
  Glasgow contains about 103,000 houses, and owes 90 per cent. of the debt to the Public Loans Board—£1.1 million. Given the need for repairs and renovations, an investment of some £1.7 million is needed. Glasgow is trying to offload houses on to anyone who will take them, and I am a little concerned about some of the organisations that are interested. I am particularly worried about the private finance initiative. If the Government write off the debt, as they should, they should not saddle the Scottish Parliament with that £1.1 million. If they want a successful Scottish Parliament, they should take that into account.
  Mining—there are between 800 and 900 shafts—has caused Glasgow a number of problems over the years. Furthermore, because of the neglect for which Tory landlords were responsible, people were living five or 10 to a house in slums. When those houses began to decay and fall down, the landlords ran for their lives, offering the houses two a penny to whoever would buy them to avoid the responsibility of a demolition order. That is the problem that Glasgow has inherited. I have spent 15 years in Glasgow, and, every minute, Iandlords who had been charging extortionate rents were trying to give away their properties.
  The last Government had plenty of time to do something about that. They certainly increased housing expenditure in Scotland and, indeed, in Great Britain,
  534
  but no one knows where the money went. Would the city of Glasgow still be in chaos if all those millions of pounds were invested in housing? In 1993, unemployment there was about 15.4 per cent.—the fourth highest in Britain. We had all those problems. There was not much money. How the hell could the previous Government cut the support grant and give those people nothing?
  Under the Housing (Scotland) Act 1966, claims could be made if household effects were damaged through no fault of the tenant. In one year, about 800 claims were made to Glasgow council. That cost it hundreds of thousands of pounds. It is still burdened with that, and with all the dampness problems. Unless a Government invest the money that is needed, nothing can be done about the problem. That is why Glasgow councillors are saying that they cannot cope. There is no money to cope.
  For years, houses were demolished out of the housing revenue account. Under new rules, if people demolish houses and the land is then made available to the council for other purposes—Lothian, Edinburgh and Dundee councils have operated the system—the expenditure can be transferred to the general fund. That is how Glasgow will have a £22 million surplus this year, but, with that state of affairs, it was sad that the previous Government did not inform local authorities of the responsibilities, and what their entitlement was.
  Therefore, I hope that, when we add up the figures, we do not try to hoodwink people. Expenditure was £749 million in 1995–96. It was £643 million in 1996–97. In the current year, it is £464 million, which is the lowest expenditure of any Government over the years. Then they say that we have a 6 per cent. increase by raising that expenditure to £494 million. Obviously, people can add up. They can do their sums. Where I came from, we were taught to do our sums. I do not need to look at papers; I can add it all up in my head like a check machine. All I am saying is: be honest, be fair and get rid of that problem. For decades, people have suffered. A total of 23,700 houses are unfit for human habitation and should be repaired.
  As long as the matter is neglected and the money is not invested, we are creating a big problem. About £1 billion of housing benefit is being paid to landlords, hotels and so on. That creates health problems, putting a burden on the health bill. Let us have a real look and a review of all the various Departments to find out where the money is going because, in 1995–96, the money certainly did not go on housing.
  5.8 pm
  Mr. Alex Salmond: I agreed with just about everything that was said by the Liberal Democrat spokesperson, the hon. Member for Edinburgh, West (Mr. Gorrie), so in the interests of helping other hon. Members to get into the debate, I will not repeat it all. However, I did not agree with his assessment of the speech by the hon. Member for Edinburgh, South (Mr. Griffiths).
  At a superficial level, that speech might have been seen as a fawning attempt to get the hon. Gentleman's job back, but at a deeper level, it was profoundly subversive. As I listened to it, I suddenly realised that he was impersonating

  535
  Harry Enfield impersonating the Prime Minister as the Vicar of St. Albion. By wit and irony, he was exposing the fallacy behind new Labour's presentation of its economics.
  Mr. Nigel Griffiths: Will the hon. Gentleman give way?
  Mr. Salmond: The hon. Gentleman might allow me to tease him without—
  Mr. Griffiths: Will the hon. Gentleman give way?
  Mr. Salmond: Oh, very well.
  Mr. Griffiths: The hon. Gentleman should not be allowed to divert the House from the abysmal record of Scottish National party councils. The Scottish nationalists promised to give senior citizens a £10 Christmas bonus, then repudiated the promise. They increased concessionary fares for senior citizens by 2,000 per cent. when they took over one council. Those are the facts. That is why we have to take countermeasures against abysmal SNP councils.
  Mr. Salmond: Presumably that is why, in last year's survey of almost 30 local authorities in mainland Scotland, the three SNP councils came first, second and third—gold, silver and bronze—for the services that they provide to constituents. The three bottom places and three wooden spoons were taken by three Labour councils. I am sure that many Labour Members recognise the councils that fell down so badly in those ratings.
  Perhaps I was crediting the hon. Gentleman with too much sophistication. As I listened to him, I believed that he was exposing the fallacy behind new Labour's presentation. The Tory Front Benchers are so incompetent that they did not compare the spending levels for Scottish local government during the Tory years with those for the five years covered by the comprehensive spending review. As the hon. Member for Edinburgh, West said, those figures show a sharp real-terms fall in local government expenditure in Scotland. The Tories were probably embarrassed to make that point, thinking that they would look profligate.
  When the right hon. Member for Hamilton, South (Mr. Robertson) considered the 1994–95 settlement for Scottish local authorities from the Opposition Front Bench, he did not say that it was profligate, open-handed or generous. He said that it was niggardly and that the Conservatives should be ashamed of it. If that settlement were applied to the years covered by the comprehensive spending review, there would be more than £1 billion extra for Scottish local government to spend.
  We should deal in realities. This settlement is certainly greater than last year's or that for the year before in real terms, but a comparison of the last five years of the Tory Government with the years covered by the comprehensive spending review shows, as the hon. Member for Edinburgh, West rightly said, that there is less money available for Scottish local government.
  536
  I am sure that the Minister for Home Affairs and Devolution is not too distressed that this is the last time that he will be responsible for taking us through the complexities of Scottish local government finance.
  Mr. Malcolm Savidge rose—
  Mr. Salmond: Forgive me, but I want to help others to get into the debate.
  I salute the unfailing courtesy of the hon. Member for Western Isles (Mr. Macdonald). The local government Minister in the new Scottish Parliament, from whichever party, could do a lot worse than present his or her case with the same courtesy. I hope that that salute is not too embarrassing for the hon. Gentleman.
  I should like to pursue one point that arose from our earlier exchanges. There was some debate about where the figures came from for the Convention of Scottish Local Authorities' argument that convergence would reduce expenditure in Scottish local government by £300 million compared with Government-supported expenditure. The COSLA brief talks of
  "the move to use those guidelines as a means to constrain expenditure so that eventually overall expenditure reduces by £300 million to converge with Government Supported Expenditure. Accountability should rest with councils in terms of justifying, to their electorate, their expenditure decisions".
  If central Government are controlling the revenue available to Scottish local authorities, at least the expenditure decisions should be for the councils to make, so that the electorate can judge them on those decisions.
  The strongest point made by the hon. Member for Edinburgh, West was that even self-financing expenditure is counted on the public sector borrowing requirement and could be used to reduce the Scottish block. Even if Councillor David Begg found a method of extorting £10,000 from every motorist going into Edinburgh—who knows, that may not be beyond the bounds of possibility—such self-financing public expenditure that was invested by the council would hit the Scottish block under the current terms of the PSBR and the evaluation of public sector finance.
  The dangers for the Scottish Parliament are all too clear. Unless the definition is changed, the Scottish Parliament will be driven to increasingly draconian measures on controlling expenditure levels, because it will be frightened of the implications to the Scottish block of even self-financing expenditure being run at local level. That is an important point and I hope that the Minister will respond to it in his reply to the debate.
  I hope that the Minister is aware of the considerable concern about the structure of new housing partnerships. I doubt whether any hon. Member would not agree that in certain circumstances it would be a good thing if communities took over the running of estates. No one is against that. However, people are against the idea that people should be bludgeoned, blackmailed, bribed or disadvantaged if they choose to remain as council tenants. Of course some councils in Scotland have bad records of running council stock. However, other councils have very good records. Over the years, various ballots have shown council ownership to be a popular option.
  When we debated new town housing, tenants argued with hon. Members—and at the time they were supported by the then Opposition—that council ownership should be

  537
  an option in the ballot process. It is not good enough for the Minister to tell us that nothing can be done to help councils with housing finance as long as housing remains in the public sector. There have been many write-offs and reschedulings and transfers of debt across a range of industries within the public sector, and we are entitled to demand equal and even-handed treatment. Whatever incentives and finance is being applied to housing finance in Scotland, it should not discriminate against the social rented sector and various councils.
  Mr. Douglas Alexander: In the light of what he has just said, can the hon. Gentleman assure the House that in the coming weeks and months his party's spokesman on housing will not use terms such as "privatisation" to describe community ownership?
  Mr. Salmond: Privatisation is quite an interesting description. Brian Weddell, Edinburgh's housing convener, said:
  "the ruling Labour administration is opposed to the wholesale privatisation of Edinburgh's council housing … It is one thing to advise people of their options—it is another to hold a gun to their head".
  I support those comments. Perhaps the hon. Gentleman should speak to his hon. Friends before he makes any further interventions.
  Of course partnership could well be an option for certain communities, but it is not reasonable to disadvantage communities and council tenants who wish to remain in the public sector. I hope that the local government Minister has analysed the points made by Shelter about new housing partnerships. Shelter feels that they will offer less rent protection, less secure tenancies, no statutory duty to house homeless people, and insufficient guarantees for future improvement of the stock. Those are real points that need to be addressed if we are to help people.
  This year's local government settlement for Scotland is better than those of the past two years, which were the most disgraceful settlements in a decade. It cannot be argued that this year's settlement represents an open-handed new deal for Scottish local government. It is a continuation of real-terms decreases in public expenditure in Scotland, and should be exposed as such.
  5.18 pm
  Mr. Oliver Letwin: We have had an interesting debate concentrating on three key points. First, there has been a great deal of discussion as to whether or not this year's settlement is a generous one. We heard the revivalism of the hon. Member for Edinburgh, South (Mr. Griffiths) in a speech which I very much enjoyed. As is the wont of the present Government, he added together the figures for three years, subtracted an inflation rate for the next three years—with a prescience that the Chancellor of the Exchequer does not share—and produced what he described as a splendidly generous settlement. We were then treated to some doses of the truth by the hon. Members for Edinburgh, West (Mr. Gorrie), for Glasgow, Baillieston (Mr. Wray) and for Banff and Buchan (Mr. Salmond).
  This is not a generous settlement. That is not surprising, because there is no such thing as a generous settlement. When the Government spend, or allow other people to
  538
  spend, taxpayers' money, that is not an open-handed form of moral generosity but merely a means of transferring money from one pocket to another.
  That may be good or bad, but it is certainly not generous to do more of it; nor have the Government done more of it. As we have heard repeatedly today, they have done rather less of it, overall, even than the previous Government. If they were honest, they would explain clearly and honourably that they have reasons for controlling public expenditure, but they do not want to do that because they want to gull themselves and their electors into believing that they are being generous. That has already begun to catch up with them today, and when the hon. Member for Banff and Buchan rises as a ghastly phoenix from the ashes of the Secretary of State's policy, they will know what they have done.
  The lack of that so-called generosity means that local taxpayers will pay considerably more this year. As the Minister admitted, their tax rises will be around 5 per cent. on average. As my hon. Friend the Member for Woodspring (Dr. Fox) said, some local tax rises will be considerably higher, which will not be greeted with great joy, as it would not be anywhere in the country.
  Local government in Scotland and in the rest of the United Kingdom faces the greatest uncertainty that it has ever faced, as a result of Government policies. Here we enter a terrain of great seriousness. My hon. Friend the Member for Woodspring correctly described the Government's replacement for what they called crude and universal capping as a system of arbitrary and retrospective capping.
  In an interesting speech, the hon. Member for Edinburgh, West, supported by the hon. Member for Banff and Buchan, argued that self-financed expenditure should be removed from the public sector borrowing requirement. That is a long-running call from local government. I remember such calls in the late 1970s and there has been a running discussion ever since.
  There has also been huge objection to universal capping, and perhaps such capping, and the constraints of PSBR accounting, are crude—I accept that, as anyone who has been involved in local government is bound to do—but at least the old system had clarity. Through the present arrangement, the Government consciously underfund the total expenditure that they believe to be appropriate for local government—that is the difference between the grant-aided expenditure and the guideline spending—and then tell local authorities that they cannot and will not let them know at which point they are spending too much.
  That is an extraordinary way of conducting public policy and government. If it were done in relation to the private sector, I have no doubt that it would lead Ministers to be subject to judicial review. It would be regarded as an arbitrary action to tell a private individual that he would be informed only after he had acted whether his actions were proper in the light of the law. That is exactly what the Government are telling local authorities in Scotland: that they will not tell them what will ex post facto be judged to be wrong behaviour.
  When the Government begin to see what happens and get the reaction that will undoubtedly come from some Labour councils, they will reverse the policy, because not only Scotland but the government of the whole kingdom will founder on such a policy.
  5.24 pm
  The Minister for Home Affairs and Devolution, Scottish Office (Mr. Henry McLeish): I will very much welcome being in the Scottish Parliament after 1 July, if I am elected, so that we can hear a Conservative Opposition who know something about them speaking up on Scottish issues. Conservative Members have shown breathtaking brass neck and breathtaking ignorance of what is happening in local government. After 19 years of neglect, we have a Government who are addressing the substantial issues in Scottish life.
  During 2001–02, an extra £840 million will be provided, including additional resources for pre-school education. That will mean that we start to tackle the issues that matter to ordinary people, including education. We will look at service delivery, and the Government are committed to improving public services after that period of total neglect.
  The hon. Member for Woodspring (Dr. Fox) referred to council tax collection levels, and said that £50 million was added in the last year. I remind the hon. Gentleman that £810 million was added from 1979 to 1997, when the Tories were thrown out by the Scottish people. If one thing contributed to the culture of non-payment, it was the most monumental piece of stupidity called the poll tax. That is the charge that the Conservatives cannot defend.
  We are starting to reverse the situation in Scotland with the support of all local authorities, who take this issue seriously. That includes Scottish National party, Labour and independent councils. We think that people should pay their debts to local authorities—something that was never taken seriously by the Conservative Government, and certainly has not been taken seriously by the Conservative Opposition. The Conservatives now want to be spending more after a period of neglect. That is dishonest in relation to Scots who want extra investment. The Labour Government are now pushing forward investment.
  The hon. Member for Edinburgh, West (Mr. Gorrie) berated the Government for their lack of investment, but he grudgingly conceded that there had been some improvement. We cannot turn around 19 years of neglect in the space of two years. However, we are putting in substantial investment and we are making a start, and the services that he addressed are the focus for the Government.
  My hon. Friend the Member for Edinburgh, South (Mr. Griffiths) made the point that in terms of the foundation years of pre-school education, the Government are delivering. That should be welcomed by families in the constituency of the hon. Member for Edinburgh, West. I hope that he would concede that that is happening throughout the country.
  Mrs. McKenna: This is an historic occasion, since it is the last time that there will be a Scottish local government finance debate in this House. It is important to recognise that, and to congratulate Ministers on the work that they have done on local government. Despite what all the opposition parties have said, all local authorities and the Convention of Scottish Local Authorities have welcomed the real-terms increase in the settlement. It is important to put that on the record.
  Mr. McLeish: My hon. Friend makes a good point. It has been acknowledged by all organisations in Scotland—especially those representing the 290,000 local
  540
  government workers, and the electors—that the job has been started on investment and that we are making sufficient progress.
  There were many good points in the debate, but it would not be appropriate in the short time available to address all of them. As a matter of courtesy, I can say that the points that have been raised will be the subject of detailed correspondence. I repeat what my hon. Friend the Member for Western Isles (Mr. Macdonald) said at the outset. We look forward to having more time in the Scottish Parliament to debate these important issues. If we can do that, we will serve local government and every constituent in the country well.
  Question put:—
  The House divided: Ayes 291, Noes 19.

  Division No. 66]

  [5.29 pm

  AYES

  Abbott, Ms Diane

  Cook, Frank (Stockton N)

  Ainger, Nick

  Cooper, Yvette

  Alexander, Douglas

  Corston, Ms Jean

  Allen, Graham

  Cousins, Jim

  Anderson, Donald (Swansea E)

  Cranston, Ross

  Armstrong, Ms Hilary

  Crausby, David

  Ashton, Joe

  Cryer, Mrs Ann (Keighley)

  Austin, John

  Cryer, John (Hornchurch)

  Barnes, Harry

  Cummings, John

  Barron, Kevin

  Cunliffe, Lawrence

  Battle, John

  Dalyell, Tam

  Beard, Nigel

  Darvill, Keith

  Beckett, Rt Hon Mrs Margaret

  Davey, Valerie (Bristol W)

  Begg, Miss Anne

  Davidson, Ian

  Bell, Martin (Tatton)

  Davies, Rt Hon Denzil (Llanelli)

  Benn, Rt Hon Tony

  Davies, Geraint (Croydon C)

  Bennett, Andrew F

  Davis, Terry (B'ham Hodge H)

  Bermingham, Gerald

  Dawson, Hilton

  Berry, Roger

  Dean, Mrs Janet

  Best, Harold

  Denham, John

  Betts, Clive

  Dewar, Rt Hon Donald

  Blackman, Liz

  Dismore, Andrew

  Blears, Ms Hazel

  Dobbin, Jim

  Blizzard, Bob

  Donohoe, Brian H

  Borrow, David

  Doran, Frank

  Bradley, Keith (Withington)

  Dowd, Jim

  Bradley, Peter (The Wrekin)

  Drew, David

  Bradshaw, Ben

  Drown, Ms Julia

  Brinton, Mrs Helen

  Eagle, Maria (L'pool Garston)

  Brown, Rt Hon Nick (Newcastle E)

  Ennis, Jeff

  Brown, Russell (Dumfries)

  Etherington, Bill

  Browne, Desmond

  Field, Rt Hon Frank

  Buck, Ms Karen

  Fisher, Mark

  Burden, Richard

  Fitzpatrick, Jim

  Burgon, Colin

  Fitzsimons, Lorna

  Butler, Mrs Christine

  Flint, Caroline

  Campbell, Mrs Anne (C'bridge)

  Flynn, Paul

  Campbell, Ronnie (Blyth V)

  Follett, Barbara

  Canavan, Dennis

  Foster, Michael Jabez (Hastings)

  Cann, Jamie

  Foster, Michael J (Worcester)

  Caplin, Ivor

  Foulkes, George

  Caton, Martin

  Galloway, George

  Cawsey, Ian

  Gapes, Mike

  Chapman, Ben (Wirral S)

  Gardiner, Barry

  Chaytor, David

  George, Bruce (Walsall S)

  Chisholm, Malcolm

  Gerrard, Neil

  Clapham, Michael

  Gibson, Dr Ian

  Clark, Paul (Gillingham)

  Gilroy, Mrs Linda

  Clarke, Rt Hon Tom (Coatbridge)

  Godman, Dr Norman A

  Clarke, Tony (Northampton S)

  Godsiff, Roger

  Clwyd, Ann

  Gordon, Mrs Eileen

  Coleman, Iain

  Griffiths, Jane (Reading E)

  Colman, Tony

  Griffiths, Nigel (Edinburgh S)

  Connarty, Michael

  Griffiths, Win (Bridgend)

  541

  Grocott, Bruce

  McGuire, Mrs Anne

  Grogan, John

  McIsaac, Shona

  Hall, Mike (Weaver Vale)

  McKenna, Mrs Rosemary

  Hanson, David

  Mackinlay, Andrew

  Heal, Mrs Sylvia

  McLeish, Henry

  Healey, John

  McNulty, Tony

  Henderson, Doug (Newcastle N)

  Mactaggart, Fiona

  Henderson, Ivan (Harwich)

  McWalter, Tony

  Hepburn, Stephen

  Mahon, Mrs Alice

  Heppell, John

  Mallaber, Judy

  Hesford, Stephen

  Marsden, Gordon (Blackpool S)

  Hewitt, Ms Patricia

  Marsden, Paul (Shrewsbury)

  Hill, Keith

  Marshall, David (Shettleston)

  Hodge, Ms Margaret

  Marshall, Jim (Leicester S)

  Hood, Jimmy

  Marshall-Andrews, Robert

  Hope, Phil

  Maxton, John

  Hopkins, Kelvin

  Meale, Alan

  Howarth, Alan (Newport E)

  Merron, Gillian

  Howarth, George (Knowsley N)

  Michie, Bill (Shef'ld Heeley)

  Hughes, Ms Beverley (Stretford)

  Miller, Andrew

  Humble, Mrs Joan

  Mitchell, Austin

  Hurst, Alan

  Moffatt, Laura

  Iddon, Dr Brian

  Moonie, Dr Lewis

  Illsley, Eric

  Moran, Ms Margaret

  Jackson, Ms Glenda (Hampstead)

  Morgan, Ms Julie (Cardiff N)

  Jackson, Helen (Hillsborough)

  Morley, Elliot

  Jenkins, Brian

  Morris, Ms Estelle (B'ham Yardley)

  Johnson, Alan (Hull W & Hessle)

  Mullin, Chris

  Johnson, Miss Melanie

  Murphy, Denis (Wansbeck)

  (Welwyn Hatfield)

  Naysmith, Dr Doug

  Jones, Barry (Alyn & Deeside)

  Norris, Dan

  Jones, Helen (Warrington N)

  O'Brien, Bill (Normanton)

  Jones, Ms Jenny

  O'Brien, Mike (N Warks)

  (Wolverh'ton SW)

  O'Hara, Eddie

  Jones, Jon Owen (Cardiff C)

  O'Neill, Martin

  Jones, Martyn (Clwyd S)

  Organ, Mrs Diana

  Kaufman, Rt Hon Gerald

  Palmer, Dr Nick

  Keeble, Ms Sally

  Pearson, Ian

  Keen, Alan (Feltham & Heston)

  Perham, Ms Linda

  Keen, Ann (Brentford & Isleworth)

  Pickthall, Colin

  Kemp, Fraser

  Plaskitt, James

  Khabra, Piara S

  Pollard, Kerry

  King, Ms Oona (Bethnal Green)

  Pope, Greg

  Kingham, Ms Tess

  Pound, Stephen

  Kumar, Dr Ashok

  Powell, Sir Raymond

  Lawrence, Ms Jackie

  Prentice, Ms Bridget (Lewisham E)

  Laxton, Bob

  Prentice, Gordon (Pendle)

  Lepper, David

  Prosser, Gwyn

  Leslie, Christopher

  Purchase, Ken

  Levitt, Tom

  Quinn, Lawrie

  Lewis, Ivan (Bury S)

  Radice, Giles

  Linton, Martin

  Rammell, Bill

  Livingstone, Ken

  Rapson, Syd

  Lloyd, Tony (Manchester C)

  Raynsford, Nick

  Love, Andrew

  Reed, Andrew (Loughborough)

  McAllion, John

  Reid, Rt Hon Dr John (Hamilton N)

  McAvoy, Thomas

  Roche, Mrs Barbara

  McCabe, Steve

  Rooker, Jeff

  McCafferty, Ms Chris

  Rooney, Terry

  McCartney, Ian (Makerfield)

  Ross, Ernie (Dundee W)

  McDonagh, Siobhain

  Rowlands, Ted

  Macdonald, Calum

  Roy, Frank

  542

  Ruane, Chris

  Temple-Morris, Peter

  Russell, Ms Christine (Chester)

  Thomas, Gareth (Clwyd W)

  Ryan, Ms Joan

  Thomas, Gareth R (Harrow W)

  Salter, Martin

  Tipping, Paddy

  Savidge, Malcolm

  Touhig, Don

  Sawford, Phil

  Trickett, Jon

  Sedgemore, Brian

  Truswell, Paul

  Shaw, Jonathan

  Turner, Dennis (Wolverh'ton SE)

  Sheerman, Barry

  Turner, Dr Desmond (Kemptown)

  Sheldon, Rt Hon Robert

  Turner, Dr George (NW Norfolk)

  Shipley, Ms Debra

  Twigg, Derek (Halton)

  Skinner, Dennis

  Twigg, Stephen (Enfield)

  Smith, Angela (Basildon)

  Vaz, Keith

  Smith, Miss Geraldine

  Vis, Dr Rudi

  (Morecambe & Lunesdale)

  Walley, Ms Joan

  Smith, Jacqui (Redditch)

  Wareing, Robert N

  Smith, John (Glamorgan)

  Watts, David

  Smith, Llew (Blaenau Gwent)

  Whitehead, DrAlan

  Soley, Clive

  Wicks, Malcolm

  Southworth, Ms Helen

  Williams, Alan W (E Carmarthen)

  Squire, Ms Rachel

  Wills, Michael

  Stevenson, George

  Winnick, David

  Stewart, David (Inverness E)

  Winterton, Ms Rosie (Doncaster C)

  Stewart, Ian (Eccles)

  Wise, Audrey

  Stinchcombe, Paul

  Wood, Mike

  Stoate, Dr Howard

  Worthington, Tony

  Stott, Roger

  Wray, James

  Strang, Rt Hon Dr Gavin

  Wright, Anthony D (Gt Yarmouth)

  Stringer, Graham

  Wright, Dr Tony (Cannock)

  Stuart, Ms Gisela

  Wyatt, Derek

  Sutcliffe, Gerry

  Tellers for the Ayes:

  Taylor, Rt Hon Mrs Ann

  Jane Kennedy and Mr. David Jamieson.

  (Dewsbury)

  NOES

  Ballard, Jackie

  Hughes, Simon (Southwark N)

  Breed, Colin

  Michie, Mrs Ray (Argyll & Bute)

  Bruce, Malcolm (Gordon)

  Öpik, Lembit

  Burstow, Paul

  Rendel, David

  Campbell, Menzies (NE Fife)

  Russell, Bob (Colchester)

  Cotter, Brian

  Sanders, Adrian

  Davey, Edward (Kingston)

  Smith, Sir Robert (W Ab'd'ns)

  Foster, Don (Bath)

  Tonge, Dr Jenny

  Hancock, Mike

  Tellers for the Noes:

  Harris, Dr Evan

  Mr. Donald Gorrie and Mr. Phil Willis.

  Heath, David (Somerton & Frome)

  Question accordingly agreed to.
  Resolved,
  That the Local Government Finance (Scotland) Order 1999, dated 28th January, a copy of which was laid before this House on 1st February, be approved.

  Local Government Finance (Scotland)
    HOUSING SUPPORT GRANT (SCOTLAND) ORDER 1999
    That the draft Housing Support Grant (Scotland) Order 1999, which was laid before this House on 28th January, be approved.—[Mrs. McGuire.]

    Constitutional Law
    5.42 pm
    The Minister for Home Affairs and Devolution, Scottish Office (Mr. Henry McLeish): I beg to move,
    That the draft Scotland Act 1998 (Transitory and Transitional Provisions) (Finance) Order 1999, which was laid before this House on 4th February, be approved.
    Mr. Deputy Speaker (Mr. Michael Lord): With this it will be convenient to discuss the following motion:
    That the draft Scotland Act 1998 (Transitory and Transitional Provisions) (Appropriations) Order 1999, which was laid before this House on 4th February, be approved.
    Mr. McLeish: For convenience, I shall refer to the orders as the finance order and appropriations order respectively.
    It is challenging and exciting to realise that this is the last time that the House will be called upon to consider the detailed public spending plans for Scotland. We are now just 12 weeks away from the elections to the Scottish Parliament and 19 weeks away from that Parliament assuming its full powers. From then on, the House will be required only to agree the size of grant to be paid annually into the Scottish Consolidated Fund. It will be for the Scottish Parliament to determine how its overall budget should be decided and spent. So this is truly an historic occasion.
    Of course, the management and control of public spending in Scotland will not be passed into a void: it will properly be a matter for the Parliament to decide upon its own financial procedures. Meanwhile, a great deal of work has already been done to prepare the ground. In particular, the cross-party consultative steering group has signed off a report from the financial issues advisory group that makes detailed proposals for all the necessary budgeting, monitoring, accounting and audit arrangements. I do not, of course, wish to pre-empt the decisions of the Parliament in any way, but I believe that the template provided for it by RAG is of the highest quality. It reflects enormous credit upon the expertise of the group's members who gave freely of their time and knowledge. With your permission, Madam Speaker, I place on record our thanks for all their work.
    However, FIAG's report provides only a template for the future. Our more immediate task is to get from where we are now—a Westminster-based public expenditure system—to whatever new system is adopted by the Scottish Parliament. We must do so with the minimum of disruption to public services and the minimum of inherited constraint placed upon the Parliament. Meanwhile, we must also maintain the highest possible standards of public expenditure and control throughout the process.
    That is what the orders we are discussing today are all about. As their titles strongly suggest, they are transitory and transitional. They are specifically designed to deal only with the financial year 1999–2000 and to get us across during that year from a Westminster public expenditure regime to one that is determined by, and is the responsibility of, the Holyrood Parliament, and to do so in the context of a financial year when spending responsibility will fall to the Secretary of State for Scotland in the first part of the year and, from 1 July, to the Scottish Executive.
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    Our basic strategy is simple. We have already made arrangements to bring into being on 1 April the Scottish Consolidated Fund. The next step is to set out a financial framework for the transitional year. That the finance order does. However, without actual funds to spend, such a framework will be worthless, so we must give authority to allow expenditure actually to take place. That is why we require an appropriation order that will convert the theory set out in the finance order into the reality of spending on front-line services.
    I shall move briefly to the key points of the finance order. In essence, it puts in place for the transitional year, arrangements governing the spending of, and accounting for, money paid out of the Scottish Consolidated Fund. There are similar provisions in a host of Acts of this Parliament, ranging from the Exchequer and Audit Departments Act 1866 to the National Audit Act 1983.
    The order sets down the conditions under which sums may be paid out of the Scottish Consolidated Fund during the transitional year. It puts in place arrangements to ensure that any payments from the fund relate to functions that are, or will be, devolved and that they have the necessary legislative authority.
    The next main provision transfers spending authority for balances unspent at the date of devolution from my right hon. Friend the Secretary of State to Scottish Ministers and, in certain cases, to the Parliamentary Corporation. This is important because it will enable funding for public services to be approved for the entire transitional year and allocations to move seamlessly from my right hon. Friend to the control of Scottish Ministers without further approval.
    While those provisions concentrate on the spending of public money, others ensure that funds are properly accounted for. The finance order specifies accounting arrangements for the transitional year in some detail. It requires the Secretary of State to prepare accounts for transactions that take place prior to devolution and places an identical obligation on Scottish Ministers for the period after that.
    Mr. Tam Dalyell: Have any arrangements been made for a contingency fund or for what should happen in case of contingencies?
    Mr. McLeish: That will be dealt with, but proper arrangements are in place for a contingency fund, which, as my hon. Friend suggests, is crucial. We operate that, within our financial arrangements. It is being, and will be, taken care of.
    Dr. Norman A. Godman: Organisations in receipt of public funding will be anxious to ensure that the transitional period flows as smoothly as possible. I cite the example of the Caledonian McBrayne ferry company, which hopes soon to place a contract for the construction of a large vessel. It is important that those negotiations continue. My hon. Friend will not be surprised that I expect that contract to be placed with Ferguson's at Port Glasgow.
    Mr. McLeish: I shall resist commenting on my hon. Friend's latter point, but a seamless transition to the new, Parliament is vital. It would be devastating if local authorities, health boards, trusts and other organizations

    545
    felt that things could be disrupted. As I shall outline later, when the newly-elected Parliament is established, it will be able to examine the finances of the new office of the Scottish Executive. All political parties must accept that continuity is essential.
    The Secretary of State will be required to prepare accounts for transactions that take place prior to devolution, and an identical obligation is placed on Scottish Ministers for the period after. Both sets of accounts are to be audited by the Comptroller and Auditor General. They will then be laid before this House and the Scottish Parliament respectively.
    Subsequently, the Scottish Parliament will be required to legislate on the accounting arrangements—building, no doubt, on the financial issues advisory group's recommendations. However, we must set down accounting arrangements at this stage to ensure that accountability is guaranteed for the transitional phase. It is simply an added safeguard that if we have continuity of funding, we must also have continuity of accounting and proper auditing.
    Mr. Dalyell: Both my hon. Friend the Minister and I have, at various times, been members of the Public Accounts Committee. What is the role of the CAG? Is it correct to say that he has oversight over all funds during this period?
    Mr. McLeish: My hon. Friend is absolutely right. In an earlier debate in the House on what became the Scotland Act 1998, the Chairman of the Public Accounts Committee, the right hon. Member for Haltemprice and Howden (Mr. Davis), made an excellent contribution and we adopted the points he made. There is unanimity in the House that the CAG must deal with the transitional year to allow continuity of purpose.
    Because we are determined that public services should be accountable at all times, we have tasked the CAG with the audit of Scottish spending bodies until the Holyrood Parliament is in a position to implement effective arrangements of its own. Similar considerations apply to the examination of economy, efficiency and effectiveness. The CAG will retain responsibility for that task throughout the transitional year. In addition, the order enables him, if necessary, to complete those studies initiated during the transitional year that he has not finished at year end.
    The question of accountability clearly does not end with the specification of suitable financial accounting and value-for-money arrangements. We also need to make more general provisions to ensure that Ministers and officials remain accountable until the Scottish Parliament has put its own arrangements in place. Therefore, the order requires the appointment of accounting officers for both pre-devolution and post-devolution periods.
    Although much of the order rightly concentrates on matters associated with the use and management of the Scottish Consolidated Fund, it also makes arrangements to continue the payment of certain designated receipts into the UK Consolidated Fund. Those receipts mostly relate to fines and interest payments, and are currently paid into the UK Consolidated Fund. They do not form part of the Scottish Office budget. The order ensures that those arrangements continue. The majority of receipts are not subject to those special considerations and the order
    546
    provides for those, in so far as they relate to functions that are or will be devolved, to be paid into the Scottish Consolidated Fund or, where necessary, appropriated in aid.
    The final main provisions of the order are of a relatively technical nature. The order allows the continuation of the Registers of Scotland Trading Fund for the remainder of the transitional year. Thereafter, it will be for the Parliament to decide on the financial and control arrangements for that body. In addition, the order allows the payment of a salary to the Auditor General for Scotland, thus allowing the Parliament to fill the post quickly—I cannot emphasise the importance of that too strongly—so that the incumbent can get on with the necessary planning work and be in a position to take up his full duties on 1 April 2000.
    Mr. Dennis Canavan: The statutory instrument entitled Constitutional Law Devolution, Scotland refers to certain financial arrangements regarding national health service trusts. Under the current Administration, there appears to be some reluctance, on spurious grounds of commercial confidentiality, to reveal the receipts coming in from the sale of NHS buildings. Will the Scottish Administration, accountable to the Scottish Parliament, be able to divulge such important information to Members of the Scottish Parliament, or will there still be control exerted from Westminster on the spurious grounds of commercial confidentiality?
    Mr. McLeish: My hon. Friend raises two issues, the first of which is commercial confidentiality; that is unaffected by the provisions of the order for the auditing, accounting or the work of the Scottish Parliament and the new Executive. The second issue is that of control in Scotland. We are transferring to Scotland, as a devolved responsibility, the health service in Scotland. In the transitional year, the CAG will be involved, as he is at present; however, after April 2000, it will be fully a matter for the Scottish Parliament, the Scottish Executive and the people of Scotland in their entirety.
    The order caters for the possibility that it may be necessary to make contingency payments from the fund during the transitional year—a point raised by my hon. Friend the Member for Linlithgow (Mr. Dalyell). Here, too, the order builds on existing procedures and the effect is broadly similar to that of the Contingencies Fund Act 1974. As a result, there will be clear limits to payments that may be made by Scottish Ministers. Hon. Members may wish to note that the requirements for reporting any contingency spending during the transitional year to the Scottish Parliament are particularly rigorous.
    The appropriation order is, in effect, the main estimate for the programmes which will, until 1 July, be the responsibility of the Secretary of State for Scotland, and which will thereafter fall to the Scottish Executive. The order provides a statutory basis for spending money. Without it, no spending could take place in 1999–2000–at least until the Scottish Parliament legislated to permit the appropriation of resources from the Scottish Consolidated Fund.
    Traditionally, of course, the estimates of the Scottish Office have been considered by this House as part of the United Kingdom's main estimates. We have had to take a different approach this year because, in order to ensure

    547
    continuity and a seamless transition of responsibility, all Scottish appropriations in 1999–2000–both pre-devolution and post devolution—will be made from the Scottish, rather than the UK, Consolidated Fund. As part of this overall process, the Scottish Consolidated Fund will be established with effect from 1 April. In most other respects, however, the procedure adopted for this year is similar to that followed in the past.
    The appropriation order sets out the ambit of each of the Scottish votes and the aggregate amount of spending permitted under each vote. The separate estimates booklet, which has been available to hon. Members since last week, sets out in more detail the spending plans in respect of each vote. The votes largely replicate existing Scottish Office votes. However, hon. Members will wish to note that, in anticipation of devolution, a number of additional votes have been included, specifically covering the Forestry Commission, which is Scotland vote 10, and the Scottish Parliament, vote 12.
    As I have said, one of our primary objectives has been to avoid constraining the Parliament's ability to allocate resources as it wishes. In practice, many resources must be committed from the start of the year in order to allow organisations such as local authorities, health trusts, and so on, to establish their annual budget. Subject to those constraints, it will remain open to the Scottish Parliament, if it wishes, to revisit the allocations in the order later in the year, and to approve further supplementary appropriation orders as necessary.
    I acknowledge that there is a difficult balance to be struck between maintaining continuity and appropriate forward planning on one hand, and allowing the Parliament freedom to make its own decisions on the other. I think that the process that we have adopted is reasonable, and succeeds in meeting the main objectives that I have described. It has allowed local authorities, and the like, to draw up their budgets for 1999–2000, and it allows the Scottish Parliament to revisit the proposed allocations later in the year, but above all, it provides a springboard for full and effective financial devolution for the future. These orders are an integral and critical part of the transition to the devolved Scottish Parliament, and I commend them to the House.
    5.58 pm
    Mr. Oliver Letwin: We on the Conservative Benches obviously have no objection to the idea of an order which provides for continuity. That is inevitable. Indeed, I ought to add a slight note of thanks and congratulations because we are at least debating these orders on the Floor of the House, as is proper. I hope that the Minister will see fit to recommend to his colleagues in the Welsh Office that similar debates—possibly line-by-line debates—should be held for orders on the transfer of functions to the Welsh Assembly, which many in the House, including some on the Government Benches, would welcome.
    The first order is not unique; it is not even one of a few that the House considers in a year. These days, we consider about 3,000 statutory instruments a year. It is at least helpful to look at some of them in some detail. I want to remark particularly on what the order, unobjectionable as it is in its content and substance, teaches us about constitutional law and our constitution.
    548
    The order is remarkable in various respects. In the first place, it transfers certain authorities and obligations from one set of people to another. Given that we are discussing the creation of a Scottish Parliament by an Act of this Parliament, it might have been thought that the two sets of people involved would be the Members of the two Parliaments, but of course that is not so. The order transfers certain authorities and obligations from one set of Ministers to another set of Ministers. That is not because a mistake has been made; on the contrary, it is because the order is correctly drafted and accurately reflects the current status of our constitution.
    Parliaments are not much involved, before or after the order takes effect, in the details of appropriations. This Parliament considers the bulk of taxation of Scotland and will continue to do so. We do that in great detail in considering Finance Bills. We also have elaborate mechanisms for dealing with efficiency and value for money. We are grateful to the Minister for correctly pointing out that the Government have acceded to the reasoned request of the Chairman of the Public Accounts Committee that there should be Comptroller and Auditor General oversight in the transitional period.
    I hope that the Minister will change his mind and take the opportunity to do what the Under-Secretary of State for Scotland, the hon. Member for Western Isles (Mr. Macdonald), has repeatedly refused to do and seek to instate PAC, National Audit Office or CAG oversight for expenditure in Scotland that is borne, and will continue for the foreseeable future to be borne, at least in part, by moneys raised from English taxpayers. Otherwise, as my hon. Friends and I have repeatedly said, another form of the West Lothian question will be unconsciously and improperly generated.
    Dr. Godman: Although the hon. Gentleman and I were not present at the time, I think that I am right in saying that the House did not seek to scrutinise expenditure in the Northern Ireland Assembly when Stormont was set up. Is that not the case?
    Mr. Letwin: I do not know whether the House sought to do that, but I have checked whether it did, and the hon. Gentleman is right to imply that it did not. However, the mistakes of the past do not justify those of the present. I earnestly beg Ministers to consider whether it would not be to the advantage of the whole Union—Scotland, as well as England and Wales—if there were oversight of efficiency.
    Mr. McLeish: I may be in danger of confusing two issues. If the debate is whether devolution leaves taxation at Westminster, that is accepted and is part of the settlement.
    The second point is that we are dealing in this debate with the transition year. I could have spoken at length about what will happen in Scotland in the run-up to April 2000 and beyond in relation to the auditor general for Scotland, who will have to be appointed, the equivalent of the Public Accounts Committee, which will be established within the Parliament, and all the detailed accounting procedures. The hon. Gentleman will remember that, in a previous debate, I said that my aspiration was that we

    549
    should improve on the position at Westminster so that every pound that is spent in Scotland is subjected to the most robust and rigorous examination.
    Mr. Letwin: Yes, I am aware of that. The Minister is right to say that huge steps have been taken to ensure that there are proper accounting procedures in the Scottish Parliament, and I have no doubt that they will be proper. Unfortunately, he is too busy to read Hansard's report of minor debates between his colleagues and ourselves. However, the Under-Secretary will verify, if the Minister asks him, that we have already specifically made the point that the existence of good accounting procedures in the Scottish Parliament and the fact that, during the transition period, those procedures will be available through the CAG and other agencies here—as the order properly states—does not prevent the problem of there being English and Welsh taxpayers who are, in part, funding expenditure under the Scottish Parliament. They will find themselves without a means in this Parliament of exerting any scrutiny over the best value of that expenditure.
    The critical point is that although the Scottish Parliament will have accounting procedures, it may be believed, however erroneously, by taxpayers in the UK, not to have the incentive sufficiently to engage in that scrutiny because it is not raising the tax. I am asserting not that that will be the case, but that there is a danger of such a perception. It would be in the interests of the whole Union, Scotland included, if that were put to rest.
    Dr. Godman: I am grateful to the hon. Gentleman for his courtesy. Do he and his colleagues hold identical reservations in relation to the Northern Ireland Assembly and the departments that will be created there?
    Mr. Letwin: Yes.
    Mr. Alex Salmond: Has the hon. Gentleman read the "Declaration of Hamden" in which the Scottish Conservatives said recently that they were more autonomous than other political parties in Scotland, and accused the Labour party of being control freaks from London? Has the control freakery being displayed by the hon. Gentleman been cleared with Mr. David McLetchie, as it seems to ca' the feet from the "Declaration of Hamden"?
    Mr. Letwin: I am grateful to the hon. Gentleman, as always, for teaching me lessons about politics, particularly Conservative politics. This is not a point about control freakery or, in the end, a point about Scotland. This is a point about the possible reaction of English electors. It has been the constant pursuit of the hon. Member for Linlithgow (Mr. Dalyell), who used to be the hon. Member for West Lothian, to ensure that our arrangements do not unnecessarily precipitate tensions in the Union. I beg the Minister to attend to that matter.
    Mr. Malcolm Savidge rose—
    Mr. Michael Connarty Mr. Michael Connarty (Falkirk, East) rose—
    Mr. Letwin: No, I will not take further interventions, as I want to move on to my main point. Very well, I give way.
    Mr. Connarty: I do not understand how the hon. Gentleman can say that he does not want any measure to
    550
    be enacted by Parliament that would generate tensions, when he is clearly attempting from the Dispatch Box to drive wedges, not just between the people of England and of Scotland, but between the Conservative party in the House and the Conservative party in Scotland.
    Mr. Deputy Speaker: Order. Before the hon. Gentleman responds to that, may I remind him and the House that we are discussing the transitional arrangements. Remarks ought to be confined to that.
    Mr. Letwin: I am amazed at your patience, Mr. Deputy Speaker, and at the fact that you have not reminded us of that before. I was trying to move on to my main point, but I thought that I should give way to the hon. Gentleman—perhaps mistakenly.
    I am by no means trying to stoke up tensions. As a profound Unionist, I genuinely believe that there is much to be gained from trying to placate those feelings. I shall leave it at that.
    What is revealed in this set of orders—in particular in what the Minister calls the finance order, but perhaps more clearly in the appropriations order—is the extraordinary state of our constitution. That is no fault of the Minister or his Government. It has been the case for years.
    Betwixt the two extremes—tax, which we vet seriously, and efficiency and value for money, which we vet seriously through the CAG and PAC, notwithstanding my remarks about the Scottish Parliament—lie appropriations. In some Parliaments or the equivalent—for example, in the United States—appropriations are taken seriously. There are appropriations committees which look seriously into what is being appropriated and what the money is to be spent on. They debate the measures arduously, line by line, over many weeks. The equivalent of our Ministers pay great attention to that. The Government agencies spend an enormous amount of time trying to find out whether their proposed expenditure will be approved by Senate and House committees.
    If we inspect the appropriations order, which follows the traditional pattern, we find vast sums described in the most general terms, as is traditional in our practice. The sums are staggering. In total, we are dealing with some £14 billion worth, as I think the Minister will confirm.
    The description in article 2 on page 3 shows expenditure by the Secretary of State for Scotland and the Scottish Ministers on market support, agriculture in special areas including crofting, structural measures, compensation to sheep producers and animal health, agricultural education, advisory, research and development services, botanical and scientific services—I shall not bore the House by reading the whole list.
    It is an enormous, amorphous collection—all, undoubtedly, marvellous stuff—but no one in the House has the slightest idea what the money is going on. Nor is it intended that we should have such an idea, because this is a set of appropriations that follows the grand tradition of very broad, very general approvals.
    Mr. McLeish: There are always two arguments about any particular point. In a sense, that confirms the need, and the reason, for a devolved settlement for Scotland, for Wales and for Northern Ireland and for a voice

    551
    for London. The hon. Gentleman is absolutely right: appropriations are crucial, because it is someone else's money that we are spending.
    No one in the Chamber is responsible for the fact that we have little time for the debate, but that confirms that a Scottish Parliament with powerful appropriations and control procedures will be taken seriously on the question of budgeting and finance. There will be a powerful role for the Parliament vis-á-vis the new Executive. Does not the hon. Gentleman agree that that is a reason for devolution, not for holding it back?
    Mr. Deputy Speaker: Order. I do not want the debate to widen any further. That is what it is starting to do, so will the hon. Gentleman please confine his remarks to the matter before us?
    Mr. Letwin: Yes, Mr. Deputy Speaker, but I shall respond briefly to the Minister.
    This is not a question about devolution, either way. I welcome, of course, the Minister's remarks about the way that the Scottish Parliament, following the transitional orders, will go about the business of appropriation. If the Parliament establishes such procedures, that will be a constitutional advance. I am arguing that, as the order shows us clearly, we in this House also need to adopt such procedures.
    We do not currently have such procedures. The order is one of the most remarkable and unusual testimonies to that, because we do not frequently consider such orders. We do not have to consider them, because we do not normally have the need, which has been occasioned by the creation of the Scottish Parliament. The annual estimates that come before us fulfil exactly no purpose whatever, as everyone knows perfectly well what will be the outcome and no one does any serious investigation.
    Mr. John McAllion: Does the hon. Gentleman agree that it is marvellous how the Scottish Parliament, even before it has been established, is already teaching lessons to this place, about how it should go about conducting its business?
    Mr. Letwin: The hon. Gentleman deserves a lollipop for an ingenious point. I very much hope that he is right. We shall see, but if the Scottish Parliament is teaching us lessons, let us learn them.
    I want to make a particular point in respect of paragraph 2 of the finance order. Paragraph 2(2) on page 4 contains a remarkable constitutional point. I do not know whether I have correctly understood it. I have asked someone learned in the law about it, and I have received a not entirely clear answer. I hope that the Minister will be able to clear up this matter in his closing remarks. Paragraph 2(2) states:
    "If any question arises…as to whether or to what extent a function of the Secretary of State is a relevant function for the purposes of this Order that question shall"—
    this is the bit that I am concerned with—
    "be determined by the Secretary of State, and his determination shall be final and conclusive."
    In other words, the order tells us that the question "whether" something should be done by the Secretary of State will be determined by the Secretary of State, and he
    552
    will be the final arbiter. That strikes me as an odd provision, constitutionally speaking. I do not know whether the provision has good precedent; it probably has, or it would not appear in the order. If it has, perhaps we should be examining that precedent. It seems odd that such a judgment could be made and not be open to any kind of scrutiny or appeal.
    I refer to paragraph 3, Mr. Deputy Speaker. I hope that you will give me due credit for being precisely on the topic of the order. In sub-paragraphs (2) and (3) of paragraph 3 there is what appears to be an extraordinary outcome. In sub-paragraph (2) we are told:
    "A provision of any enactment which requires or authorises the payment of any sum into the Consolidated Fund shall have effect in relation to any relevant function as if it required or authorised that sum to be paid into the Fund instead."
    In sub-paragraph (3) we are told:
    "Paragraph (2) … is subject to any other provision made by or under this Order, or any other subordinate legislation"
    under a certain section.
    The combined effect of those two sub-paragraphs appears to be that the direction of moneys—which, before one looks at the order, seems to be determined by the order—will be subject to being redetermined by "any other subordinate legislation", under a certain section. That is extraordinary, is it not? It may be normal, but we do not know.
    The situation in Scotland has again occasioned a provision that is not normal. It is strange if it is a feature of our constitutional arrangements that it is perfectly proper and appropriate for the House to consider an order that directs matters in a certain way, and for that order to provide that in other orders those adjudications can automatically be reversed. I should be grateful if the Minister could illuminate that point.
    That is all the Opposition want to say about this subject. We accept that the order is needed, and that it does its job. We regret that it is in a constitutional context that gives rise to some real problems. The Minister may not be able to address all this today, but I hope that he will give us some earnest of the Government's intention to do so. I hope that he will clarify these detailed points.
    6.16 pm
    Dr. Norman A. Godman: I promise to be brief, Mr. Deputy Speaker.
    The criticisms offered by the hon. Member for West Dorset (Mr. Letwin) are shaped by his deep distaste for the process of political devolution. These measures are necessary and inevitable for the restructuring of the United Kingdom—or what my hon. Friend the Member for Linlithgow (Mr. Dalyell) would call the unravelling of the United Kingdom. Identical measures are being dealt with for the Northern Ireland Assembly.
    It is essential that the transitional period is as smooth as possible. Public authorities are involved in the transitional period, but various voluntary organisations are also, to some extent, financed by the Scottish Office. Concerns have been expressed about the Executive working alongside Ministers during the transitional period. Incidentally, I have never liked the title "First Minister": I think it should be "Premier of Scotland" and "Premier of Northern Ireland", but that is another story.

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    Voluntary organisations are concerned about their place in the scheme of things. I look to my hon. Friend the Minister for Home Affairs and Devolution, Scottish Office to offer them, on the record, a reassurance that they have not been overlooked. The documents refer to local authorities and other public bodies. Voluntary organisations receive a trifling sum from the Scottish Office. For example, the Scottish Refugee Council is assisted by the Scottish Office and local authorities. I am anxious that the Minister should deal with that point.
    Similarly, a number of public bodies are coming together to develop an integrated public transport system, and if negotiations are taking place in the transitional period, fears may be voiced and we may be told that it is necessary to hold off and delay things until the Ministers at Holyrood are able to make decisions.
    I do not want to sound parochial, but we hope that the waterfront development in Gourock will take place.[Interruption.] I shall not comment on the unavoidable absence of the hon. Member for West Dorset, because he was away for only 30 seconds. Developments are being discussed and decisions will have to be taken in the next 12 months, so it is important to have these assurances.
    I was about to give an example from my constituency—the Gourock waterfront development. The Minister was in my constituency recently, and he made an eloquent speech about the introduction of closed-circuit television. I hope that in the near future, he will make an equally crisp statement about the Gourock waterfront development, saying that it is going ahead.
    There is an important issue here. A number of authorities and other bodies are getting together to make life much less burdensome for those whom we represent in the House of Commons, and during the transitional period it is essential for there to be no hiccups. Another example is the development—I hope—of the ferry terminal at Port Glasgow. Again, a number of organisations are involved in discussions about the project.
    We hope to see, in Cardiff, Belfast and Edinburgh, a smooth handover to the Ministers who will take over.
    I promised to be brief. Let me end by saying that I, for one, have full confidence and trust in the candidates for the Holyrood Parliament. I know of one woman councillor who is currently the convener of a social work committee that has some £194 million to disburse. Elected representatives of that kind are as able and competent as any MP when it comes to ensuring that public funds are used in a truly honest, open and honourable way.
    6.22 pm
    Mr. Donald Gorrie: We support the orders, which, unlike the orders that we debated earlier, are very welcome.
    The hon. Member for Falkirk, West (Mr. Canavan) raised an important issue. I feel that both the Scottish Parliament and this Parliament should be able to do more probing into the finances of quangos, health boards and other bodies. That part of the state apparatus is not being properly scrutinised.
    The hon. Member for West Dorset (Mr. Letwin), as usual, raised the temperature of all devolutionary Scots—but, in accordance with your ruling, Mr. Deputy Speaker, I will not pursue that. For a minute or two, however,
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    intelligence broke through the fog, and the hon. Gentleman seemed to advocate an outbreak of democracy in the House. He seemed to suggest that we might start to scrutinise expenditure much more carefully. That is an admirable suggestion, and I hope that the hon. Gentleman will be able to persuade his party of his case.
    The Minister tried to describe the necessary balance between freedom for the Scottish Parliament and continuity. What he said was fair. We certainly support the idea of continuity, even if it slightly delays changes that the Scottish Parliament may wish to make. I say that as one who, if fortunate enough to be elected to the Scottish Parliament, is more likely to rock the boat than the Minister is. I think that a proper transition is desirable, and that continuity is important; and I think that is possible under the orders.
    As we usually do—and as other hon. Members doubtless do—we passed the orders to intelligent people in the hope that professional nitpickers might find mistakes, but they could not, so I have to assume that the orders are all right. But the suspicious tendency, to which I belong, is slightly worried whenever it sees the word "Treasury". Will the Minister assure me that there is nothing sinister in paragraph 8(4) of the finance order? It states:
    "In the period ending immediately before the principal appointed day, the Secretary of State shall make payments into the Consolidated Fund, at such times and by such methods as the Treasury may from time to time determine".
    Will the Minister assure me that there is nothing sinister in that, and that the Treasury will not do us down in some way?
    The Minister and his team are to be congratulated on what strikes me as an intelligent solution to the problems, and I am happy to support them.
    6.25 pm
    Mr. Michael Connarty rose—
    Mr. Deputy Speaker: I call Mr. Michael Clapham.[Interruption.] Mr. Michael Connarty.
    Mr. Connarty: We seem to have that confusion; I have commented on it before. As my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) is a very astute and thorough representative of the mining communities, I am happy to take his mantle on. I think that he was the person who was behind much of the campaign that won compensation for miners for vibration white finger injury. Therefore, I am happy to be associated with him, although he may not say the same about me.
    The reason why I want to speak on the order is that, sadly, it has been treated as a dry subject. The way the order is set out in its first page may seem dry, but, when I went with the British American Parliamentary Group to the induction week for the Congress in 1992, I was struck by the fact that practically the whole week was spent teaching Congress the importance of debating policy in the context of budgets—not as wild gestures and political emotions, but in terms of how we spent other people's money, as the Minister called it, on services. There is no doubt that that approach has led to the budget surpluses and to the turnaround in the United States economy under the Democrat Government.

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    I hope that the Scottish Parliament will take the debates on the budgets seriously and line by line, and will not send them off to a Committee, where a few Members will become very knowledgeable and most Members will know just about the wild gestures. The order is about a real fund—as was said, £14 billion; in fact, the figure is £14,038,349,000. That is to be allocated to Scotland in the transitional budget for the next year. That is a substantial sum. It is backed with real money.
    I had hoped—perhaps I can tempt the hon. Member for Banff and Buchan (Mr. Salmond) while I am speaking—to take issue with some of the Opposition figures for the budget, should they ever wrench Scotland away from the safety and security of the partnership with the rest of the United Kingdom. I was fascinated to read in press releases on Professor Kemp's analysis of how much money would come to Scotland from oil that the leader of the Scottish National party, the hon. Member for Banff and Buchan, had said that the average barrel price would be $18 up to 2003; it is $10 a barrel now. That would give Scotland £11 billion.
    The hon. Member for North Tayside (Mr. Swinney) said more realistically that he accepted that the barrel price is not likely to rise to $14 a barrel until about 2001. A total of £6 billion would then come from oil, so there is a £5 billion deficit there—under the figures put forward by two members of the SNP, £5 billion would be missing from any fund available to Scotland. They may have sorted the dispute out since then.
    Mr. Salmond: I am considerably tempted. It was actually Professor Kemp who said that he thought $18 a barrel was likely by 2003.
    Mr. Connarty rose—
    Mr. Deputy Speaker: Order. I am treating the hon. Gentleman's remarks as a brief preamble. I assume that he will come to the matter before the House directly.
    Mr. Connarty: I take that admonition, but I was attempting to talk about the order, which is real money. We have to get it over to the people of Scotland that, in the transitional arrangements, the Government have set aside real money for Scottish services and those services will benefit by us doing that. That is set out in an order that will go for approval by the House and then be handed, by the arrangements, to the Scottish Parliament to deal with in detail.
    When we put to the people the efforts of the Government, we must, with a little leeway from you, Mr. Deputy Speaker, compare them with those of others who have put forward other budgets, based on fantasy figures. We have the real figures. It is real money. It is real appropriations of real money for real services. That is what I want to talk about mainly—not the detail of the arrangements, which the Minister set out soundly, but the figures behind those arrangements: the £14 billion; the £2,478 million for education.
    I live partly in an educational world. I am a former teacher, I am constantly in touch with members of my former profession and I am married to someone in a senior position in education. A lot of my conversations, if they
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    are not about politics and Parliament, are about education. The money that we are talking about will fund many important schemes for the future of Scottish children.
    Last week, the Government announced £112 million of funding to give 60 per cent. of three-year-olds in Scotland the chance of a nursery place. Most four-year-olds whose parents want a nursery place for them have one. Early intervention is not just funded, but worked out properly. There will be 5,000 classroom assistants to enable the teachers to teach better and work better with children. That is what the £2.5 billion in the fund is for. It is about delivering real services for Scottish people—not political argument, but backing up our promises with schemes that are worked out well, usually in co-operation and harmony with the teaching profession and the educators, believe it or not. That is not how the issues are whipped up by the press, with stories about conflict, bullying and a big brother approach. We are developing education policies around the table and funding them. I have heard it said, even in the closed circles of the Educational Institute of Scotland, that Scottish education is awash with money. We must realise that that is what the fund means for Scottish education.
    The local government aspects of the fund for revenue support grants have been debated in detail, but there are some items worth commenting on. The £5.746 billion for general services includes funding for most of the rail services in Scotland. In the order of merit of delivery of service, Scotrail is at the top of the list for the United Kingdom. That is due not just to the efforts of Scotrail, but the co-operation with the Government and the funding from the Government that allows services to be maintained at a high level.
    Urban regeneration initiatives are also mentioned. The millennium canal link is a project close to my heart. The project to open the canal from the Forth to the Clyde is receiving £78 million of lottery funding, but it will also require substantial local authority and Government support to make it one of our prime millennium tasks. That could create thousands of jobs for people in the catering, hotel and hospitality industry. It will be a boon to towns such as Grangemouth and Falkirk, and other places all the way to the Glasgow constituency of my right hon. Friend the Secretary of State. Those projects are what the Consolidated Fund is about.
    The health service will also have a substantial input from the fund. There is more than £4 billion of new money to be spent in Scotland over three years. The Consolidated Fund will be the beginning of that.
    We should commend the fact that the issues have been set down and hope that others will take them up in the right spirit. They should not nitpick and play with niceties and constitutional issues. The Scottish people are not interested in that any more. They have had constitutional detail thrown at them until they are sick of it. They have voted for devolution. They know that there will be a transitional period. They know that the Government have to put transitional arrangements into operation. Anyone who tries to have a pop at little transitional constitutional matters will not get a hearing from the Scottish people, who want to know what will be delivered, not the mechanisms or the little details. Those are the responsibility of Ministers here and will be the responsibility of the Executive when the Scottish

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    Parliament is up and running. I hope that people will look at the figures and consider what the funds will mean for the national health service and the education service.
    It is right that we should put in place a mechanism to ensure that there are no hitches or glitches. The people should be confident that their representatives in the Scottish Parliament will spend the money, and that it will be there when they need to draw on it and will not fall foul of any technical mistakes.
    I commend my hon. Friend the Minister for bringing the motions to the Floor of the House. I hope that this is the beginning of many debates in the Scottish Parliament—which I think that the people will want to listen to—on how to spend the money allocated to it, rather than on nitpicking little constitutional issues.
    6.34 pm
    Mr. Alex Salmond: I sympathised with the Minister when the hon. Member for Edinburgh, West (Mr. Gorrie) asked him for an assurance that the Treasury would not try to do us down as, by definition that is what the Treasury is about.
    I am gratefulto the hon. Member for West Dorset (Mr. Letwin). I have waited 12 years to use the phrase "ca' the feet", and he finally gave me the opportunity by undermining the Hamden declaration of the Scottish Conservatives. Listening to his argument, I became increasingly concerned that, as a Scottish taxpayer, my taxes were not receiving proper scrutiny in the House as he blithely told us that billions of pounds of expenditure went unexamined. I wonder whether we should propose that a Committee of the Scottish Parliament should scrutinise the expenditure of this House. If the hon. Member for West Dorset made that proposal, perhaps he would bring himself back into line with Mr. David McLechie and the arguments that he is making north of the border.
    The orders are basically uncontroversial. The first deals with transitional arrangements that nobody would dispute seriously. The hon. Member for Falkirk, East (Mr. Connarty) said that we should look at the reality behind some of the spending figures in the year covered by the transitional arrangements. The order illustrates the extent of the Barnett squeeze on Scottish public spending.
    The hon. Member for Falkirk, East wanted to talk about health spending. The figures show that the increase in health spending in Scotland will be 3.4 per cent. compared with a real-terms increase of 5.2 per cent. in England. The following year, the increase will be 3.3 per cent. in Scotland and 4.5 per cent. in England. That illustrates the impact of the Barnett formula, which once was benign in respect of Scottish spending.
    The changes that were made first by Michael Portillo when he was Chief Secretary and later by the current Secretary of State for Social Security mean that the Barnett formula will squeeze spending in Scotland during the first Scottish Parliament. It is quite clear that the real-terms increase will be much less for all major Departments in Scotland than for the same Departments south of the border. Over the period of the comprehensive spending review the cumulative effect on the health service will be a loss of some £387 million. I hope that satisfies the wish of the hon. Member for Falkirk, East to
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    discuss real money affecting real services, as the new Scottish Parliament will face an immediate real-terms squeeze on spending.
    Mr. Connarty: Will the hon. Gentleman's proposals for the Scottish Parliament include using the 3p available in tartan tax? Will the SNP tax the Scottish people?
    Mr. Deputy Speaker: Order. Before the hon. Gentleman responds to that intervention, I remind him that we are debating the transitional arrangements. He should confine his remarks to that subject.
    Mr. Salmond: I can assure you, Mr. Deputy Speaker, that I shall not be tempted out of order by that intervention. Certainly any hon. Member who could not tell me the excise duty for this year cannot seriously expect me to answer a question relating to the year after next.
    I have a question about the second order that I hope the Minister will answer in some detail. The order transfers the receipts of the Scottish Secretary to either the Scottish Consolidated Fund or the UK Consolidated Fund. Articles 3 and 5 set out the basic principles for that.
    Moneys being transferred to the Scottish Consolidated Fund include prescription and dental charges amounting to £76 million, tolls and transport receipts worth £24 million and administration receipts worth £8.7 million. However, courts, fines, penalties and forfeitures, which are worth some £23 million, are receipts to the Scottish Ministers which the order states they must transfer to the Scottish Secretary, who then passes them on to the UK Consolidated Fund. Why should those funds be treated differently?
    I was struck by a comment by the Prime Minister in the Sunday Herald last Sunday about civil action that can be taken against drug dealers in Scotland. He said that any such money would not be stolen from the Scottish Exchequer.
    The Secretary of State may shake his head, but that is what the Prime Minister said in an interview published last Sunday. If it is the case for civil fines, why should not fines imposed in the Scottish criminal courts come straight to the Scottish Consolidated Fund instead of being routed via the Secretary of State and the UK Consolidated Fund? That is an entirely reasonable question.
    Suppose the Scottish Parliament wanted to increase fines for certain criminal offences—perhaps even for certain categories of drug dealers—why should not that decision have an impact on the Scottish Consolidated Fund? I understand that the Minister said that the £23 million involved was a drop in the bucket—according to the press, he suggested that it was a small sum in relation to the overall expenditure—but that amount could reduce primary school class sizes to under 30, abolish tuition fees for each year of the first term of the Parliament, put more policemen on the beat or reduce the backlogs in the courts and procurator fiscal offices.
    The Scottish Parliament could take a decision on court penalties that would add to its receipts.
    Mr. McLeish: A new tax.
    Mr. Salmond: Is it a new tax to take a policy decision to increase the penalties imposed in Scottish courts? Why should such payments be routed through—
    Mr. McLeish: Because that is what happens now.
    Mr. Salmond: But we are entering a new phase in politics with the brave new Parliament. We must be prepared to look at things anew and try—[Interruption.]
    Mr. Deputy Speaker: Order. We cannot have a debate conducted by hon. Members calling out from a sedentary position.
    Mr. Salmond: I know that I should not be tempted by the Minister's sedentary interventions, but if we are moving into a new relationship, he should tell the House why such payments cannot go directly to the Scottish Consolidated Fund, as prescription and dental charges do.
    The Secretary of State for Scotland (Mr. Donald Dewar): What happens to criminal fines imposed in courts in other parts of the United Kingdom?
    Mr. Salmond: I have no idea. We are discussing orders that say that such fines should be paid into the Consolidated Fund of the UK Parliament and routed through the Secretary of State, instead of going directly to the Scottish Consolidated Fund. It is for Ministers to say why that is a reasonable position.
    Mr. Dewar: I will.
    Mr. Salmond: We shall see.
    The Parliament will have control of a maximum of about 12 to 13 per cent. of its revenue sources, and the rest will come via the Consolidated Fund in the form of a block grant. That gives small room for fiscal manoeuvre—only slightly more than Scottish local government has now—so it is entirely reasonable to ask why we should not increase that room for manoeuvre if the orders give us the opportunity to do so.
    In an answer to my hon. Friend the Member for Perth (Ms Cunningham) late last year, the Home Secretary said that work was in train to identify areas where it might be appropriate to effect a transfer of funds from UK Departments into the programmes of the Scottish Executive. He said that he would make a statement in the Official Report when the work was completed. When will that promised statement be made; and what work is being done to consider how funding could be transferred directly into the Scottish Consolidated Fund for matters that will be the responsibility of the Scottish Parliament but are currently dealt with by UK Departments?
    Dr. Godman: Does the hon. Gentleman agree that the period of transition will enable members of voluntary organisations and community groups to familiarise themselves with the lobbying of a Scottish Parliament and to become adept at dealing with its Members? That is one fine consequence of the transitional system.
    Mr. Salmond: A transitional period is necessary to give certainty and assurance to the funding in the first year of the Parliament, and voluntary organisations in
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    Scotland are certainly among those who will be looking closely at the transitional period. Voluntary organisations—and the lobbying network for the Scottish Parliament that is proceeding apace across the voluntary sector—will be an important part of the democratic process—almost as important as the new scrutiny of the funding provisions for the Scottish Parliament itself.
    The measures are necessary, but it is fair, reasonable and perfectly within my entitlement to ask what I see as a legitimate question. Why are some fines, penalties and fund-raising going through the UK Consolidated Fund, and not through the Scottish Consolidated Fund?
    6.46 pm
    Mr. Letwin: With leave of the House, Mr. Deputy Speaker: I had anticipated that Labour Members would want to contribute in great numbers to the completion of the debate, but it does not seem to be so.
    The debate has been constructive in two respects. First, there was agreement from the Liberal Democrats that there is a deficiency in the way in which this Parliament goes about its inspection of appropriations, and it is altogether admirable that there should be that degree of consensus. I hope that the Minister will tell us that the Government share that view, and that the orders bring to light—through no fault of the Government—a serious problem with our arrangements. I hope that the Minister will be able to tell us that the Scottish Parliament will put in hand arrangements so that its organs can enable it to inspect in minute detail appropriations, rather than merely looking vaguely at estimates.
    If that is the case, the Scottish Parliament will be able to teach us a lesson—as has been mentioned by Labour Members—and we will welcome that. The hon. Member for Banff and Buchan (Mr. Salmond) and others have been determined to portray these remarks about the character of our constitution as if they were, in some bizarre way, an attack on the Scottish Parliament. They are nothing of the kind—they are not intended to be, and they are not in practice. If the Scottish Parliament develops more elaborate and better designed mechanisms than our own, we will welcome it, and we will be happy to learn from it. However, the fact of the Scottish Parliament doing that does not remove the need for us to do so. I hope that the Minister will tell us that he is in favour of that.
    Secondly, there has been an interesting exchange between Labour Members and the hon. Member for Banff and Buchan. We were told—much as in the previous debate on local government finance—that this was a magnificent array of expenditure that would solve every problem, and should be welcomed on that basis. Immediately, the lie was given to that, with the hon. Member for Banff and Buchan telling us that the amounts are far too small.
    The order should not be taken as a pretext for claiming that things are either better or worse than previously. It has no effect on the amounts of money involved—it merely transfers them from one pocket to another. It would be sensible if the House considered seriously the constitutional points, and did not argue, in the banter of party politics, about whether the amount of money—the

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    very same amount that would have been involved anyway—was a good or bad amount. That is not the substance of the orders.
    Mr. Connarty: I hope that the hon. Gentleman is not trying to dismiss the change that has come about in the financing of Scottish services since the comprehensive spending review allocated the money that is now contained in this transitional order. I hope that he is not going to try to portray anything that I said as meaning that the order is wonderful and will solve all problems. I hope that he accepts that, for the Scottish people, the damage done by the previous Conservative Government will not be undone except by a decade of such expenditure and effort. That is why there are no hon. Members representing Scottish constituencies on the Conservative Benches.
    Mr. Letwin: I rather regret having given way to the hon. Gentleman, because he continued the party political dialogue that I was trying to avoid. The previous discussion of the local government finance settlement made it clear that the Government's current plans—their present intentions as well the previous ones—are no more generous to Scottish local government. Neither does this transitional order resolve matters. I agree that the order will not create great riches. It is not a spending measure but a transferring measure.
    Finally, I hope that the Minister will be able to give us an answer this evening to the question that I posed earlier. The question is not intended to be an accusation, nor is it an attack on devolution, but will the Government take account of the genuine problems that will arise in England as a result of this House's failure to make arrangements to scrutinise expenditure?
    Mr. Savidge: As my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) noted earlier, such a supervision arrangement was not made for Northern Ireland. Moreover, it was never introduced for local government anywhere in the British isles, for which between 80 and 85 per cent. of funding comes from central Government, as was made clear in the previous debate. Does the hon. Gentleman accept that what he is saying conveys an impression of patronising distrust of the Scots?
    Mr. Deputy Speaker: Order. We are now getting very wide of the matter before the House. I should be grateful if the hon. Gentleman did not respond.
    Mr. Letwin: As I am prevented from responding, I shall not do so. I regret having given such an impression: it was not my intention.
    I hope that the Minister will answer my earlier question, and also clarify the detailed points that have been raised about the order, including the rather interesting point made by Liberal Democrat Members.
    6.52 pm
    Mr. McLeish: With the leave of the House, I should like to respond to the debate.
    We have made it clear that the Government take very seriously the proper scrutiny, accounting and auditing of money. Our aspiration is that the Scottish Parliament will
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    build on the excellent work of the Public Accounts Committee at Westminster, and of the Comptroller and Auditor General. However, we can do better: that is what politics is all about, and that is my response to Opposition questions on that point.
    The hon. Member for West Dorset (Mr. Letwin) said that the appropriation order dealt only in vast sums. I think that he was making a wider political point, but I can tell him that the Estimates booklet that accompanies the great headline information contains more detailed votes, sections and subheads.
    The hon. Member for West Dorset also asked about appropriation procedures; the phrase that he used was that Parliaments "don't get a look in". However, it is up to the Parliament to decide how such procedures operate. We want the Scottish Parliament to be given significant powers and resources by the Executive to carry out the scrutiny procedure. There is a built-in assurance, therefore, that the Scottish Parliament will be able to monitor very effectively the sums of money at its disposal.
    The big incentive that the Scottish Parliament will have to monitor finance properly is that we will be working on a fixed budget. Every pound spent must matter in every community in Scotland. If there are different priorities for which we want to raise cash, we will have to shift resources within a budget of priorities. Pursuing a public policy of that sort would be an enormous incentive to any serious Parliament.
    The hon. Member for West Dorset also asked about the provision, in paragraph 2(2), for determination by the Secretary of State. I can tell him that the provision has force only in the period from 1 April to 30 June, when the Secretary of State is spending money out of the Scottish Consolidated Fund. It does not allow the Secretary of State to spend money that has not been properly appropriated, or for a purpose for which the money has not been appropriated. The Secretary of State will have to account for expenditure, and the accounts will be audited by the Comptroller and Auditor General. The Secretary of State will, of course, be accountable to the House.
    Similarly, in paragraph 3(2), the other subordinate legislation under section 129(1) is indeed the appropriation order. The procedure is similar to that in section 64(4) of the Scotland Act 1998, which will replace paragraph 3(2) after 1 July. It also follows the procedures of the House: money payable into the Consolidated Fund is appropriated in aid of votes under the Public Accounts and Charges Act 1891. I hope that that technical response allays the hon. Gentleman's concerns.
    The hon. Member for Edinburgh, West (Mr. Gorrie) referred to the Treasury, and to paragraph 8. Its words are the same as those in section 64(6) of the 1998 Act. The provision applies to money that will be surrendered to the United Kingdom Consolidated Fund, and it is right that that should remain in the control of the Treasury. It applies only to the timing and the handing over of receipts that firmly belong in the cash flow through the Scottish Consolidated Fund.
    My hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) wanted reassurance about continuity. I can give him that reassurance. It is vital that voluntary organisations, local authorities, trusts and other bodies in Scotland should not be disrupted because of the historic events in Scotland.

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    The hon. Member for Banff and Buchan (Mr. Salmond) raised points about the Labour Government's injection of help for health and welfare in Scotland. There will be £1.8 billion over the next three years. Even if the hon. Gentleman wants to nitpick, he cannot get away from the fact that that is substantial investment in health care in Scotland. It ill behoves the Scottish Nationalist party to compare matters with those in England, suggesting that the English are always trying to undermine what we do in Scotland. We need mature politics in Scotland, and the SNP has to grow up and to acknowledge the real progress being made.
    The hon. Gentleman also raised the whereabouts of fine revenues. At present, fines from England and Scotland go through the UK Consolidated Fund. Why change that? The SNP obviously has not thought the question through. The funds are regarded at present as being similar to tax revenues and television licence revenues. They are pooled centrally, then distributed throughout the UK on the basis of need. Scotland is achieving devolution, not divorce. The settlement must work within the United Kingdom, and the hon. Gentleman would do better to acknowledge that fact.
    The real question is whether we want to turn fines levied through the criminal justice system into another tax. It is ludicrous of the SNP to raise that issue when we all want fines to be about punishment within the criminal justice system. In addition to the possibility of a local income tax, changes to the uniform business rate and changes to the use of the Scottish variable tax, another new tax is being put before us tonight, invented by the SNP. It would be a tax on people going through the criminal justice system.
    Mr. Salmond: Will the Minister give way?
    Mr. McLeish: I will not. The hon. Gentleman has already made his points, and they deserve a full response.
    The hon. Gentleman referred also to remarks made in Scotland by my right hon. Friend the Prime Minister about the seizure and confiscation of drugs. Yet the hon. Gentleman's party has not a single policy on law and
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    order, or drugs or any part of the criminal justice system. My right hon. Friend was quite right to say that the Scottish Parliament and United Kingdom Parliament will want to see drug dealers attacked, and their assets confiscated.
    The Prime Minister referred also to recycling. If we are given the opportunity to do that in Scotland or at Westminster, we shall take it. Tonight, we heard not an address on that issue from the hon. Member for Banff and Buchan, but an attempt to make a political mountain of a technical molehill. It is disgraceful of him to seek to hijack an important issue for cheap party political points.
    The orders are urgently needed. They will ensure that Scotland will consider finance carefully. I commend them to the House.
    Question put and agreed to.
    Resolved,
    That the draft Scotland Act 1998 (Transitory and Transitional Provisions) (Finance) Order 1999, which was laid before this House on 4th February, be approved.

    Constitutional Law
      SCOTLAND ACT 1998 (TRANSITORY AND TRANSITIONAL PROVISIONS) (FINANCE) ORDER 1999
      That the draft Scotland Act 1998 (Transitory and Transitional Provisions) (Appropriations) Order 1999, which was laid before this House on 4th February, be approved.—[Mr. McLeish.]

      SOCIAL SECURITY CONTRIBUTIONS (TRANSFER OF FUNCTIONS, ETC.) BILL [LORDS]
      Ordered,
      That, during the proceedings on the Social Security Contributions (Transfer of Functions, etc.) Bill [Lords], the Standing Committee on the Bill shall have leave to sit twice on the first day on which it shall meet.—[Mr. Hill.]

      FOOD STANDARDS
      Ordered,
      That the quorum of the Committee appointed by Order [8th February] to report on the draft bill on the Food Standards Agency (Cm. 4249) shall be five.—[Mr. Hill.]

    Kosovo
    7 pm
    The Secretary of State for Defence (Mr. George Robertson): With permission, Mr. Deputy Speaker, I should like to make a statement on decisions that have been taken today to ensure that British forces are immediately available in case a NATO force is required to deploy to Kosovo.
    As the House will be aware, my right hon. Friend the Foreign Secretary is currently at the Kosovo proximity talks at Rambouillet in France, which he is jointly chairing with the French Foreign Minister, Hubert Vedrine. A news blockade has been imposed on the talks to encourage the parties to focus on the discussions rather than on telling the world how they are going. However, it is clear that progress is being made. Contact Group Foreign Ministers will take stock of what remains to be achieved in the negotiations when they meet in Paris on Sunday.
    It is unclear at this stage whether a NATO force will be required to support any peace agreement. Any decision to proceed with such a force will have to be taken by Britain and its allies in NATO following a satisfactory conclusion to the talks at Rambouillet. No such decision has yet been taken. However, it is clear that, should such a force be required, it will have to be ready to go into Kosovo as quickly as possible after a peace agreement is reached. A military force that is to be effective must be assembled well in advance. That means that we and our allies must have our forces in the region ready to go into action at short notice.
    For this reason, the Government have decided today to send to the region at the beginning of next week the vehicles and other heavy equipment of the units that would form the leading elements of any deployment. They will include Challenger tanks and Warrior armoured vehicles and artillery. The units principally involved are the King's Royal Hussars, the Irish Guards and 4 Regiment Royal Artillery, with a tactical headquarters drawn from 4 Armoured Brigade. Other units will also be providing equipment. Loading of the Royal Fleet Auxiliary ships Sea Centurion and Sea Crusader will begin on Monday.
    Although those vehicles and heavy equipment will be accompanied by a small number of personnel, the majority of the personnel from the units involved will remain at their bases at short notice to move and join their vehicles. The decision whether to deploy them will depend on how the situation develops. To prepare for the arrival of the equipment in the region, about 200 key logistics personnel will deploy next week to Greece and Macedonia, where we already have an armoured infantry company deployed as part of the NATO extraction force.
    The House will draw from those decisions the clear message that the United Kingdom is determined to play its part in supporting a negotiated settlement in Kosovo. However, we will deploy our forces only in support of an operation with a clear mission and clear objectives, and alongside our allies. Contingency planning is continuing at NATO, with Britain playing a full part. Other allies are making preparations similar to ourselves. From my contacts with my fellow NATO Defence Ministers, I know that others will be on the ground alongside us should a decision be made to go ahead with the operation.
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    The decision that I am announcing this evening represents prudent military contingency planning. In no way does it prejudge any decision to proceed with an operation. Whether a force is to be deployed into Kosovo will depend in large measure on the parties: neither side can take it for granted that NATO will deploy a ground force. Both sides must make the hard choices necessary to reach an agreement.
    Mr. Robert Key: As the Secretary of State knows, my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) is in Scotland tonight.
    I thank the Secretary of State for his statement and for extending to us the courtesy of an advance copy. I also thank the Leader of the House for responding quickly to this afternoon's request for a debate by the shadow Leader of the House, my right hon. Friend the Member for North-West Hampshire (Sir G. Young).
    This is a grave statement, and the House should not underestimate its significance. The Opposition support the Government in their attempts to find a peaceful solution to this protracted problem. We know that what the Secretary of State announced makes good military sense. It leaves many difficult questions for him and for us. The political and diplomatic issues will have to wait for another day, but the deployment of ground troops abroad is a serious commitment.
    Can the Secretary of State tell us the extent of United States participation in the operation? For example, what air support will be provided by the United States or other states? What other European countries will deploy to the Balkans in addition to France? What will be the status of the Organisation for Security and Co-operation in Europe observers in the Kosovo monitoring force as a result of this significant move? What will happen to the extraction force? If he can, I should be grateful if he would tell us about the British contingent. We can think of no better commander for this operation than General Sir Mike Jackson. He is an outstanding leader who enjoys the confidence of the House and that not only of British troops but of others who are likely to participate.
    Can the Secretary of State say anything about the rules of engagement? I do not expect him to break confidences, but will they be similar to those in Bosnia? What will be the impact on overstretch in the British Army following the strategic defence review and the commitments clearly laid out in that? For example, what will be the impact of taking the ARRC—the Allied Command Europe Rapid Reaction Corps—from Germany for a long period? How long does the Secretary of State anticipate that the deployment will last? This is a sample deployment, but a serious commitment could follow from it. Would it be a three-year term—I believe that that is what is being discussed at Rambouillet—or will it be longer? What will be our exit strategy? Who will pay? Will the cost fall on the defence budget or will the Treasury find money from the contingency fund?
    All hon. Members must extend their good wishes to all our troops who participate, particularly to the advanced forces that will be sent next week. I also mention the non-uniformed staff of the Ministry of Defence who are looking after the strategic tail, right down to the people helping with the aircraft, ships and so on without which the front-line forces could not meet their commitments. Of course, we all think of the families of the forces and of all those who are involved in this operation in a supportive role.

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    As the House goes into a short recess next week, will the Secretary of State be sure to keep us all informed? I understand that the other place will not be in recess next week, but we must be kept informed of any moves on this important development.
    Mr. Robertson: I thank the hon. Gentleman for his courtesy and his recognition that we have responded to the wish of the House for information on what is, I stress, a purely precautionary contingency operation. I believe strongly that it would be irresponsible for us not to take these precautionary moves and put in place contingencies. Although many of his questions cannot be answered at this stage, they will form part of the background to any decision eventually taken by the Government. We will, of course, inform the House of any such decision.
    The hon. Gentleman asked about the role that the United States might play in any such force and about other European allies beyond France. I expect that our NATO allies would be involved in any force that might be put in place, should there be an agreement at appropriate levels, but no decisions have been taken on whether there should be a force or on its ultimate size. I expect and hope that the United States and the other major allies would be involved in it. Having discussed that matter in person with other NATO Defence Ministers last weekend, I believe that that is more than an ordinary hope.
    The hon. Gentleman asked about the status of the monitors already in Kosovo, who are doing an outstanding job in extremely difficult circumstances. Clearly, he knows that I cannot and should not embark on speculation about their future. He mentions the British commander of the Allied Command Europe Rapid Reaction Corps—otherwise known as the ARRC—General Sir Mike Jackson, who is outstanding and who, in the circumstances of a deployment, will be in command of the ARRC headquarters and whatever troops we put in place, should that prove the right thing to do.
    I cannot answer questions on rules of engagement, for reasons that the hon. Gentleman knows perfectly well. However, on the subject of existing commitments, I can say that, if we were to go ahead with such a deployment, it would clearly have an impact on our forces. Some 27 per cent. of the British Army is currently on operations—an historically high figure. That is extremely demanding of the individuals affected by it, and that applies to the Royal Navy and the Royal Air Force as well. However, we must do what we have to do if we are to ensure that our continent is safe and that there are no further atrocities of the sort that we witnessed a few weeks ago. That is why we are putting these precautions in place.
    For obvious reasons, I cannot tell the House how long any commitment would last—the talks are going on and a minute-by-minute discussion of them would hardly be helpful in terms of pressure on the parties—nor can we talk at this stage about an exit strategy. However, in my statement, I made it absolutely clear that we are interested in getting involved only if there is a clear mission with clear objectives. I hope that that reassures the House. Payment will be dealt with in the normal way: the defence budget will cope with what the defence budget can cope with; beyond that, I shall make a claim on the contingency reserve. That is the standard formula, applied from Government to Government.
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    The hon. Gentleman's good wishes to those who might be deployed, those who are now being put on short notice and those who will be engaged in putting equipment on ships and getting it under way, are appreciated, as are his remarks about those working on the logistics side, those involved in a civilian capacity and all the families concerned. His good wishes will be welcomed and they are well deserved.
    Mr. Tony Benn: Will the Secretary of State cite to the House the specific legal authority under the charter of the United Nations or the constitution of NATO that would allow armed forces to enter a sovereign state—Yugoslavia—if that state were to object? If that were to take place, would the Government believe that Yugoslavia had, under article 51 of the UN charter, the right of self defence? If British troops are injured or captured in those circumstances—without a state of war—would they be protected by the Geneva convention? Finally, will he tell the House whether Parliament will be given an opportunity to give its judgment before British forces are committed?
    Mr. Robertson: My right hon. Friend misunderstands what I have announced. When he reads my statement later on, he will see that I have announced the sensible precaution, a contingency measure, of putting in place some of the equipment that might be used were a decision to be taken to go ahead with a deployment. The discussions currently taking place with the representatives of the Government of the Federal Republic of Yugoslavia and the representatives of the Kosovo Albanians will determine whether there will be any agreement. I have already made it clear that I will expect to keep Parliament informed of any decision that is taken about using the troops who are to have their equipment sent en route, as I have announced.
    Mr. Menzies Campbell: Those are entirely sensible precautions if we are to put ourselves in the position of being able to make a contribution to a negotiated settlement. If anyone doubts the need for a negotiated settlement, perhaps the scenes of today's mass burial in Kosovo will remove those doubts.
    The Secretary of State tells us that the decision to deploy will depend on a satisfactory conclusion to the talks in Rambouillet. May I press him a little further? Must not it also depend on sufficient pledges from other NATO nations to provide a credible total force, and a pledge from the United States of America to provide a substantial contingent of ground forces? Are the units to which he has referred fully manned? If not, how is the shortfall to be made up?
    Mr. Robertson: Let me underline yet again that I am talking about sensible precautions, contingencies—no more, no less. The right hon. and learned Gentleman is right to say that we should be aware of what we are doing, and that that can, in many ways, assist the seriousness of negotiations. We shall of course be going to the area with forces of other NATO nations. I have discussed that matter with Defence Ministers, and I know that my right hon. Friend the Foreign Secretary will have discussed it with his colleagues. The matter has been dealt with at Heads of Government level, too. We want the maximum number to commit forces in advance, should there be a settlement, as we all hope.

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    The right hon. and learned Gentleman is absolutely right to pinpoint why we are even talking about this tonight. The scenes on television today, and the atrocities that have occurred before and during the past few weeks, have moved people across the world. That is why the talks are going on, and why, in many ways, it is remarkable that both parties are sitting down together in that chateau near Paris. It is why we must all hope that the talks are successful.
    Mr. Nicholas Soames: Does the right hon. Gentleman agree that, although this deployment may be only precautionary, it obviously sends a formidable and powerful message, which will not escape those negotiating in Paris? Will he quantify what he already knows that our allies are moving? Does he intend to beef up air assets available to the deployment, should it go ahead? Will he confirm that, in the weeks to come, he and his colleagues will be doing a good deal of work to secure a complete legal basis and rules of engagement for such a deployment, were it to take place?
    Mr. Robertson: The hon. Gentleman speaks with some authority. He will know that none of this announcement has been made without deep thought and genuine concern for the individuals who might be involved. At the moment, we are only moving heavy equipment, which must get on the high seas if it has even the slightest chance of reaching the theatre in order for a decision then to be taken one way or another.
    I am not in a position to quantify what our allies will be doing. NATO's force generation conference has not yet taken place, but I know from discussions last weekend with fellow Defence Ministers that they, too, see the merit of this contingency deployment, and are already putting in place their own contingency plans in order to be able to ensure that when—or if—an agreement is reached, we have a sensible basis on which to move forward.
    Perhaps the House does not need to be reminded, but there are already RAF personnel and air and ground crews at Gioia del Colle air base in Italy as part of the actord—activation order—which hangs over the scene as yet another sensible precaution. A large force of American aeroplanes is involved in that force, with RAF and other allies, and is a vital part of the threat of force that backs up the diplomacy which has got the parties together.
    Mr. Bruce George: I hope that the Secretary of State has been persuading his fellow NATO parliamentarians and members of Governments to replicate what he is doing by making statements to their legislatures. His decision is not only prudent, but commands the support of the overwhelming majority of Members of Parliament. It is critically important to the future of NATO and of any European dimension to security that there is not just a presence, but a formidable one, alongside British troops. Both organisations would be fatally weakened if some countries chose to send only token forces. That is an important point.
    Secondly, has the Secretary of State looked at his diary for next week? I hope that he has and that he realises that he will appear before the Select Committee on Defence. While our colleagues are enjoying their well-earned break, he will be explaining these events in rather more detail than he has been able to do this evening. On behalf of the other 10 members of the Committee, I can tell him
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    that we are looking forward immensely to abandoning our visits to the Caribbean and the south of France so that we can listen to him explain in great detail what he has in mind for British forces.
    Mr. Robertson: I remind my hon. Friend that there may be recesses for Members, but there are no recesses for Ministers. I look forward to meeting all the members of the Defence Committee next Wednesday when I shall give evidence before them, and to having the opportunity to deal with matters in detail.
    The procedures of other nations are a matter for them. Some have elaborate procedures in their Parliament and that is their tradition. This is our tradition, and I am responsible for generating forces from this country. Of course, we are on test. This is a European crisis and we look to Europeans to live up to the challenge put before us. Therefore, I hope that all our NATO allies in Europe will contribute if it is necessary to send in a force to supervise an agreement.
    Mr. John Wilkinson: Does not the crisis demonstrate the paramount need for the Royal Air Force to have at its disposition heavy lift cargo aircraft that can take the heaviest equipment such as the Challenger tank, a number of Warriors or several helicopters straight into theatre within three hours of take-off in the United Kingdom? That deficiency was highlighted in the strategic defence review and has not yet been rectified. Is it not about time that the RAF bought some C17s?
    Mr. Robertson: I would hate this statement to become an auction on which aeroplanes we might eventually buy. The SDR identified the need for strategic heavy lift. That was one of the review's central features and one of the major deficiencies that we inherited from the previous Government. It is only eight months since the SDR was endorsed by Parliament and we are still involved in the process. I assure the hon. Gentleman that the sensible precautions that we are taking mean that we shall have the right forces with the right training and the right equipment in the right place so that we can make a decision, if one is required.
    Mr. Donald Anderson: Will my right hon. Friend remind the Foreign Secretary that he will meet the Select Committee on Foreign Affairs next Wednesday, when most colleagues will be working hard in their constituencies, and that he can, if necessary, make a statement? Will he acknowledge the enormous importance, practically and symbolically, of the fact that NATO and Russia are working together, and does he agree that they should stick together throughout the process and translate the political unity of the Contact Group into a military unity? Will he make it absolutely clear that no British troops will be deployed in Kosovo until there is a political deal, and then only to reinforce that deal?
    Mr. Robertson: My right hon. Friend the Foreign Secretary is currently engaged in the detailed and momentous discussions at Rambouillet and will be concentrating on those at the moment, but I know that, when he meets the Foreign Affairs Committee, he will give its members the proper attention.

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    My hon. Friend is right to point out that relations between NATO and Russia on this issue are cordial. Indeed, that is one of the major strengths of the negotiations and, perhaps, one of the factors in the decision by the parties to come to the proximity talks. Clearly we want those good relations to continue.
    I made absolutely clear in my statement the circumstances in which British troops would go into Kosovo. I repeat: we shall deploy our forces only in support of an operation with a clear mission and clear objectives and alongside our allies.
    Mr. Martin Bell: Will the Secretary of State clarify his thinking in the event that the talks in Rambouillet fail? Presumably, the tanks, the guns and the advance parties come home. How do we stay engaged? How do we deal with the threat to peace in the Balkans?
    Mr. Robertson: That is a hypothetical situation—a serious one, but a hypothetical one, when the parties are at present sitting round the same tables in Rambouillet. I do not think that, for the moment, we should countenance the idea of failure, or allow them to think that they can leave the talks in the midst of failure. I told the House that the equipment and the limited numbers that we are sending can at any point be taken back. What we cannot do is put them into place if we have not made the contingency arrangements.
    Mr. John Austin: I welcome the prudent and sensible precautionary measures that the Secretary of State has taken. Can he confirm—and if not, will he investigate—reports that, even this week, villages around Podujeva and Llapashtica have come under heavy shelling from the Serbian forces, and that villages around Malisheva have been heavily machine gunned? What action will the Contact Group take if there are blatant breaches of the ceasefire while the Rambouillet talks are still in progress?
    Mr. Robertson: The issues that my hon. Friend raises underline the gravity of the situation and the urgency of a successful outcome to the talks. They place a heavy responsibility on both sides in the talks to come to an agreement soon, to allow the political process to develop and new institutions to grow up that will stop the violence. Both sides, as it happened, condemned the grenade attacks that took place last week. The message that we have given to both sides is that the violence must stop. The talking at Rambouillet is where the future of Kosovo should be determined, not in exchanges of machine gun fire.
    Mr. Crispin Blunt: The Government have a division-minus deployed indefinitely in Bosnia. They are about to prepare to deploy indefinitely a corps headquarters and a brigade to Kosovo. The right hon. Gentleman told me in a written answer last week that the central assumptions in the strategic defence review of one formation indefinitely deployed and one formation on only a six-months deployment was what drove the force structure that abhz out of the strategic defence review. When will he review the force structure arising out of the strategic defence review?
    Mr. Robertson: I am confident that the overall force structure that was determined by the strategic defence review allows us to make those deployments, if the decision is ultimately taken to make them.
    Mrs. Alice Mahon: My right hon. Friend stated that the Russians are on board for the negotiations. Can he spell out in detail the level of co-operation of the Russians? Would they be involved in deploying troops or other personnel if we went into Kosovo?
    Mr. Robertson: My hon. Friend is taking me into territory that is not mine and on which it is not wise to speculate in any event. The Russians are fully engaged in the talks, are full members of the contact group and are fully part and parcel of the efforts that are being made through the talks, which are chaired by my right hon. Friend and the French Foreign Minister. I sincerely hope that the Russians will continue to be engaged because further outbreaks of violence or the further disintegration of Kosovo would not be in their interest or anyone else's.
    Mr. William Cash: Will the Secretary of State comment on the fact that, in what happened in Iraq, we had no support, effectively, from our so-called partners in the European Union in matters of defence? Will he also comment on the basis on which he said that he expects—in other words, hopes—that there will be allied support, other than from the United States? Can he tell us what discussions have taken place with our European partners under the Western European Union, having regard to the Maastricht and Amsterdam treaties? Is there any prospect of a full and united response by the EU, or is all the paperwork no more than rhetoric about the operations, with no practical action?
    Mr. Robertson: I get a sense of deja vu every time the hon. Gentleman stands up to speak. I hear the obsession with Europe, which is seen always through the light of dismal failure. On the subject of being alone in Iraq, I draw his attention to the fact that the German Government—and the German Defence Minister, here in London—endorsed absolutely everything that we did in Iraq, saying that it was right and perfectly justified.
    I also point out to the hon. Gentleman—in the hope that I might puncture this conspiracy theory, by which he seems always to be captivated—that the talks are chaired by the British Foreign Secretary and the French Foreign Minister. They are British-French talks that are designed to try to ensure that, in one part of our own continent, we concentrate our minds on how the fighting can stop and how we can build a sustainable peace.
    Mr. Harry Barnes: Although these measures are clearly precautionary, should not an answer be given to my right hon. Friend the Member for Chesterfield (Mr. Benn) in respect of the legality of proposed actions? These are matters of considerable importance. It cannot be the case that, if the circumstances arise in which there is a call for action, we will not act because of the problems that have been raised by my right hon. Friend. Is not my right hon. Friend the Secretary of State in an odd logical position in respect of that issue?
    Mr. Robertson: I make it clear to my hon. Friend that British troops will never be deployed other than in accordance with international law.
    Dr. Julian Lewis: Will the Secretary of State accept my warmest congratulations on his statement? I endorse every word he said. He referred to the pictures in today's papers showing the funerals of the victims of the massacre. Does he agree that it is ironic that accounts of the massacres 57 years ago in western Russia and eastern Poland—of hundreds of thousands of innocent civilians, because of their religion—have also appeared today? Does he also agree that the action that he and the Government are taking sends a signal to the world community that we will never again tolerate such dreadful atrocities in Europe?
    Mr. Robertson: I will set aside the worry that takes me when the hon. Gentleman praises and congratulates me, and assume that his remarks are welcome. The whole thrust of the talks that are taking place between the parties at Rambouillet, and the fact that we have summoned them together and they have come, is a clear signal that we are not willing to accept the kind of atrocities that have taken place or the kind of humanitarian crisis that was threatened before the end of last year. We must urgently make sure that the parties agree on a political way forward and that the international community makes sure that they stick to it.
    Mr. Robert N. Wareing: As the Contact Group called the Rambouillet summit, may I press my right hon. Friend on the participation of Russia? Is he convinced that Russia would support the sending of 30,000 troops to Kosovo? Even though we all sincerely hope that there will be a peaceful outcome as a result of the negotiations in Rambouillet, may I preach caution to him on the presence of 30,000 foreign troops in Kosovo? We know from Northern Ireland experience that progress toward peace often breaks down. If there are 30,000 troops in Kosovo, there could be a tremendous tragedy in that part of the world and British soldiers, among others, could die—and for what cause?
    Mr. Robertson: Russia is a full member of the Contact Group, and therefore a full participant in the talks and all the pre-discussion that took place. It is fully behind the need to move forward politically and to end the violence that was overtaking, and could easily again overtake, Kosovo.
    I am confident that, although our forces have pressures on them that they have probably never had before, they have the spirit, commitment and dedication to take on the tasks that are being placed on them, and that could be placed on them if the decision were taken to deploy them in this theatre alongside our NATO allies. I have just spent four days in the Gulf meeting a large number of our forces who are far from home. They are involved in dedicated and courageous activity out there. I sense in them their absolute commitment to maintaining and contributing to international law and order. I have no doubt that, if they are required to do so, they will rise to the occasion as they usually do.
    Mr. Andrew Tyrie: I understand that, although 2,000 monitors were committed to Kosovo as a
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    result of the Holbrooke agreement, in the end, only about two thirds of them arrived. What confidence does that give us that any commitment of forces from other countries will be fulfilled? Will the Secretary of State give us an idea of the maximum proportion that the British would be prepared to bear of the total force that may go into Kosovo?
    Mr. Robertson: I cannot give the House details, because the total size of the force is yet to be determined, and will not be determined until the force generation conference takes place. If the allied rapid reaction corps headquarters were to be deployed with associated elements, a possible British commitment of some 8,000 troops would be involved. The proportion will depend on the size of the total force, and on the number of troops that our allies contribute. When I met the other Defence Ministers last weekend, I recognised in them a determination to ensure that, if we get the political agreement that we are all hoping for at Rambouillet, any force that may be deployed in the area would be of a sufficient size to ensure that the settlement was delivered.
    Mr. John Randall: Is it envisaged that German troops will be part of the NATO force? Although I understand the need for unity among the allies and NATO, I reiterate the point made during a previous statement on Kosovo by the right hon. Member for Chesterfield (Mr. Benn) that the use of German troops would be at best insensitive and at worst highly provocative, and might jeopardise a fragile peace.
    Mr. Robertson: I shall show restraint and say that Germany expects to contribute to any force that may be deployed in pursuit of a peace agreement, and so it should. It is a proud democracy inside Europe. It will want to play a part, and we want it to be involved.
    Mr. Gerald Howarth: May I say how welcome it is that the right hon. Gentleman has come to the House to make the announcement to us before we have heard it on the "Today" programme? May I also congratulate him on the appointment of General Sir Mike Jackson, who will undoubtedly instil huge fear into anyone who threatens to step out of line?
    Pursuant to the question posed by my hon. Friend the Member for Reigate (Mr. Blunt), to what extent will the deployment of a force to Kosovo inhibit the Government's ability to deploy troops in other theatres should the need arise? I am thinking in particular of Sierra Leone.
    Mr. Robertson: I welcome the hon. Gentleman commendations. He is right to use such language about General Sir Mike Jackson, who will be formidable. We all wish him well if or when the deployment takes place. No one in the Ministry of Defence, least of all me as chairman of the Defence Council, will take any decision lightly—even about putting in place contingencies—unless I am satisfied that we are able to do what this nation is called upon to do.
    There must be a balance. I must take military advice on what is necessary. I have listened carefully to the commanders' responses to requests for information, and to discussions in NATO. The political decision is for me, but, as I have said, I listen carefully to advice, and I am

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    confident that we can act in the way that I have described while at the same time discharging our other responsibilities. If I were not confident, I would not take such action.
    Mr. John Butterfill: We all support what the Secretary of State is doing today, but will he give us a clear undertaking that there is no question of British troops being deployed in Kosovo, other than as part of a multinational force of a suitable balance and size?
    Mr. Robertson: I can give the hon. Gentleman that assurance.

    N. J. Hyam
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hill.]
    7.41 pm
    Mr. Peter Bottomley: I am grateful for the opportunity to raise the issue of the criminal cases review procedure, and, in particular, the case of Mr. Nicholas Hyam. First, however, let me welcome the Minister and the Whip to this short debate: I am grateful for their attendance.
    This evening, I was—and shall be—at a dinner and concert with my secretary, Patricia Greenwood, to commemorate her 12 years of service in the House before her retirement. I thank her, and private secretaries, agents and welfare officers serving all Members of Parliament, for working for the cure, care and comfort of constituents who raise problems. I also thank her husband Allan and their daughter, Freya Twin, who backs up my constituency work.
    I shall spend most of my time tonight trying to explain why I think Mr. Hyam's case could meet the criteria for the review procedure that has been introduced over the past few years. I understand that about 1,000 cases are being considered; about 200 were referred from the Home Office when the procedure was changed. I also understand that a case cannot normally be heard unless there has been an unsuccessful appeal against either sentence or conviction. Perhaps the Minister can give me more information, but I do not expect him to respond in any detail to the case that I shall be making.
    I do not intend to give a running commentary on what the judge, Mr. McHale, said at the Croydon court in 1996. The case is No. T960391; it took place between 14 and 18 June 1996, and the sentencing took place on 9 July. I first became involved when Stella Evans—who is not a constituent of mine, but who has been involved in the Association of Coastal Tenants and the coalition for the abolition of residential leasehold, a campaign to deal with the difficulties experienced by leaseholders—asked me to support her work. I must declare an interest, in a freehold flat in my constituency. I experience none of the problems experienced by leaseholders, but I put that on the record for the elimination of doubt.
    After I took up Stella's invitation, Mr. Nicholas Hyam came to me. He had served his sentence: he was convicted and gaoled for four years, although his co-defendant received a lesser sentence. He told me, straightforwardly but forcefully, that he had suffered an injustice. I think he accepts—certainly I do—that he committed bad practice and did other things that he should not have done, and I have given him forthright advice in regard to some of those things. It is also true that a civil dispute is in progress. I shall not go into the details—they are for the courts to determine—but let me quote one of the judge's sentencing remarks. He said after sentencing:
    "I shall not …be able to make a compensation order because I do not think it is a simple sort of case where a compensation order is available. There are too many imponderables."
    Some evidence was not admissible in the court case. That, I suspect, will be one of the grounds when a submission is made for favourable consideration to be given to referring the case to the courts for reconsideration.

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    In essence, one of the things that Mr. Hyam did was to use money that was in a tenants' account for other purposes. He then paid it back. Later, when a property was sold and Detective Constable Peter Savage had made investigations, it was shown that the money had been improperly used, although it was paid back before anyone knew that there was a problem.
    I do not want to get into the distinctions of the law because I am not a lawyer. Even when lawyers are involved, there is normally more than one side to the truth, in the same way that there can be more than one method of dishonesty. Anyone who went through the judge's summing up, which was lengthy—about 67,000 words—would be able to say that he got many things right. It is not for me to say that he got anything wrong, but it was a complicated business.
    The best thing for me to do is to acknowledge that the article by Detective Constable Peter Savage in Police Review on 20 September 1996 puts his side as investigating officer, but it is not up to the police to decide whether there is a prosecution; it is up to the Crown Prosecution Service. It is not up to the police to decide whether there is a conviction; that is up to the jury. It is not up to the police to decide what the sentence should be; that is up to the judge.
    I make the following comment not in passing, but as a major point, although it is not for the Home Office. It is time to bring our property law into the 21st century. The law should be more accessible to users, rather than being just the way legislators have chosen to leave it. It is a complicated area, but many of the things that the Associated Coastal Tenants wants are worth considering. They include the right of leaseholders to appoint their choice of managing agent; freedom of information, so that issues of insurance and maintenance funds are open and accessible; certified summaries of expenditure; maintenance money to be held properly in funds that cannot be used for other purposes; the Landlord and Tenant Act 1987 to be updated; a greater say by leaseholders in the choice of contractors; landlords and managing agents to be regulated; increased rights for recognised residents' associations; the relationships between landlords and managing agents to be clear and obvious, if there are any relationships; and a property log book.
    It is worth taking up a series of issues, but I shall use my remaining time to go through some of the issues as Mr. Hyam put them to me. As I say, it is not a matter for the House to judge, but it is important that people outside the House know that the job of a Member of Parliament is not just to pander to the prejudices of his constituents, but to be prepared to take up unpopular causes for unpopular people, who may have acknowledged that they have done things that are wrong.
    I say that, as many hon. Members could, with a background of having taken up cases. At my first constituency advice session, I took up the case of a man whose sister said he had been wrongfully convicted of attempting to steal a hand bag. It took five years to discover that the person involved in detecting that offence was pretty suspicious. There was a late overturning of the conviction.
    Other such cases include that of Judith Ward, who was wrongfully convicted of a motorway bombing; she could not possibly have done it. I have been involved in a case
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    in Florida, where someone had been on death row for two murders when the conviction, at least, was unsafe; I cannot prove that he was innocent, but the conviction was certainly unsafe. That case will not cover a Member of Parliament in glory, but it is right to be prepared to raise it, if necessary in public.
    Mr. Hyam says that six months after the property that is perhaps the best illustration of his problems was sold, the police raided his offices and took away the old files. When he owned the property, he had a lessee maintenance account containing approximately £20,000. That was earmarked for maintenance works, which were never undertaken as not all the lessees had paid.
    At that stage, Mr. Hyam had over 200 properties under management. He had an overdraft facility of £30,000 to manage the properties. That was insufficient. For example, the insurance renewals, which mainly fell together in June, came to more than £70,000. He was over his limit and had urgent company business to attend to. He acknowledges that he used £10,000 of the money in the account to pay for company business. That was a short-term measure taken out of desperation. The money was paid back shortly afterwards—a matter of weeks later. I do not justify his use of the money, and neither does he.
    When Mr. Hyam sold the property a completion statement was prepared and every penny was properly accounted for and paid to the purchaser. The purchaser came to court as a witness to confirm that no money was missing. The solicitor acting for the lessees wrote to question the completion. He was sent a copy of the completion statement and was satisfied that no money was missing. No complaints were made against Mr. Hyam by any of the lessees.
    Mr. Hyam goes on:
    "Whereas I acknowledge that it was bad business practice to use these monies that I held, and that I had no right to do so, how can it be possible to be charged with theft, when it is clearly proven that no theft took place? There was no deprivation, other than the very short time when the monies were used, then paid back almost immediately."
    I suspect that that sums up why the judge did not make a compensation order. However, that is not an issue for me, the Minister or the House to judge. I have merely illustrated a worry. The review system has been brought into operation because of the worries.
    I should like to go briefly through some of Mr. Hyam's points. Part of the problem is to do with the fact that he paid some builders in cash. He should not have done so. I think that it is fair to say that that is reasonably common practice in the building maintenance business. I do not have to approve of the practice. If Mr. Hyam writes on the cheque stub that the money was for a certain builder, but the cheque was actually written for cash, which he gave to the builder, it would be pretty strong to describe that as fraud. Such issues might be worth a review, when reconsidering the judge's summing up.
    I appreciate that sending the case to review—which is a matter for Mr. Hyam and his solicitors, not for me—will not give the review commission the responsibility to decide whether the conviction was unsafe. When the commission considers a case, it has to decide whether there is a reasonable prospect that there would be some difference to the verdict if it were sent back to the court.
    The first count was about the estimates for a property. He was sentenced to 15 months for that. A second count related to a property in Littlehampton in need of external

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    redecoration. Quotes were obtained and the cheapest was taken. The work was done and the builder was paid in cash. The other quotes obtained were accepted as genuine quotes. They were more expensive, so money was saved by using the builders that were chosen. No one has alleged that the works were not carried out. One lessee said in evidence that there were paint runs and some poor painting. That was put right. Mr. Hyam asked:
    "If the works were done, especially for a cheaper price than others tendered for, how can anyone be defrauded?"
    He says that press cuttings about his case state that the prosecution maintained that he deliberately submitted inflated quotes, had the work done and made a dishonest profit. He goes on to say:
    "Not only is this not true, it cannot be true, for I only accepted"—
    the quotes from these particular builders—
    "when they were the lowest quote (they quoted for other works, were more expensive and did not get the contract, although none of this came out in the trial as the judge ruled it inadmissible."
    I repeat that it is not my task to criticise the judge or any of his decisions. I merely want to illustrate the points that would be considered if the review commission allowed a new trial. Had the original appeal been accepted, those issues could have been considered, but for reasons that I am not aware of, the appeal was not successful. Hon. Members will know that under the old Home Office review procedure and the present procedure there have been a fair number of appeals or applications for appeal in which only at the end has it been possible to establish more of the truth or cast sufficient doubt on a conviction.
    The other counts are different. Mr. Hyam regards some of the issues as bizarre. I think that I have said enough to show the complexities as well as the simplicity of the issue. All I can say—and my purpose is not to get everybody in prison to write to me—is that, in my experience, in cases where someone has persistently said that they were wrongly accused or convicted, they have turned out to be right. They have not always been proved innocent, but there may have been an unsafe conviction.
    I believe that unless right hon. and hon. Members are prepared to do as much for people who have behaved badly or committed bad practice as they are for people who appear to have done nothing wrong, we are not doing our job right. My expectation is that during my remaining service in the House, along with the successor to Mrs. Patricia Greenwood, I shall continue working for Stella Evans and other leaseholders who are exploited and for those who are in prison or who have been in prison and believe that their convictions should be re-examined. I am grateful for the opportunity to put those issues to the House this evening and I look forward with interest to the Minister's reply.
    7.56 pm
    The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): I congratulate the hon. Member for Worthing, West (Mr. Bottomley) on securing tonight's debate and on the characteristically reasonable way in which he has presented his arguments. As he said, Mr. Hyam was convicted in June 1996 of 13 counts—of furnishing false information, using a false instrument and theft—
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    and sentenced to four years' imprisonment. The hon. Gentleman will accept that it would be inappropriate if I were to become involved in a debate about property law and still less the practices of the construction industry. He will forgive me if I do not take that path, tempting though it may be.
    Mr. Hyam's offences related to documentation that he had furnished to the leaseholders of various properties. The properties were managed by a company that he ran, and in all but one case a company of which Mr. Hyam was a director owned the freehold of the property. The documentation was used to support claims for payment from the leaseholders for work carried out on the properties. The offences of theft related to cheques that Mr. Hyam had made out from the account of one of his companies. The cheques were made payable to various individuals, but their stubs purported to show they had been made out to firms for work done on the properties, as the hon. Gentleman conceded in his speech.
    Mr. Hyam appealed against his convictions on grounds relating to the judge's summing-up. The hon. Gentleman referred to some of the specific comments that were made. In January 1997, the Court of Appeal dismissed his appeal. Mr. Hyam was released from prison on licence last July.
    I would not presume to comment on the merits of the case against Mr. Hyam, nor would it be proper or useful for me to do so. The hon. Gentleman has made it clear that he is not looking to me for such comment. What I can do briefly—and he may find it helpful—is to outline the avenue open to someone in Mr. Hyam's position who wants to continue to contest a conviction.
    As the hon. Gentleman will know, before 31 March 1997, the Home Secretary had the power to refer a case in which someone had been convicted on indictment in England or Wales to the Court of Appeal. The court had to treat the referral as an appeal by the person convicted. The Home Secretary used that power to bring before the court cases, particularly where the court had already heard and dismissed an appeal, in which he believed there had been a miscarriage of justice, for instance, on the basis of evidence that had recently come to light, and that was a common practice.
    Following a recommendation of the royal commission on criminal justice, the Criminal Appeal Act 1995 changed the arrangements for the review of an alleged miscarriage of justice. The Act transferred from the Home Secretary to a new and independent body, the Criminal Cases Review Commission, the power to refer cases to the Court of Appeal. The commission is empowered to review and investigate alleged miscarriages of justice in England, Wales and Northern Ireland.
    The commission can gain access to documents and other material that may be relevant to its investigations and, if it thinks fit, can appoint an investigating officer. Anyone can apply to it to refer a conviction or sentence to an appellate court. If the commission makes a reference, the court has to treat it as a fresh appeal.
    The commission may make such a reference only if it concludes that there is a real possibility that the conviction or sentence will not be upheld. A conviction can be referred either because of an argument or evidence not raised in the proceedings that led to the conviction or on any appeal or application for leave to appeal against it, or because the commission thinks that there are exceptional

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    circumstances that justify making such a reference. Either the applicant or the commission may identify the argument or evidence not previously raised, which does not necessarily need to be newly discovered.
    I understand that to date, no application has been made to the commission in respect of Mr. Hyam. I suggest to the hon. Gentleman that, if Mr. Hyam wants to continue to contest his conviction, he should make such an application. I would be happy, if he felt that it would be
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    helpful, to send the hon. Gentleman a leaflet that sets out what I have said about the commission's functions, and explains how to make an application. I am sure that his constituent may find it helpful.
    Mr. Bottomley: I am grateful to the Minister.
    Question put and agreed to.
    Adjourned accordingly at two minutes past Eight o'clock.