Commons Sitting of 21 January 1999

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

    Fairness at Work White Paper
    Mr. David Borrow: What assessment he has made of the impact on families of the new rights proposed in the Fairness at Work White Paper. [65190]
    The Minister of State, Department of Trade and Industry (Mr. Ian McCartney): The measures in our proposed legislation will encourage a partnership approach and a fairer workplace environment, which will benefit all employees and their families.
    We are introducing nine specific measures, which will help parents and carers to balance work and family life by providing three months' parental leave for mothers, fathers and adoptive parents, by providing domestic time off in emergencies for all employees and by simplifying and improving women's maternity rights.
    Our proposals were developed in consultation with the key stakeholders. Four out of five employers who commented on the White Paper's family-friendly employment proposals supported them in some measure. Our proposals to simplify the maternity provisions received almost universal support.
    Mr. Borrow: I am sure that many families will welcome the White Paper. Does my hon. Friend agree that employers in both the public and private sectors benefit from the operation of family-friendly policies? Will he influence his Department to spread best practice from both public and private sectors to employers who do not yet operate family-friendly policies?
    Mr. McCartney: I thank my hon. Friend for that question. Our fairness at work proposals have received a great deal of support throughout government, employers' organisations and trade unions, which are working together to improve best practice. The Bill will result in a significant change in culture, with the support of virtually every employer in Britain.
    Mr. Desmond Swayne: Has the Minister assessed the impact of parental leave provisions on the employment of women in the future, given that his departmental assessment is that those provisions will cost £110 million?
    Mr. McCartney: The hon. Gentleman should realise that the parental leave directive was agreed by employers and trade unions, which made joint recommendations. As a consequence, the overwhelming majority of employers support the measures, which will at last give men and women a chance to balance their work responsibilities with their caring responsibilities at home.
    Mr. Jim Marshall: Does my hon. Friend accept that many family members work in companies that employ fewer than 20 people and that, in some cases, those are among the worst employers in the country? In view of that, will he give further thought to reducing the number of employees in a company who are excluded from the provisions of the proposed legislation?
    Mr. McCartney: The proposals are comprehensive. My hon. Friend is asking about a different issue, which will be dealt with in the fairness at work Bill under recognition issues. There will be no change in those proposals. Employers of whatever size will have opportunities to be represented on issues of discipline and grievance procedures. Application of the proposals will be universal and parental leave has the support of employers' organisations.
    Mr. Tim Boswell: May I take this opportunity to welcome the new team, although it is nice to have to deal with one of the old lags first. Will the Minister enlighten the House in two respects? First, will he clarify which is the authorised version of the recognition proposals—the version according to Derby, South or the version according to Hartlepool—that has finally been adopted?
    Secondly, on fairness at work more generally, will the Minister explain how he can make statements about universal support and a wide welcome for his family-friendly policies when he seems incapable of producing an overall assessment of the compliance cost to British industry?
    Mr. McCartney: From one old lag to a very old lag, I thank the hon. Gentleman for welcoming my continuing presence at the Department. I may qualify for unfair dismissal under the Bill.
    Opposition Members must realise that we have taken into account the effects of the proposals on all workers in Britain. The hon. Gentleman is a little off-beam. He simply cannot accept the changing culture in the workplace, with employers and employees striving for better partnership arrangements, including a partnership that reflects their rights and responsibilities. When we publish the Bill soon, he will see in the round the comprehensive nature of our proposals and the overwhelming support that they will receive from people in the workplace—both employees and sensible employers.

    Investment
    Fiona Mactaggart: What discussions he has had with his international partners on the prospects for an international agreement on investment; and if he will make a statement. [65191]
    The Minister for Trade (Mr. Brian Wilson): Negotiations in the Organisation for Economic Co-operation and Development of a multilateral agreement on investment are no longer taking place. The United Kingdom and the European Union as a whole have called for investment to be on the agenda of a future round of negotiations in the World Trade Organisation. Decisions on the content of that agenda will be taken at the WTO ministerial meeting later this year. In the meantime, the UK is participating in the analytical work of the WTO trade and investment working group.
    Fiona Mactaggart: Many people in my constituency who expressed concerns about the MAI process will be relieved at its collapse. They urge me to ensure that the future process is less deformed and takes better account of environmental, social and developmental issues in discussions on international investment. Will the Minister reassure me that a framework will be provided for future negotiations?
    Mr. Wilson: I endorse my hon. Friend's comments. I came late to this issue, but there was no doubt that, from the outset, the perception arose that this was a multinational conspiracy, and that it was the developed world putting one over on the less-developed world. It does not matter about the accuracy of those perceptions, the fact that they were allowed to run made it extremely difficult to secure the agreement that was being sought.
    We should start with a clean sheet of paper and seek to obtain an agreement on investment rules that serves both the developed and the less developed world. We must also make it clear from the outset that it must be done on the basis of consensus, and that it must take full account of environmental and social issues, such as conditions of employment.

    Small Firms
    Mr. Howard Flight: If he will make a statement on Her Majesty's Government's policies to assist small firms. [65192]
    The Minister for Small Firms, Trade and Industry (Mr. Michael Wills): Small and medium businesses are crucial to a successful enterprise economy, and the Government are firmly committed to stimulating the creation, competitiveness and growth of new and small businesses.
    The key principles underlying the Government's approach include fostering an enterprise culture that encourages innovators and risk takers; providing and maintaining a supportive economic environment; identifying and removing barriers to growth and providing high quality business support for firms at all stages of
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    their development. The Government also work within the European Union to help to further these aims throughout Europe.
    Mr. Flight: I welcome the new Minister to his post. Is he aware of the recent national insurance contributions regulations, which can impose huge additional taxation on entrepreneurial businesses, specifically on approved and unapproved pension schemes when companies go to the market to float for money, and on share conversions in management buy-outs where the business is succeeding? If he is aware of that, please could he make appropriate representations to his colleagues at the Department of Social Security for some amelioration of the situation? If he is not fully aware of it, please could he look into in the matter?
    Mr. Wills: I thank the hon. Gentleman for his kind words of welcome. The Government are proud of their record on corporate taxation. We have conducted a major reform, and as a result corporation tax is at its lowest level ever—20 per cent. for small firms. That is the lowest level of any major European economy.
    Yvette Cooper: I welcome my hon. Friend to his new position, and wish him well at the Dispatch Box. Is he aware of the importance to small firms of proper enforcement of the Late Payment of Commercial Debts (Interest) Act 1998? A company in my constituency received a letter from Rentokil saying that it was prepared to continue business only on its own late terms with limited interest. Since I wrote to the Department, Rentokil has withdrawn that letter, and has promised to comply with the Act. What other action is the Department taking to ensure compliance with the Act?
    Mr. Wills: I thank my hon. Friend for her kind words of welcome. I reassure her that the Government are committed to changing the whole culture of payment. The 1998 Act was an important start, but we realise that we must do more. That is why we have established the better payment practice code. The better payment practice group contains representatives from all sides of industry, including large and small firms. It ensures that the spirit as well as the letter of the Act is implemented. I understand that Rentokil has agreed to comply with both the spirit and the letter of the Act.
    Mr. Brian Cotter: I welcome the Minister to his new post. Is he aware that, in a survey this month, more than 50 per cent. of small business owners said that they would not consider starting a business because of the burden of legislation they now face? Will he give an assurance that legislation this year will not affect the viability of small businesses?
    Mr. Wills: The Government are committed—[Interruption.] We are, indeed, committed to small firms and to ensuring that as many people as possible start up small firms. I am delighted to tell the House that the latest evidence from Barclays bank and National Westminster is that business start-ups are up in the third quarter of last year compared with the third quarter of 1997. It shows that the Government's policies on small firms are working.

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    As regards legislation, we are aware of the problems that small firms experience in complying with regulations. That is why we have set up the better regulation task force to ensure that regulations are implemented effectively and sensitively in relation to small firms and, indeed, all businesses.
    Mr. John Healey: An important part of the Government's policies to support small firms is help with start-ups—especially in areas such as Rotherham, where the ratio between employers and population is only about half the national average. We welcome the Government's commitment to supporting 10,000 new start-ups in the high-tech sector this year, but what steps is the Department taking to support start-ups in other industries?
    Mr. Wills: We are committed to helping all start-ups. The competitiveness White Paper is particularly dedicated to helping businesses to start up when we think that they have a high growth potential that will create jobs, productivity and growth, but, as I have said, we are committed to helping all start-ups. That is what business links are tasked with, and that is what we shall continue to deliver.
    Mr. John Redwood: I congratulate the Minister on his appointment. Under Labour, only a few people are born to office. Some seek office to live well, and some have office thrust upon them. As the Minister has no salary and does not do red boxes, I assume that he is in the latter category.
    One of the most important things that the Government can do to assist small firms is to ensure that the law applying to companies is fully and fairly enforced on all of them, so that they can trade on equal terms. The Opposition welcome the institution of a rogue director hot line, which the Government have set up to help small firms in this context. Does the Minister agree that Mr. Derek Draper should be referred to the hot line for his violations of company law at 3C Ltd? Does he agree that new Labour establishment should be referred to it for the failure of Progress Ltd. to submit accounts for that Blairite magazine—and does he think that he should be referred to it for his failure to submit the necessary paperwork relating to one of his companies?
    Mr. Wills: I hoped that the right hon. Gentleman might start the new year with a more gracious approach, but he has reassured me nevertheless by continuing in the spirit that he adopted last year.
    Of course—
    Mr. John Bercow: Spit it out!
    Mr. Wills: That is exactly what I am about to do, and the hon. Gentleman will welcome the answer when I give it.
    Let me set the record straight in relation to my own affairs. Fellows of All Souls—of which I believe the right hon. Gentleman is one—used to conduct their research in libraries, and they used to employ researchers. It appears that they now conduct their research in The Times diary, in which that story appeared. Unfortunately, those who snout around in the inaccurate and the meretricious come
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    up with the meretricious and the inaccurate, which is what the story was. Every company with which I have been associated has filed its returns in compliance with the deadlines set by Companies house.
    As for the other matters to which the right hon. Gentleman referred, I am sure that the Department will examine them closely, fairly and without doing anyone any undue favours.

    Science Spending
    Dr. Stephen Ladyman: What assessment he has made of the strength of the relationship between science spending and UK competitiveness. [65193]
    The Secretary of State for Trade and Industry (Mr. Stephen Byers): Our ability to compete effectively as a knowledge-driven economy will depend on our commitment to scientific research and its exploitation.
    In partnership with the Wellcome Trust, we will spend an extra £1.4 billion on science and engineering over the next three years. That will ensure that we can retain our position as a world-class country in terms of science, reversing the decline in investment for which the last Government were responsible.
    Dr. Ladyman: I congratulate my right hon. Friend on his new post, and thank him for his answer.
    Given what my right hon. Friend has said about the link between science and competitiveness, and given that the Government, through the comprehensive spending review, have already been more generous to public-sector science than most scientists dreamed was possible, will my right hon. Friend tell us what plans he has to stimulate further science and research in the private sector? In particular, will he tell us what thought he has given to fiscal incentives such as tax rebates for companies that reinvest a significant proportion of their income in research?
    Mr. Byers: I thank my hon. Friend for his warm words of welcome. I agree that the £1.4 billion extra is an excellent first start, as is the 20 per cent. increase in the Department's innovation budget, but I regard it just as a start. It is beginning to deliver our commitment as a Government to science, but we can do more.
    My hon. Friend has drawn the House's attention to the possibility of tax incentives for the private sector to support research and development. It is true that, with the exception of the pharmaceutical industry, spending in the private sector on research and development has declined dramatically over recent years. We need to do something to remedy that. We will look closely at how we can introduce a financial regime—a tax regime—that will promote and encourage investment in those important sectors.
    Mr. Ian Bruce: I also welcome the right hon. Gentleman to his post.
    May I make a serious point about the level at which science, information technology and so on is represented within Government? I have long argued that we should have a Minister of State, rather than an Under-Secretary of State, in the Department of Trade and Industry to do

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    that important job, but what signal does it give to the rest of business that the Secretary of State's Department has two unpaid Ministers dealing with science and technology? Surely that is a worthwhile job within Government, not just an add-on that is not even paid. Will he please start fighting for science and technology in his Department?
    Mr. Byers: Whether the Ministers are unpaid or not, they have managed to achieve far more in their period of office than the hon. Gentleman's Government ever did. The fact that we have secured an extra £1.4 billion for the science base shows that we are achieving value for money from our Ministers. I should have thought that he would congratulate the Department on that fact. If it helps him, he will be pleased to know that, as the Cabinet Minister responsible for the Department, I shall take a close personal interest in how we can encourage and exploit the science base and the knowledge that we have.
    Mr. Ian Pearson: I congratulate my right hon. Friend on his appointment. In particular, I welcome his comments about the boost to the science and engineering base. Is he aware, however, that, under the Tories, spending on development fell to a paltry 3 per cent. of total civil Government R and D expenditure, perpetuating the problem of Britain being good at R but bad at D, and of commercial ideas that were generated in Britain being exploited elsewhere? Will he talk to his colleagues in the Department for Education and Employment about what can be done to improve the percentage of expenditure that goes on D, so that we can have a joined-up Government approach to tackling the development gap?
    Mr. Byers: My hon. Friend makes a good point. I have already begun discussions with my right hon. Friend the Secretary of State for Education and Employment about how the Department of Trade and Industry and the Department for Education and Employment can jointly deal with the many weaknesses that exist because of the situation that we inherited. There is no doubt that it is one of those sectors where we have the potential to be world class. It has been neglected and we now have a Government who are delivering on that important agenda. We intend to move forward and to deliver on our commitment to the science base and to our scientists, so that we can ensure that we are world class in the century ahead.
    Mr. John Redwood: I too congratulate the Secretary of State on becoming the third Labour holder of that office in under two years. I wish him every success in trying to clear up the dreadful mess that was left behind by his predecessor—a mess both in the Department and in the wider business world. I trust that the plight of British industry will be at the top of the Secretary of State's list of priorities.
    Given the Government's enthusiasm for the promotion of genetically modified food, does the Secretary of State see any conflict of interest in Lord Sainsbury, the Minister in the other place with responsibility for technology, being an investor in Sainsbury's, the first supermarket to promote that food; an investor in Diatech and Innotech, two companies that are involved in the technology sector; and having links with the Gatsby Trust, which finances research in the sector—while at the same time controlling
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    policy and grants to the industry? Will the Secretary of State ask his Minister to step aside and find a Minister who has no actual or apparent conflict of interest to do the work?
    Mr. Byers: I shall not be asking that Minister to step aside because steps have been taken to ensure that there is no conflict of interest. On the day on which the House of Lords has produced a significant report on GM foods, I would have expected that, as the principal Opposition spokesman on such matters, the right hon. Gentleman would have addressed the substance of that report. The fact that he has failed to do so says so much more about his priorities than it does about his real desire to move the debate forward in this important area.
    I have no doubt that there is no conflict in my Department on these matters. I will ensure that there is an open and transparent public debate about GM foods which will restore public confidence in this important area. I can guarantee that, but it will not be helped if, instead of seeking to rebuild public confidence in our science and scientists, he simply stands on the sidelines sniping continuously. That is no way to conduct a responsible and reasonable debate.

    Internet
    Dr. George Turner: What steps he will take to encourage UK business and industry to use the internet. [65194]
    Ms Christine Russell: What steps he is taking to encourage the development of electronic commerce in the UK. [65201]
    The Minister for Competition and Consumer Affairs (Dr. Kim Howells): The opportunities offered to businesses large and small by the internet are enormous. That is why the Government placed the use of the internet, and in particular the development of electronic commerce, at the heart of our recently published White Paper. Our goal is an ambitious one: to make the UK the best place in the world for electronic trading. The White Paper set out a wide-ranging agenda of modernisation to achieve this, including an electronic commerce Bill to remove legal barriers, and an extra investment of some £20 million in the information society initiative, to provide practical support and assistance to small firms.
    Dr. Turner: I thank my hon. Friend for that full answer. Given the prediction, which he will acknowledge, that, before the year 2002, there may be a 30-fold increase in the use of electronic commerce throughout the globe, does my hon. Friend agree that that represents a major threat to those who are complacent about its importance as well as some amazing opportunities for those who wish to grasp them? I accept what my hon. Friend said about the legislative background, but does he agree that the Government need to be pro-active so that British companies recognise the opportunities and have access to the skills and finance that they may require?
    Dr. Howells: My hon. Friend is quite right. On checking, I can tell my hon. Friend that e-commerce is currently valued at $12 billion a year world wide and that by the year 2002 it is reckoned that it will be $350 billion

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    to $500 billion a year and we must have a considerable piece of that action. The Government have launched the adviser skills initiative to ensure that businesses advisers can deliver consistent and integrated advice on information technology and best business practice.
    We now have an e-commerce resource centre operating on the internet which will provide businesses with the information, advice and the tools necessary to exploit fully the opportunities of e-commerce. We are drawing up an electronic code of conduct for businesses, which will enable traders to have effective redress and access to complaints procedures and to be identified by a digital hallmark so that everybody involved in e-commerce has confidence that business will be delivered securely.
    Ms Christine Russell: Will my hon. Friend join me in congratulating the business link in my constituency of Chester, which runs a large number of innovative and imaginative programmes and courses to help small firms in particular gain further experience and access to business? I believe that people from 200 small firms attended the last training course. How does my hon. Friend think that the forthcoming e-commerce Bill will further extend the opportunities, particularly for small businesses and start-up businesses?
    Dr. Howells: I should certainly like to congratulate the business link in my hon. Friend's constituency. Across the country, there are also other initiatives that are extremely interesting and take the issue seriously—which, from the jibes that I heard coming from the Opposition Benches a moment ago, is more than Conservative Members can do. The electronic commerce Bill will establish trust in electronic trading by introducing a voluntary licensing scheme for organisations providing secure message services. The Bill will modernise the law so that it recognises electronic signatures and will, whenever it makes sense to do so, remove current laws that insist on the use of paper. The Bill will introduce voluntary licensing agreements for bodies providing electronic signature services and confidentiality services. It will also provide new powers and proper authority for law enforcement agencies to gain legal access to encryption keys and other information protecting the secrecy of stored or transmitted data.
    Mr. Tony Baldry: Clearly, this is going to be a complex Bill. Will the Minister say when the draft Bill will be published? Is it intended that it shall be introduced in the House or in another place? The Minister will be aware that the Trade and Industry Select Committee is about to conduct an inquiry into e-commerce. Will the Government consider the Committee's work effectively as pre-legislative scrutiny work?
    Dr. Howells: I congratulate the Committee on the interesting and pioneering work that it has done. The Government hope very much to introduce the Bill just after Easter. I have absolutely no doubt that full account will be taken of the Committee's work.
    Mr. David Chidgey.: May I also welcome the new Front Benchers to their new positions, and welcome their support for e-commerce? I should like to take the Minister a stage further in his remarks on the
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    regulation of access to e-mail transmission codes. He will be aware of the public's great concern about how access to the codes should be controlled—about the "trusted third party" concept. He will be equally well aware of the great concern about whether organisations such as GCHQ should become a so-called trusted third party. If the House is really concerned about controlling criminal activity on the internet, would it not be much better to press for control of pre-paid mobile telephones, which are used by drug dealers, than to try to foist control by a Government agency on electronic commerce?
    Dr. Howells: That is a long and complex question, and I truly hope that it will not be a long and complex answer. I hope also that the hon. Gentleman's question was not a first bid for his party's leadership. Strong encryption is very useful, as it is used to protect the movement of huge amounts of money through cyberspace. We shall be very careful in ensuring that the libertarian and anarchic spirit of the worldwide web is not circumscribed so that growth is prevented. I should not like any Government—ours, the Americans' or any other one—so to circumscribe the internet and e-commerce that growth is prevented. We need growth.

    Deregulation
    Mr. Richard Page: How many regulations affecting business have been revoked by his Department since May 1997. [65197]
    The Minister for Competition and Consumer Affairs (Dr. Kim Howells): Between 1 May 1997 and 31 December 1998, my Department revoked 16 statutory instruments affecting business and also simplified a further 16 statutory instruments affecting business.
    Mr. Page: That is an appallingly low figure, and the Minister should be suitably ashamed of presenting it to the House. Is he aware that, when in opposition, his colleague—who has recently become a Treasury Minister, because of an unexplained and unexpected vacancy—berated my right hon. Friend the Member for Henley (Mr. Heseltine) when he achieved more than 1,000 deregulations? The Minister now offers an appallingly low figure. Will he now go back to his officials and tell them: "I do not wish the Government to be so humiliated again. Get working on deregulation, so that when that hon. Member asks me that question again in a year—which he will do—I can give a really super answer, helping to take the burdens off the back of small business men and women"?
    Before he answers that, I have a further question: how many regulations has his Department put on to the backs of small businesses?
    Dr. Howells: I was going to ask how the hon. Gentleman—whose friendship I greatly value—could say that with a straight face, but he did not. The list of regulations passed by the Conservative Government between 1979 and 1996 reads like "War and Peace". I have not even got past the first chapter. They passed 45,000 regulations during that period. In the three years before they lost power in May 1997, they passed 10,000 new regulations. Since we came to office, we have introduced 2,700 new regulations. I hope that that answers the hon. Gentleman's question.

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    I am not one of nature's regulators. I should like regulation to decline significantly in this country, but, by God, we have a mountain to climb to get there, because the Conservatives left an enormous avalanche of legislation for us to tackle.
    Mr. Denis MacShane: I thank my hon. Friend for his reply and welcome him as the representative of the anarchist-libertarian wing of new Labour. Has he noticed that the number of regulations that the Labour Government have repealed corresponds exactly with the 16 Tory Back Benchers who have turned up on this historic day, when Question Time is taking place in the morning? Does that reflect their lack of interest in the subject or the fact that more than 200 of them have second jobs, directorships and consultancies and are out lining their pockets instead of being here doing their parliamentary business?
    Dr. Howells: I can answer only a small part of that. I suspect that there is great confusion among the Conservatives about regulations because, clinically, they are still in denial about them.
    Mr. Christopher Chope: The Minister has spoken about the need to simplify regulations. Will he undertake to simplify the working time regulations, which are the most complex and burdensome regulations imposed on British business in a generation? They have been much criticised by the chambers of commerce and are proving difficult to implement. Will he look at them again and come back with simpler regulations? Will he guarantee that, in future, he will always follow the advice of the better regulation task force, which also criticised those regulations? The Government prided themselves on setting up the unit, but was that not just a lot of rhetoric? Is not the reality that the regulations coming from this Government are more burdensome and complex than ever?
    Dr. Howells: I have every confidence that my hon. Friend the Minister of State, Department of Trade and Industry will ensure that every regulation introduced by his unit will be good, necessary and relevant.

    Post Office
    Mr. Bob Laxton: When the Government intend to publish their White Paper on the future of the Post Office. [65198]
    The Secretary of State for Trade and Industry (Mr. Stephen Byers): My right hon. Friend the Member for Hartlepool (Mr. Mandelson) said in his statement to the House on 7 December on the future of the Post Office that a White Paper would be published early in the new year. Work is proceeding with the intention of publishing the White Paper as soon as possible.
    Mr. Laxton: I welcome my right hon. Friend to his new job. The Post Office is a little disappointed that the White Paper has not already been published. The Dutch and German post offices have been gobbling up companies in Europe pretty rapidly. I very much welcome the Post Office's decision to buy into German Parcels. That will greatly assist its future in Europe. To be specific,
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    will the White Paper allow the Post Office the greatest possible commercial freedom? Will the new regulator have sufficient powers to ensure that the Post Office improves on its excellent service to businesses and the community?
    Mr. Byers: I thank my hon. Friend for his words of welcome. The Post Office is not disappointed with the time scale in the White Paper. It is closely involved in discussions about the White Paper and is fully aware of the issues that we wish to address. On 7 December, my predecessor made it very clear that we want a new future for the Post Office. We want to lift the cloud of uncertainty that was created by the previous Government and ensure that it is no longer starved of investment. We are in the process of doing that and the Post Office is already using its new freedoms. For example, it acquired German Parcels at the beginning of this year. The consumer will also benefit from the proposed cut in the price of a second-class stamp—the first cut in many years—which will be welcomed by tens of thousands of people who use second-class mail. This is the future for the Post Office. We are delivering on our promise and supporting the Post Office, instead of neglecting it as the Conservatives did.
    Mr. Stephen Dorrell: I welcome the Secretary of State to his new responsibilities. Will he explain why he thinks that taxpayers should continue to be involuntary risk-bearing shareholders in the Post Office? Will he also explain why he thinks it is in the interests of the Post Office that it should be denied access to the capital markets to allow it to participate in the consolidation of postal services around Europe to which the hon. Member for Derby, North (Mr. Laxton) referred?
    Mr. Byers: I thank the right hon. Gentleman for his words of welcome. As a former Treasury Minister, he will know very well that the financial regime under which the Post Office operated under the previous Government was—
    Mr. Dorrell: Not as good as it could have been.
    Mr. Byers: The right hon. Gentleman is absolutely right. We are now tackling those deficiencies. That is why we have restricted the external financing limits which ensured that the bulk of the profits made by the Post Office went back to the Treasury. We are now allowing the Post Office to keep a far bigger proportion of its profits so that it can invest in the future. Taxpayers have an interest because they are the consumers. We want a Post Office offering high-quality services at affordable prices and we now have a regime to achieve those objectives.
    Mr. Martin O'Neill: I welcome my right hon. Friend to the Front Bench and congratulate him on his involvement in negotiations regarding the Post Office in his previous role. Can he confirm that the recent acquisition of German Parcels and the circumstances surrounding it necessitated a degree of commercial confidentiality that is consistent with commercial freedom? Opposition Members must realise that the new Post Office will behave in a different way, but, at the

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    same time, there will be processes involving the regulator, which will entail a degree of accountability and transparency consistent with its new freedoms.
    Mr. Byers: My hon. Friend makes an important point, with which I agree. We need to put in place a proper system of liberalisation and tough regulation for the new Post Office. The White Paper will address those issues, but Opposition Members must acknowledge that, because we are in a new relationship with the Post Office, we shall need to respect commercial confidentiality; otherwise, we shall make the Post Office vulnerable to foreign competition. Opposition Members may want that, but we certainly do not. We want a Post Office that will be a partner in change, not the victim of change. That is what we want and we have now put in place the regime to ensure that it happens.

    Energy Policy
    Mr. Owen Paterson: If he will make a statement on the Government's energy policy. [65199]
    The Secretary of State for Trade and Industry (Mr. Stephen Byers): The Government are committed to competition, and to an energy policy based on secure, diverse and sustainable energy supplies at competitive prices.
    Mr. Paterson: The Secretary of State did not mention that the Government are committed to raising 10 per cent. of energy from renewable resources by 2010. If half that energy were to come from wind, 10,000 to 20,000 turbines would have to be built. The 800 that have been built—in areas such as the Shropshire-Wales border—are an environmental disaster and bitterly resented by locals. Contrary to the Secretary of State's statement, they generate energy at three to five times the cost of other sources. They are extraordinarily unreliable. They have to be closed down in freezing weather, when demand is at its peak—
    Madam Speaker: Order. The hon. Gentleman must ask a question; otherwise, I will refer him to an Adjournment debate, as that sounds like a very good subject for such a debate.
    Mr. Paterson: Will the Government abandon this foolish policy?
    Mr. Byers: A long question deserves a short reply. A paper on renewables will be published by the Government shortly.
    Mr. George Stevenson: In the review of energy policy, will my right hon. Friend consider the activities of the Coal Authority, particularly in regard to abandoned and disused mine shafts? Is he aware that the Coal Authority's records in this regard are notoriously unreliable? Will he therefore consider urgently what action the Coal Authority should take to make sure that its records are accurate and clearly show not only the siting, but the status and condition of the abandoned mine shafts?
    Mr. Byers: My hon. Friend makes a very important point, which affects many communities up and down
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    the country. The Government take the matter seriously and, as a matter of urgency, we will be asking the Coal Authority to review its procedures to ensure that accurate information is available, so it can plan accordingly.
    Mr. Eric Forth: In congratulating the Secretary of State on his appointment, may I ask him to confirm that the motto of his Department will from henceforth be, "Let Byers beware"? Why have the Government sought on environmental grounds successively to increase the tax on fuel duty for motor vehicles, while simultaneously reducing the tax on domestic fuel, which pollutes the atmosphere as much as, or even more than, vehicle fuel?
    Mr. Byers: I thank the right hon. Gentleman for his welcome. As far as fuel is concerned, we know that the Conservative Government sought to dramatically increase the rate of VAT.
    Mr. John Bercow: Do not split infinitives.
    Mr. Byers: The hon. Gentleman must be careful, otherwise someone will split his infinitives for him. There are many Labour Members who would gladly volunteer to do so. The hon. Gentleman is trying to divert me from the important political point that I was making. The previous Conservative Government put VAT on domestic fuel at 17 per cent. Even in opposition, we managed to defeat that and, in government, we were able to reduce VAT to 5 per cent. That has been welcomed by consumers, and we are looking at how we can ensure that, in terms of a proper, sustainable environmental policy, we can have fuel that is not costly—the right hon. Gentleman would like that—and within a safe and secure environmental policy.

    Regional Start-ups
    Dr. Phyllis Starkey: What measures he is planning to help new start-ups in the regions. [65200]
    The Minister for Small Firms, Trade and Industry (Mr. Michael Wills): Support for start-ups is seen as making a significant contribution to economic growth, prosperity and competitiveness. The recent competitiveness White Paper set out a commitment for business link partnerships to provide sustained, tailored advice and support to innovative start-ups with real growth potential. Our target is that at least 10,000 businesses a year will receive such support by 2001.
    Dr. Starkey: My hon. Friend will be aware that UK science is at the international forefront in biotechnology, but that there is a relatively poor take-up of biotechnology in start-ups of small firms in the UK, compared with the United States. The major advantage in the United States is the ready availability of venture capital for such biotechnology firms. What action are the Government taking to ensure that venture capital is readily available here in every region?
    Mr. Wills: My hon. Friend draws attention to an important matter. It is crucial that start-ups, especially in

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    high technology, get access to the right sort of capital. The competitiveness White Paper set up plans to that end. We are setting up an enterprise fund worth £150 million over three years. There will be a national venture capital fund, which we are currently discussing with leading financial institutions. We also want to set up regional venture capital funds, and we will work with the regional development agencies to develop that proposal.

  CULTURE, MEDIA AND SPORT (MILLENNIUM EXPERIENCE)
  The Secretary of State was asked—
  CULTURE, MEDIA AND SPORT (MILLENNIUM EXPERIENCE)

    Corporate Sponsors
    Mr. Eric Forth: If he will list the corporate sponsors of the millennium dome. [65225]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): Last November, the New Millennium Experience Company announced confirmed sponsorship of £120 million from Tesco, Manpower, BT, BSkyB, Marks and Spencer, Boots the Chemist, McDonald's, British Airways, GEC, British Aerospace, the Corporation of London, British Airports Authority and Camelot. In addition, Thames Water is funding the innovative grey water recycling facility at the dome. That is a fantastic achievement in anyone's books.
    Mr. Forth: I welcome the Minister to this aspect of her responsibilities and thank her for her answer, which already shows an openness that we had come not to expect from her predecessor. May I urge her to go yet further and confirm that, henceforth, the secrecy that we came to expect—in retrospect, we can understand why it existed—will be swept aside, and she will share with the House and the country all aspects of the financing of the dome project, so that we can see that there is nothing hidden, nothing secret and nothing to be ashamed of, and, most importantly, that all the sponsorship is absolutely clean and above board?
    Janet Anderson: We have always been very open about the project. I shall continue to be as open as my right hon. Friend the Member for Hartlepool (Mr. Mandelson), who always answered fully any questions raised in the House. The right hon. Gentleman would do his country better service if he would get behind the project and give it the support that it deserves.
    Mr. Andrew Reed: I welcome the list of sponsors. What sponsorship was in place when the Government took office in May 1997, and what would have happened to the dome if we had let that legacy stand? More importantly, what progress has been made on the spirit zone, and what sponsorship will be available to ensure that the dome celebrates the millennium in the way that was intended, as a religious festival marking 2,000 years since the birth of Christ?
    Janet Anderson: My hon. Friend has raised an important point. When the Government took over, no sponsorship whatever was in place. More than
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    £120 million of sponsorship has now been committed to the millennium experience and the New Millennium Experience Company is well on the way to reaching its £150 million target. Good progress has also been made on the spirit zone, both in design and construction and in raising the necessary sponsorship.
    Mr. Peter Ainsworth: I hope that you will forgive me, Madam Speaker, for remarking that this is an odd occasion: here we are at the butt end of Trade and Industry questions, and it is rather like an end-of-run panto in which the demon king, consumed in a puff of his own sulphur, has left the show for good.
    I warmly and sincerely welcome the Minister to her new role as fairy godmother to the project. I wish her well in answering questions on it, even though she is not responsible for the project. She obviously is not a former flatmate of the Prime Minister, as one has to be a crony to get a top job. Will she make a new start and undertake to be open, frank and honest in all her dealings concerning the project, and to give it to us warts and all? Will she begin by telling us how many of the zones still have to be fully sponsored?
    Janet Anderson: I say to the hon. Gentleman, as I said to the right hon. Member for Bromley and Chislehurst (Mr. Forth), that I wish that Conservative Members would get behind this unique national project. This country is rapidly becoming recognised internationally as the country of the millennium. Raising £150 million of private sector sponsorship is a considerable challenge, but no one has ever before decided to stage such a unique national event. I remind the hon. Member for East Surrey (Mr. Ainsworth) that, when this Government took office, the previous Government had not raised one penny of private sector sponsorship for the project.

    Mind Zone
    Mr. Tony McWalter: What plans he has for the Millennium Experience to celebrate the human capacity to think. [65226]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): The mind zone, one of fourteen exhibits in the millennium experience dome, will celebrate the unique creativity of the human brain by exploring the nature of our senses and perceptions through traditional art and advanced technology.
    Mr. McWalter: I thank my hon. Friend for that answer and express my pleasure in welcoming her to her new duties. I am a member of the National Committee for Philosophy, a post which naturally carries no remuneration. Those functions that require recognition, such as the contribution that philosophers have made to our culture in the past thousand years, may be left out because some bodies are unable to get the high levels of sponsorship that will be needed to obtain space in the dome. Will my hon. Friend be receptive to representations

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    from professions such as philosophers and others to ensure that the contribution made by such people to our culture is given full expression in the dome, and that the dome is not a dumb dome, as some have suggested that it might be?
    Janet Anderson: I reassure my hon. Friend that we are well aware of his expertise in this area and proud to have him as a colleague. We are always willing to meet anyone who has an interest in the dome. The mind zone will show how medical imaging technology allows us to follow the response of our brains to sensory input. Visitors will interact with advanced, intelligent robots in the robot zoo and enjoy a specially commissioned film showing images that challenge the very limits of our senses.
    Mrs. Virginia Bottomley: Is the hon. Lady aware that so much of the thought of the past millennium, and the creativity and achievements of people around the world, has been inspired by the Christian faith? In spite of her earlier and welcome answer, is she aware that many people feel that the millennium dome has been hijacked by new Labour to act as a party political launch pad, including much of the language and imagery? It is essential, when she advises her noble Friend who has taken responsibility for the millennium experience, that she tells him that the dome is not a party political launch pad but a celebration of the achievements of our nation in the past millennium while looking forward to the future.
    Janet Anderson: I assure the right hon. Lady that we have never attempted to make the dome a party political launch pad. Indeed, my right hon. Friend the Secretary of State, at a well-attended event held yesterday to explain what we are doing for the millennium, made it plain that the project was started by the Conservatives. If the right hon. Lady wishes to make cheap political points, I remind her that her right hon. Friend, Michael Heseltine—[Interruption.] I am sorry, I mean the right hon. Member for Henley (Mr. Heseltine). He has been involved in the project from the start. I hope that the right hon. Lady will get behind this unique national project, which is recognised internationally as a symbol of the millennium. She should give it her full support.

    Dome (Maintenance Costs)
    Mr. Gordon Prentice: What is the estimated annual cost of maintaining the fabric and structure of the dome. [65227]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): The New Millennium Experience company estimates that the cost of necessary maintenance inspection work on the dome fabric and structure during 2000 to be about £30,000. Such regular inspections will help keep maintenance costs to a minimum.
    Mr. Prentice: I warmly congratulate my hon. Friend on taking up her new and challenging responsibilities. May I remind her that, although it seems like only yesterday, it was two months ago that the right hon. Member for Hartlepool (Mr. Mandelson) told us the dome would be with us for a quarter of a century?
    Mr. Eric Forth: Well, he wasn't!
    Mr. Prentice: I was not responsible for scripting that.
    My hon. Friend has told us that £30,000 will be spent on the upkeep of the dome during 2000. Would it not be a good idea to spend a little more on the extra bit of paint that might extend the design life of the dome beyond 25 years, taking, perhaps, the Eiffel tower as an inspiration for what can be done?
    Janet Anderson: I thank my hon. Friend for his question and for taking the issue seriously, unlike Opposition Members. The lifetime of the dome's roof is estimated at 25 years, which is one reason why there is that cut-off. However, as the Prime Minister has said, the dome is too good to pull down, and we want to find a fitting use for it beyond 2000. The Deputy Prime Minister's Department is responsible for English Partnerships, and he has asked officials to work out proposals for the best mechanism by which to encourage and assess expressions of interest, including a timetable and criteria against which bids may be judged.

Business of the House
12.32 pm
Sir George Young: May I ask the Leader of the House to give us the business 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 25 JANUARY—Second Reading of the Sexual Offences (Amendment) Bill.
TUESDAY 26 JANUARY—Second Reading of the Tax Credits Bill.
WEDNESDAY 27 JANUARY—Until 2 o'clock, there will be debates on the motion for the Adjournment of the House.
Opposition Day [4th Allotted Day].
Until about 7 o'clock, there will be a debate on Terrorist Mutilations in Northern Ireland. Followed by a debate on the London Underground. Both debates will arise on opposition motions.
THURSDAY 28 JANUARY—Motions on The Social Security Benefits Up-rating Order, The Social Security (Contributions) (Re-rating and National Insurance Fund Payments) Order and the Guaranteed Minimum Pensions Increase Order.
FRIDAY 29 JANUARY—The House will not be sitting. The provisional business for the following week will be as follows:
MONDAY 1 FEBRUARY—Second Reading of the House of Lords Bill.
TUESDAY 2 FEBRUARY—Conclusion of Second reading of the House of Lords Bill.
WEDNESDAY 3 FEBRUARY—Until 2 o'clock there will be debates on the motion for the Adjournment of the House.
Opposition day [5th Allotted Day].
There will be a debate on an Opposition motion. Subject to be announced.
THURSDAY 4 FEBRUARY—MOtiOn on the Police Grant Report (England and Wales).
Motions on the English Revenue support Grant Reports.
FRIDAY 5 FEBRUARY—The House will not be sitting.
Sir George Young: The House is grateful for the business for next week, and for an indication of the business for the following week.
On the House of Lords Bill, may I ask—I hope for the last time—that the Government respect the convention that all the Committee stage of that constitutional Bill will be taken on the Floor of the House? The right hon. Lady has come to the altar on that point, but she has not yet said yes. Will she also explain who will answer parliamentary questions on constitutional issues, and when? May we have a debate, in Government time, on the White Paper published yesterday?
The right hon. Lady has announced a debate on the police grant for England and Wales, and she will be aware of widespread concern about the level of provision. Will she assure the House that we may have a full three-hour debate on that subject?
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Can the right hon. Lady give the House the date for the Budget?
Can the right hon. Lady tell us the position on the constituency week in February, the notional date for which is fast approaching?
Finally, the right hon. Lady has announced two Opposition day debates. If one so-called Opposition party both deepens and broadens its co-operation with the Government—and there are more and more areas on which that party is in effect part of the Government—is it not time to reallocate Opposition days to a party that is not compromised in that way, and which will oppose the Government without pulling its punches?
Mrs. Beckett: The right hon. Gentleman asks me about House of Lords reform. I can now give him an answer about the handling of the Bill, although I was not willing to do so before. The short and simple nature of the Bill enables me to say that we will take all of it on the Floor of the House, which will be for the convenience of the House.
The right hon. Gentleman should know that views differ in the House as to whether we are required to take all the Committee stages of all such Bills on the Floor, but this is such a short and simple measure that we certainly accept that it is for the convenience of the House to do so, although, for example, we thought it right to split the Greater London Authority Bill.
The Minister with responsibility for constitutional issues will answer questions on those issues, which means me on questions of House of Lords reform. As to when, it will be at the appropriate time. The right hon. Gentleman asked for a debate on the White Paper as such. As the House will appreciate, I have just announced a two-day Second Reading debate. Subject to the views of the Chair, some of those issues might well be raised then and we will certainly discuss the matter through the usual channels if it is thought that it needs to be considered further.
Similarly, the right hon. Gentleman asked for a longer debate on the police support grant and on various other issues. Again, that is a matter for discussion through the usual channels. I am not unfavourable to the idea of giving greater time to the police support grant debate and we can consider it. I cannot give him a date for the Budget—I will do so as soon as I can—nor can I add to what I told him about the constituency week in February. I understood his final remarks about Opposition days to be an opening in a general passage of arms about political matters, not a serious application to change such days.
Mr. Dale Campbell-Savours: Has there been any progress on the debate that I have been calling for on the treatment by National Westminster bank of its customers, in particular the Tanning Shop franchisee customers? Is my right hon. Friend in a position to join me in asking the Chairmen of the Select Committees on Treasury and on Trade and Industry to take evidence in joint session from the management of that bank—in particular, Mr. Robert Munn and Mr. Peter Stern, who know the truth about how shabbily NatWest has treated many of its customers nationally?
Mrs. Beckett: I cannot accede to my hon. Friend's request for a debate, although he is right to say that he

1023
has raised the matter on a number of occasions. He will know that the Chancellor of the Exchequer announced a review of banking services in the pre-Budget report. My hon. Friend raises a particular case on behalf of his constituents and asks me to invite the Chairmen of two of our Select Committees—Treasury and Trade and Industry—to have a joint session on the matter. With the greatest possible respect, it is not for me to set the agenda for Select Committees. However, I am confident that if he contacts my hon. Friends who hold those posts, they will give him a sympathetic hearing.
Mr. Paul Tyler: May I suggest to the Leader of the House that it would be somewhat bizarre if we could not extend the debate on the House of Lords Bill to wider consideration of House of Lords reform? I hope that that will be possible. Perhaps some discussions can take place through the usual channels to ensure that it is. Clearly, since all parties want the Bill to be a first step towards more comprehensive reform, it would be extraordinary if we were prevented from having such a discussion.
Is it the present intention of the Government in due course to put the fuller proposals for reform of the House of Lords to the people in a referendum? Do they intend to do so in this Parliament, if that can be achieved? Does the right hon. Lady agree that it would be curious if the House of Lords were subjected to effective reforms that made it more accountable, democratic and representative, but the House of Commons were not given that opportunity at the same time?
Mrs. Beckett: First, the hon. Gentleman asked me to give an indication of the handling of the debate. I was somewhat cautious in my response to the right hon. Member for North-West Hampshire (Sir G. Young) earlier. The Government have provided time for a two-day debate, thus facilitating a very full debate which we hope will enable hon. Members to air several matters. The hon. Gentleman will appreciate that I am in no way seeking to fetter the discretion of the Chair in the difficult decisions that must be made.
The hon. Gentleman asked whether it was our intention to have a referendum, perhaps in this Parliament. We are in no way at the stage of announcing such conclusions to the House. On reflection he will probably agree that there may be a creative tension between those who want to see speedy progress on this matter and those who wish to insert a referendum into the process, since that in itself would have a legislative requirement, apart from any other.
Finally, the hon. Gentleman said that the outcome of the process might be to make the House of Lords more democratic and representative than this Chamber. I do not for a second accept that that could possibly be the outcome. It certainly could make the second Chamber have some tenuous link with democracy and representation of a kind that it certainly lacks now. If, however, his remarks were a reference to a perceived lack of legitimacy of this House because of our electoral system, that is not a view I share.
Several hon. Members rose—
Madam Speaker: Order. After hearing the last two questions put to the Leader of the House I must remind
1024
hon. Members that we are asking about the business for next week. The use of this period is deteriorating and I take the opportunity of putting it on record that business questions must relate to next week's business. It is not an occasion to make long comments about personal or constituency cases. Nor should matters be raised that relate to the right hon. Lady's ministerial responsibilities as President of the Council, for which a separate question period is set aside. Hon. Members will be aware of that. Today, I expect brisk questions relating directly to next week's business. I know that I shall also get short responses from the Leader of the House, who is sympathetic to my approach on this matter.
Ms Joan Walley: In view both of the publication today of the House of Lords Select Committee report and of next week's business on the future of the House of Lords, can my right hon. Friend tell the House whether there will be an early opportunity to discuss genetically modified foods, particularly given the concerns of those who wish to have the choice not to buy GM foods?
Mrs. Beckett: I welcome the Select Committee's report as a useful contribution to the debate. Not everyone will agree with it and I am not committing myself about the attitude that the Government will take. I am simply saying that anything that contributes to the debate is welcome. I fear that I cannot promise my hon. Friend an early debate on this matter, but we shall take her request into account.
Mr. Alan Clark: Will the right hon. Lady confirm that it is not too late to put into next week's business an urgent debate on the corruption of EC Commissioners? Her right hon. Friend the Prime Minister dismisses any criticism of the EC Commission by attributing to those who make it a desire to pull out of the whole show immediately, but enormous sums of taxpayers' money have been misappropriated by individual commissioners, in particular by the French commissioner Madame Cresson. It is to be hoped that in such a debate right hon. and hon. Members on both sides of the House would be rather less docile than those who followed the instructions of the Prime Minister in the European Parliament last week.
Mrs. Beckett: I fear I cannot undertake to find time for a debate on that matter in the near future. Nor do I share the right hon. Gentleman's rationale for having such a debate. My perception is that the European Parliament and, indeed, representatives from many parties in that Parliament have expressed great concern and taken a tough line on fraud. Certainly this Government have done so. Those representatives emerge from last week's events with a strengthened means of scrutiny. I do not doubt that they will use those means and, if necessary, return to the subject.
Mr. Tam Dalyell: In view of Monday's Adjournment debate on sanctions against Iraq and Tuesday's ten-minute Bill on parliamentary approval of military strikes, could a Minister see Denis Halliday, the former United Nations co-ordinator, who happens to be in Britain on Tuesday? He resigned his job on principle because he disagreed with the policy on Baghdad.
Mrs. Beckett: I understand that my hon. Friend the Member for Glasgow, Kelvin (Mr. Galloway) has invited

1025
all hon. Members to a meeting with Mr. Halliday on 26 January. I cannot know at this moment whether any of my ministerial colleagues will be able to meet him, but my hon. Friend is a classic example of how a Member's assiduity can obtain opportunities for debate on the Floor.
Mr. Eric Forth: Does the Leader of the House accept that the announced departure of the leader of the Liberal party, which causes us all such sadness, gives the House an opportunity urgently to consider the anomalous position, largely created by him, whereby he was attempting to be at the same time part of the Government and part of the Opposition? Is she aware that that is causing concern not only among Opposition Members but among senior Labour figures? Will she provide time in next week's business to sort the matter out once and for all and decide whether the Liberal Democrats are part of the Government or a serious Opposition party?
Mrs. Beckett: If I were a Conservative, I would be cautious about making remarks about a serious Opposition party, because if the Conservatives were judged on performance, they might find themselves in some difficulty. It is not the act of a serious Opposition Member of any party to veto private Members' Bills through frivolous activity, as the right hon. Gentleman did in the previous Session. I cannot undertake to find time for a debate on the private affairs of any political party, no matter how dear the subject may be to the heart of many Members.
Mr. Keith Vaz: Will the Leader of the House find time next week for a debate on the position of the textile industry, following the announcement by the American Government that tariffs are to be imposed on textiles produced in Britain for import to America? Is not that an important subject for debate next week?
Mrs. Beckett: I understand my hon. Friend's concern, which I know is shared. I fear that I cannot undertake to find time for a special debate next week, other than the one that is taking place on Wednesday morning.
Mr. John Hayes: Will the Leader of the House pay attention to early-day motion 188, on the EU Commission, which requires urgent debate next week?
[That this House deplores the failure of Socialist MEPs to support measures to protect taxpayers' money from fraud, preferring instead to protect members of the EU Commission accused of fraud and nepotism; and applauds the efforts of Conservative MEPs to hold certain Commissioners to account on behalf of the taxpayers of Europe.]
Further to the question of my right hon. Friend the Member for Kensington and Chelsea (Mr. Clark), I hope that the right hon. Lady will also pay attention in planning next week's business to the widespread public disgust at the behaviour of 52 Labour Members of the European Parliament who did not have the courage of their convictions in pursuing their own motion. Would not that
1026
debate allow the Government to confirm that the behaviour of Edith Cresson does not accord with what we would expect of one of our Ministers?
Mrs. Beckett: I repeat that I will not be able to find time for a debate on that matter; nor do I share the hon. Gentleman's view of the premise for such a debate. There is a reform plan. We utterly condemn, as anyone must, any suggestion of fraud, corruption or incompetence and have supported measures to deal with them. As for the attempt to pretend that what happened resulted solely from the actions of Labour representatives in the European Parliament, he should know that members of his party saw the sense of our representatives' actions and voted with them.
Mr. Harry Barnes: The Prime Minister would like people to become middle class, which is difficult for those who do not have a job, house or, in some cases, a vote. The homeless normally fall into all three categories. Can we therefore have a debate next week on homelessness and particularly on the inability of the homeless to vote? That ability could be delivered quickly to homeless people, even though it is more difficult to achieve jobs and houses.
Mrs. Beckett: I certainly know of my hon. Friend's long campaign to encourage people to ensure that they have the opportunity to exercise their voting rights. It is a campaign that every hon. Member from every party should support. I appreciate that one of the effects of being homeless, among other damaging effects, is that someone can be disfranchised.
I hope that my hon. Friend is aware that my right hon. Friend the Home Secretary currently has these matters under review. I think that the remarks made by my right hon. Friend the Prime Minister have been to some extent misreported. He is saying that we ought to move further and further away from seeing barriers of class as a barrier to advancement. I hope that all hon. Members support that.
Mr. Peter Luff: Will the Leader of the House find time for an early debate on the defence industry? I am sure that she will understand that, as a Member of Parliament for a significant British Aerospace factory in a sector undergoing rapid restructuring, I was deeply concerned by the Prime Minister's comments yesterday at Question Time, in which he seemed to suggest that he would give primacy to European rather than British interests in the restructuring of the defence industry. Such a debate would enable Opposition Members to express their deep concern at the implications of that approach.
Mrs. Beckett: I am afraid that I cannot find time next week for a debate on the defence industry. Nor do I share the hon. Gentleman's view that the Prime Minister said anything yesterday that caused the need for such a debate. My right hon. Friend perfectly properly takes a robust attitude to the defence of Britain's armed forces and to their exercising the role to which their professionalism and skill entitle them in international deliberations and events.
Mr. Ted Rowlands: Will my right hon. Friend—[Interruption.] Will my right

1027
hon. Friend reconsider next week's business to include a whole day's debate on the transfer of functions order for the National Assembly for Wales? It is a document of enormous constitutional significance. The corresponding functions were transferred to Scotland by means of a schedule to the Scotland Bill and were therefore subject to scrutiny. Will my right hon. Friend give us an assurance that there will be proper scrutiny of the order and a full debate on it?
Mrs. Beckett: I am afraid that I cannot undertake to give my hon. Friend such a day's debate in the near future. He raises some matters of considerable importance, and I undertake to draw his remarks to the attention of my right hon. Friends.
Mr. Andrew Lansley: The right hon. Lady has said that she cannot now announce the date of the Budget, but will she say that she is seeking an early date from the Chancellor of the Exchequer? She will know that yesterday's figures from a survey of independent forecasters predicted 0.6 per cent. growth in the United Kingdom this year compared to the Budget forecast of up to 1.5 per cent. So a central part of the pre-Budget report has been proved wrong already and it is urgent that the Chancellor come forward with a new economic forecast at an early date.
Mrs. Beckett: I am afraid that I am still not in a position to give the hon. Gentleman a date for the Budget. Nor is it part of my role to press for an early Budget. The timing of the Budget is a matter for consideration by the Government as a whole, and especially the Chancellor.
Nor does the case that the hon. Gentleman makes provide the justification for an early Budget. My right hon. Friend the Prime Minister dealt with the point yesterday. One of the ways in which the Conservative party is making itself faintly ridiculous is, in the light of what happened not only in Asia and subsequently in Russia but in Brazil, to pretend that the Government are causing any problems that might beset the British economy.
Mr. John Cryer: May we have a debate or at least a statement next week on the new guidelines issued on education action zones? The new guidelines are specifically designed to make it easier for businesses to take over and lead the zones, which presents the fairly nauseating prospect of companies such as McDonald's or the Edison project taking over the powers of local education authorities.
Mrs. Beckett: I am afraid that I cannot provide time for an early debate on the matter. I understand the concerns that my hon. Friend raises about the guidelines. I feel confident that he will have a number of opportunities to raise those concerns. There are a number of examples of businesses with a strong local presence becoming involved and contributing to the local education system, and most hon. Members would not object to that.
Mr. Robert Syms: Can the Leader of the House find time for a debate next week on the 175th anniversary of the Royal National Lifeboat Institution? Hon. Members on both sides of the House would like the opportunity to discuss the institution's
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good work. It is based on public subscription and is not funded by the taxpayer. It saves many lives in the seas around this country and southern Ireland. The headquarters are in Poole, and those of us with coastal constituencies would like an opportunity next week to express our appreciation for the good work that the institution does.
Mrs. Beckett: I am sure that the whole House shares the hon. Gentleman's words of commendation for the RNLI's work. I am sorry that I cannot find time for a debate next week. Had we had a little more notice, we might have looked for an opportunity to press for the matter to be touched on in some way. The whole House shares the congratulations and encouragement that the hon. Gentleman has offered. Perhaps there is no need for a debate and we can simply record our thanks and congratulations.
Mr. David Chaytor: In view of last week's decision by the new German Government to terminate their nuclear reprocessing contract with British Nuclear Fuels, the subsequent ministerial meetings this week, and the traditional culture of secrecy that surrounds all matters of nuclear power in this country, does my right hon. Friend agree that next week is the right time to debate the implications for the nuclear industry of the current question mark over reprocessing?
Mrs. Beckett: I can understand the concern that lies behind my hon. Friend's question and why he is pressing for an urgent debate. When a matter arises which clearly raises serious issues, it is always difficult to know when to press for a debate on it. I certainly cannot find time for one next week. Matters might not yet be sufficiently resolved for there to be as constructive a debate as my hon. Friend would wish. I feel confident, however, that he will use any opportunities available to him to continue to press the matter.
Mr. Ian Bruce: Will the right hon. Lady use her ingenuity to fit into next week's debate on the social security uprating the issue of long-term unemployment? The problem is that the long-term unemployed are claiming a lot of social security benefits. I have written to the Prime Minister pointing out that, despite the 70,000 people who are supposed to have got into some sort of scheme or back to work through the new deal, the long-term unemployment statistics published by the Government show that the number of unemployed 18 to 24-year-olds remains static, and the number of long-term unemployed whom the new deal is supposedly helping has risen by 46 per cent. in one category. The matter is of great urgency to all hon. Members and should be dealt with urgently.
Mrs. Beckett: I remind the hon. Gentleman that it is not for me to use my ingenuity to fit other issues into next week's debate; rather, it is for hon. Members to use their ingenuity, subject to the generosity of the Chair. The hon. Gentleman quotes figures on the unemployment record and some categories of unemployed. I must admit that I am not familiar with them, so I am not in a position to query them. My understanding of the overall position, on

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which I have seen a great many figures, is that it is steadily improving, although not, of course, as fast as all hon. Members would like.
Mr. John McDonnell: My right hon. Friend has announced a debate on transport in London next week. Can that be extended to include security at Heathrow airport in the light of yesterday's reports of further lapses in security? This is the third time in the past decade that lapses in security have been exposed. They put at risk not only my constituents but the whole travelling public.
Mrs. Beckett: My hon. Friend is entirely right to say that this matter has occurred before, as all hon. Members will recall. The Deputy Prime Minister has ordered an immediate and full investigation. He has also made it plain that tough action will be taken if security is breached, and that there will be a wider check of security procedures at other airports. However, although my hon. Friend is welcome to try, I suspect that it might test the Chair if he were he to attempt to work that matter into a debate on London Underground—unless he can tie it to Heathrow station.
Madam Speaker: Which I do not think the hon. Gentleman would be able to do.
Mr. Owen Paterson: May we have a debate on the Government's energy policy? Commitments on Kyoto and on achieving the cheapest price of electricity possible for each consumer, and commitments to the Government's friends in the mining industry have, according to reports in The Times yesterday, run slap-bang into another policy dear to the Government's heart: the working time directive. Such a debate would allow the right hon. Lady's successor at the Department of Trade and Industry, the right hon. Member for Hartlepool (Mr. Mandelson), who is just leaving the Chamber, to explain the policies that he put into practice.
Mrs. Beckett: I do not accept that there is a difficulty. The implementation of policy is always a balancing act. I also do not accept—nor, I am sure, does my right hon. Friend—that there is an inherent contradiction in the Government's approach to these matters. I fear that I cannot find time for a debate on the issue in the near future.
Mr. Geraint Davies: Can my right hon. Friend find time next week for an urgent debate on the London fire service and its funding? The service is threatened because of the budgetary crisis. In New Addington in Croydon it serves an isolated community with many young families and a history of fires. There have been cases of arson in local schools and in a local chemical factory. There is great concern, so can she consider finding time for such a debate?
Mrs. Beckett: I fear that I cannot find time next week for a debate specifically on the fire service, but my hon. Friend will have noted that there is to be a debate on English revenue support grant orders the following week. He may be able to work it into that.
Mr. John Bercow: May we have an early statement to clarify the Government's intentions on
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the handling of the Second Reading debate on the Bill to reform the House of Lords? Yesterday afternoon, the Leader of the House invoked the precedent of Dick Crossman in November 1968 to justify the fact that she, rather than her right hon. Friend the Prime Minister, was making the statement on reform. Is she aware that, in the instance to which she referred during the last major legislation to reform the House of Lords, the Second Reading debate on the Bill was opened by the then Prime Minister, Harold Wilson? In view of her admirable respect for precedent, will she guarantee that the Second Reading debate next Wednesday will be opened by the Prime Minister?
Mrs. Beckett: One should always respect precedent, but not necessarily be bound by it. In our exchanges yesterday, I was correcting misinformation given to the hon. Member for Woodspring (Dr. Fox), who I am sure did not intend to mislead the House when he referred to other precedents. It is 30 years since that debate was instigated by the then Prime Minister.
There are a variety of precedents concerning who has spoken in debates on this and other constitution reforms. If the hon. Member for Buckingham (Mr. Bercow) has looked at the record, he will know that in those days matters were handled differently between Prime Ministers and departmental Ministers. Most of the subsequent changes were introduced during the premiership of Baroness Thatcher, who now sits in the House of Lords. The hon. Gentleman is a great admirer of hers, so I am sure that he would not wish us to discard those precedents.
Mr. Ben Bradshaw: Will my right hon. Friend find time next week for a debate on the timing and details of the implementation of the recommendations of the Jenkins commission? This has been official Labour party policy since the time of the late John Smith, and it would give the Government a chance to show that they are in the business of honouring their manifesto promises.
Mrs. Beckett: As my hon. Friend will be aware, we are indeed in the business of honouring our manifesto promises. It is entirely possible that there will be a referendum on this matter before the end of this Parliament. I fear, however, that it will not be in this Session, so I cannot find time for a debate next week.
Dr. Julian Lewis: Will the Leader of the House at least try to prevail on the Prime Minister to come to the House next week and make a statement on the recent announcement that the leader of the Liberal Democrats is to retire—and, in particular, tell us whether that retirement signifies the welcome demise of plots to replace our successful first-past-the-post electoral system with the outrageously undemocratic system of proportional representation, which has given the Green party in Germany control of the Foreign Ministry on the basis of less than 7 per cent. of electoral support?
Mrs. Beckett: I fear that I could not possibly encourage my right hon. Friend to come to the House to comment on the political affairs of another party. Indeed, I am sure that he would refuse to do so. As for the hon. Gentleman's other comments, no doubt we shall return to those matters during the months ahead.
Mr. William Ross: In your statement earlier today, Madam Speaker, you said that

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business questions should relate solely to next week's business. Nowadays, business for the next two weeks is always announced, although the business for the second week is provisional. Do you intend to bar all questions about business for the second week?
Madam Speaker: No. My point is that Members should refer to business that is before us—business for next week, or for the week after. At present, Members are asking the Leader of the House questions that do not relate to business at all. That has been the habit in recent times. I am anxious for Members to discuss the business for the next week and for the week after, if the Leader of the House has announced it.
Sir Patrick Cormack: Will the right hon. Lady confirm that, during the debate on the House of Lords reform Bill, a Minister will open and close the debate on each day? Is that the intention? Will the right hon. Lady also try to ensure that the point about the White Paper is clarified in next week's business statement, so that we know whether we are debating just the Bill or both topics?
May I raise an important matter that relates directly to constitutional business? Will the right hon. Lady make a statement next week about the Government's intentions on the taking of questions on constitutional matters, which are at the forefront of their legislative programme? At present, in her capacity as Lord President, the right hon. Lady answers questions only once a month, sharing a quarter of an hour with the House of Commons Commission and sometimes being given less than 10 minutes. I am sure she agrees that is wholly inadequate for such a crucial issue. Can the Order Paper be rearranged; and will the right hon. Lady announce her intentions to the House so that constitutional questions are properly dealt with?
Mrs. Beckett: The hon. Gentleman asked me about the handling of a debate. All the matters that he raised can be examined through the usual channels. It is entirely possible that the debate will be opened and closed each day by a Minister, but if it is thought convenient to the
1032
House for fewer Front-Bench speeches to be made, that too can be considered. No firm conclusions have been reached, but the matter can be cleared up through the usual channels. The same applies to discussing the White Paper in the context of the debate.
I am grateful to the hon. Gentleman for his follow-up question. I was slightly puzzled as to what his right hon. Friend the Member for North-West Hampshire (Sir G. Young) was getting at, but I understand now. Speaking off the cuff, I do not think it necessary for us to seek so much more time for questions on constitutional matters—I feel that the present structure provides enough opportunities for such matters to be raised if that is considered necessary—but I shall undertake to look at the matter again; it, too, can be considered through the usual channels.
Mr. Clive Efford: My right hon. Friend will know that the report on events following the murder of Stephen Lawrence may well be handed to the Home Secretary next week, or during the following week. The issue has implications for policing in London and in the country as a whole, and also for race relations. If the report is handed to the Home Secretary next week, will my right hon. Friend allow the fullest possible time for a debate, given the amount of concern expressed by several Members on both sides of the House?
Mrs. Beckett: My hon. Friend is right that there is great concern among hon. Members on both sides of the House about that matter. I was not aware that the report might be with my right hon. Friend the Home Secretary as early as my hon. Friend suggests, but I will draw his remarks to my right hon. Friend's attention.
I know that my hon. Friend will appreciate, as I am sure the whole House will, that it is a matter for consideration as to whether my right hon. Friend will wish to encourage a debate very early when the report has just been received and there has not been much time to consider it, or think it better to have the debate a little later when there has been more time to come to a mature view. Those are matters on which there is merit on both sides. As I say, I undertake to ensure that they are given consideration.

Points of Order
1.10 pm
Sir David Model: On a point of order, Madam Speaker. I wonder whether you could help Back-Bench Members. Last Thursday, we only got to Question 13. Today, we only got to Question 10, because we had long rambling questions and long rambling answers from those on the Treasury Bench.
Do you agree, Madam Speaker, that a good example could be set to the House? If Ministers do not know the answer to a question, instead of giving a long answer, which offers us every form of assistance short of help, they should do as Mr. Attlee would have done and simply say, "That is an interesting point. I will make a note of it." We could then get on to the next question. Progress is incredibly slow in the House, which is extremely frustrating to those of us on the humble Back Benches.
Madam Speaker: The hon. Gentleman is absolutely correct. I am very concerned about the lack of progress at Question Time. He and others will recall that I have made more than one statement about that in the hope of guiding Members.
I watch the progress of questions and answers; I not only listen to them daily, but regularly look at the number of questions asked and answers given. I speak to those responsible because I am extremely concerned that many Back Benchers do not get an opportunity to ask their questions because they are not reached.
There are two reasons why we are not making progress. One is the length of answers given by Ministers at the Dispatch Box; the other is the length of questions from Opposition Front-Bench Members, as well as from all Back-Bench Members. I do not wish to embarrass Members by intervening too often, but I am going to have to when Members stand and give a long preamble before
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they actually come to the question. I reiterate that I am also concerned about long ministerial answers. I have also taken that up with those responsible.
Since the House came back in November, the position has deteriorated even more. Only this week, I have been working on the matter with those concerned in the hope that we shall make better progress. I am keen to support Back Benchers when they take the trouble to table questions to ensure that as many as possible are able to be called to ask them.
Mr. Geraint Davies: On a point of order, Madam Speaker. Yesterday, the hon. Member for Croydon, South (Mr. Ottaway) raised a point of order in which he asked me to come to the House to apologise because I had suggested to the House that the 1983 Conservative manifesto did not contain a commitment to abolish the Greater London council. However, I had made no such statement. The previous day, I had asked the hon. Member for Croydon, South whether he would apologise if he found that the Conservative manifesto did not contain such an undertaking. I should like to put that correction on the record. I also suggest that the hon. Gentleman's point of order was an abuse of that procedure.
Madam Speaker: That seems to have sorted the record out, but I hope that the hon. Gentleman gave notice to the hon. Member for Croydon, South (Mr. Ottaway) that he was raising the matter today. It is usual to do so.
Mr. John Bercow: Did you?
Mr. Davies: No, I did not. [HON. MEMBERS: "Disgraceful."] The hon. Member for Croydon, South did not give—
Madam Speaker: Order. I think that the matter has probably been resolved, but it is usual to give notice when invoking another Member in such an issue.

Orders of the Day
  Road Traffic (NHS Charges) Bill
  As amended (in the Standing Committee), considered.
  Road Traffic (NHS Charges) Bill
    New clause 1

      ABOLITION OF EMERGENCY TREATMENT FEE
      '.—Section 158 of the Road Traffic Act 1988 (Payment for emergency treatment of traffic casualties) shall cease to have effect.'.—[Dr. Harris.]
      Brought up, and read the First time.
      1.14 pm
      Dr. Evan Harris: I beg to move, That the clause be read a Second time.
      In previous debates on the Bill, we have heard the Government boast of the abolition of the emergency treatment fee as it applies to hospitals. The Liberal Democrats strongly support that on the basis that the fee was bureaucratic and on the basis of the Government's further justifications for the move, which are that it is offensive to patients arriving in hospital to be asked to pay a fee and that the amount raised does not compensate for the bureaucratic nightmare of collecting it.
      The Bill, in its current form, is inadequate because it does not remove the emergency treatment fee as chargeable by general practitioners. Liberal Democrats see hardly any difference between the bureaucracy involved in collecting the general practitioner emergency treatment fee and that involved in collecting the hospital emergency treatment fee. There is also very little difference between the difficulties of approaching people who may have been injured in an accident, albeit always the driver in the case of the GP fee, and patients arriving in hospital for treatment following a road traffic accident. There is certainly no difference in the lack of information about whether it is worth while for the fee to be collected by front-line health service staff.
      I wonder whether the Government, even at this late stage, will consider accepting the new clause on the basis that it fits in with the rationale of their original motives in the Bill.
      The Parliamentary Under-Secretary of State for Health (Mr. John Hutton): As I understand it, the hon. Gentleman is seeking to remove the right of independent contractors—GPs—to claim the emergency treatment fee. Has the hon. Gentleman sought the views of the British Medical Association on this matter and what opinion has it expressed to him?
      Dr. Harris: I intend to deal with those points during my presentation of the rationale behind this new clause.
      Two questions need to be answered by those proposing the new clause. First, should GPs receive a fee for the treatment given and, secondly, if they do, should that come direct from an individual patient? General practitioners receive a fee for giving contraceptive advice. That fee comes not from the person to whom they have given the advice but from the health authority and it is in addition to their capitation fee. They are also rewarded
      1036
      for meeting screening targets. The normal way for GPs to be reimbursed, other than through their capitation fee, is through an item-of-service claim.
      General practitioners are used to claiming from health authorities for specific items of service. Those proposing this new clause are not suggesting that GPs should not be reimbursed for their time, but that the current method is discriminatory because, in the first instance, GPs must approach a patient or even a third party for the fee. That does not fit in with the current arrangements for GP reimbursement. I can assure the Minister that, if an alternative mechanism of claiming for a GP's time and effort in a roadside attendance can be arranged through regulation, no GP need be out of pocket.
      In case the Minister is not aware of this, I shall remind him of the difficulties that GPs face currently when collecting the fee. I asked the BMA for its view on the collectability of the fee and, in the first instance, it could not find any GP who regularly made an effort to collect it. My hon. Friend the Member for Isle of Wight (Dr. Brand), who is a practising GP, although on a part-time basis because of his onerous parliamentary duties, said that during his time as a GP, he has never found it worth the effort to collect the fee. He said that he does know some people who do put in the effort, but they question whether it is worth while.
      If I explain the procedure that GPs have to follow to collect the fee, the House will begin to see why it is not worth retaining, even if there were not strong arguments for the principle being wrong. The BMA has produced a guidance sheet for GP members on the Road Traffic Act 1988 emergency treatment fee. Section 158 of that Act applies and that is what the new clause would abolish. The guidance says:
      "Under the Road Traffic Act 1988 doctors may generally claim a fee for providing emergency medical or surgical treatment to a person suffering bodily and/or fatal injury arising out of the use of a motor vehicle on a public highway.
      A fee of £21.30 may be claimed for rendering treatment to an individual involved in a road traffic accident; and a fee of 41p may be claimed for each complete mile and additional part of a mile for any distance in excess of two miles which a practitioner must travel in order to provide the emergency treatment.
      The payment may be claimed by any doctor whenever he or she is the first person to provide treatment.
      The person who is using the vehicle at the time the event occurred out of which the bodily injury arose is the person responsible for the payment of the practitioner's fee."
      We therefore have a situation in which GPs are approaching drivers of vehicles who may or may not have been injured—presumably they have survived—to ask for 41p per mile, perhaps after quickly hammering out the figures on a calculator. Such a situation is highly inappropriate, as the Government have recognised elsewhere in the Bill by abolishing the hospital emergency treatment fee.
      Mr. Andrew Dismore: The hon. Gentleman is making a mountain out of a molehill. As a personal injury solicitor, I have had to deal with cases on behalf of accident victims many times, and it was a straightforward matter. If a claim is made, the docket is passed to a solicitor, who will either pass it to the driver's insurers or claim it back from the other insurance company. It is a

      1037
      very straightforward process that is easily administered. Sometimes, the victim will pay out the fee and collect it back. I do not see what all the fuss is about.
      Dr. Harris: Lawyers involved in processes in which they are paid always claim that the process is smooth and easy. If the hon. Gentleman will be patient, I shall explain the advice that the BMA gives to its doctors on how to claim the fee, with or without the services of the legal profession. I should say that I know of no solicitor who would charge a lower fee. Perhaps the hon. Gentleman is particularly generous—which is why he is no longer practicing—in being prepared to do such work for less than the £21.30 plus 41p per complete mile in excess of two miles, assuming that a doctor is the first person to reach an accident. Another invidious principle is the requirement to work out who is the first doctor on the scene, and therefore who can claim the fee. If the hon. Gentleman is patient, I shall explain the process as GPs see it.
      The BMA advice continues:
      "Practitioners should take the following steps to recover their fees:
      (i) An oral request may be made to the person who was using the vehicle at the time of the occurrence which led to the provision of the emergency treatment."
      That presumes that the person is alive, conscious and able to hear such an oral request. I suspect that any GP who pauses at the scene of an accident to make such a request is being forced by the current regulations—if he or she is obeying them—to put secondary considerations before his or her duty of care to patients.
      The advice goes on to say that, if an oral request is not made,
      "A written request must be made to the above-defined person. This request must be served upon that person within seven days from when emergency treatment was given. It must be signed by the claimant, stating his name and address, the circumstances in which the emergency treatment was effected, and that the claimant was the first person to provide such emergency treatment. The request may be served by delivering it to the person who was using the vehicle, or by sending it by recorded delivery addressed to him/her at his/her usual or last-known address."
      The amount of administration that such a process involves for a GP, or for his or her staff, makes it not worth while to collect the fee. A greater consideration is the offence that might be caused to a person in hospital who receives such a request within seven days of an accident. Nothing could be better calculated to damage doctor-patient relationships.
      Mr. Dismore rose—
      Dr. Harris: Perhaps the hon. Gentleman will offer more legal advice.
      Mr. Dismore: It is all very well hearing about such situations in theory, but, in practice, such situations do not occur. A docket is sent in, and it is paid. What is all the fuss about? The BMA may have established a long and complicated procedure, but such situations are dealt with very differently in reality.
      Dr. Harris: I question that. I have asked the BMA what action GPs must take to collect the fee. I should prefer to
      1038
      believe the BMA and former colleagues of mine about the advice given by the BMA than to believe the advice of a solicitor who may or may not be involved in the case. It depends on whether GP practices have a contract with a local firm of solicitors.
      On many occasions, I have heard the Secretary of State call for less NHS time and money to be spent on legal fees and more on patient care. The interventions of the hon. Member for Hendon (Mr. Dismore) suggest that he would like that reversed and thinks that every GP should have a contract with a local firm of solicitors to maximise their income. That may be good for solicitors, but it is not good for general practitioners and it certainly is not good for patients, who, directly or indirectly, are on the receiving end of the demands for payment.
      The guidance given to doctors under existing legislation suggests that they must approach an accident victim within seven days of an accident to ask for the money. The £21.30 fee has not been raised since the introduction of the provision in 1988, but it is still a significant sum. The measure is highly regressive because it is a charge made to patients. It is offensive to them in principle and because of the time scale.
      The GP may well not know who the driver was. It is not the first question that a doctor at the scene of an accident asks and it may not even be the last. The guidance helpfully goes on to explain:
      "When a practitioner experiences difficulty in ascertaining the name and address of the person who was using the vehicle, s/he should make application to the appropriate chief constable."
      That is astonishing advice to give busy front-line staff. It continues:
      "In these circumstances this official is required by the Act to supply the practitioner with any information at his/her disposal as to the identification marks of any motor vehicle which the practitioner alleges to be a vehicle out of the use of which the bodily injury arose, and as to the identity and address of the person who was using it at that time."
      That is overly bureaucratic. It is a waste of time and energy for the front-line staff in the health service. Chief constables and their officers have better things to do than to chase £21.30 fees across counties, across police authorities and across the country to reimburse GPs for roadside advice given. I believe that in their heart of hearts, the Minister and the other Labour Member present—Labour Members, I should say, because I see the Whip as well—know that it is nonsense. It would be easier and more logical for them to accept the new clause. We should be happy to support them if they did. I hope to hear specific reasons from the Minister why that cannot be done.
      The BMA advice goes on:
      "The fees payable under the Act are recoverable by court proceedings as if they were a simple contract debt due from the person who was using the vehicle to the practitioner rendering service."
      That may be why lawyers are so interested in the retention of the measure. If no money comes forward, there is more work for solicitors.
      Mr. Dismore rose—
      Dr. Harris: If the hon. Gentleman does not mind, I shall let him make his comments when I have finished this point.

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      The guidance goes on:
      "However, in the event of a doctor being unable to obtain this fee, s/he may claim an ordinary 'Emergency Treatment Fee' from the relevant health authority (as covered by paragraph 33.8 of the Statement of fees and allowances)."
      That means that after the general practitioner has gone through all those hoops without making progress and all that time and money has been wasted, there is provision to claim an ordinary fee for treatment from the health authority, just as a GP would for a patient who was not on his list but needed urgent and necessary treatment. Surely the Government can accept the new clause and recognise that the usual way to provide for such a fee is for doctors to be able to claim it back from the health authority without going through such hoops.
      Mr. Dismore: The hon. Gentleman is not reflecting reality. He has had a few pot-shots at lawyers. No lawyer will ever get rich on this fee. In 20 years in practice, I have never known a GP sue a victim to get the money back. It is just an extra line to add to the column of calculations. I have never charged anyone for it and I do not know anyone who has.
      Dr. Harris: That adds to the force of my argument. No one benefits from the regulations. I was being charitable to the Government, who want to retain the charge, by supposing that there might be some group of professionals lobbying for the retention of the system. I do not blame GPs for wanting to retain the income, but they can do that through item-of-service claims from the health authority. If lawyers are not getting rich on it, patients find it offensive, GPs find it hardly worth the trouble and health authorities eventually have to pick up the tab, that is the definition of a bad law. Bad laws are repealed when a suitable legislative opportunity arises and the Minister must accept that this is such an opportunity. I am simply asking the Government to accept new clause 1, either here or in another place.
      1.30 pm
      Mr. Simon Hughes: Can my hon. Friend tell the House what percentage of the total revenue value is collected under present arrangements? Another argument in support of his proposition that a bad law is one that practically nobody uses is the fact that most people do not avail themselves of the legislation.
      Dr. Harris: I thank my hon. Friend for that intervention. Indeed, the hon. Member for Rutland and Melton (Mr. Duncan), who cannot be here today, asked that question in Committee. The Minister replied that he did not know how much money was collected and said that the
      "information.… is not collected centrally"
      and acknowledged that that was a familiar refrain. Many of us consider it to be a euphemism for saying that the information is not collected deliberately.
      If the Government were able to ascertain by means of a simple survey of a random sample the sum of money that was collected by GPs, I expect that they would find that it was precious little. I am sure that health authorities have accounts of how much they dole out under the emergency treatment provision, although the road traffic cases would have to be separated from the rest.
      1040
      I accept that the information is impossible to obtain, except by means of survey, but all the evidence so far suggests that it is hardly collected. Even if the fee were to raise a substantial sum, the Liberal Democrats would still consider it inappropriate. The fact that it offends patients and is a direct charge on drivers who may be patients for NHS care is sufficient reason for that charge to be abolished, just as the Government propose to abolish the hospital emergency treatment fee.
      The Minister said in Committee:
      "we are removing the right of NHS hospitals to collect the emergency treatment fee. It is right that we do that because it is a nightmare to collect. Front-line NHS staff are involved in recovering charges, which is not appropriate; the fee is set at a level that calls into question its worth; and we sympathise with the plight of some drivers who are faced with a bill for treatment."
      —[Official Report, Standing Committee B, 12 January 1999; c. 65-6.]
      There is no difference between the GP emergency treatment fee and the hospital one. Indeed, hospitals could arrange for solicitors to act on their behalf. I did not notice the hon. Member for Hendon proposing on Second Reading or in Committee that hospitals could employ solicitors. What applies to GPs should also apply to hospitals. As the Minister pointed out, the only difference is that GPs are independent contractors. I accept that, but there is still a provision for those independent contractors to receive the fees to which they are entitled.
      Will the Minister consider accepting the new clause? Ultimately its implementation will cost nothing as the fee can be collected by health authorities. The new clause would fulfil what I believe to be the intentions of those who drafted the Bill and avoid offending drivers and patients who are asked to pay directly that small but significant fee to the NHS.
      Mr. Philip Hammond: The Opposition support the new clause, as it is identical to the one tabled in Committee by my hon. Friend the Member for Rutland and Melton (Mr. Duncan), who sadly is unable to be here today. He sends his apologies, as he is attending the funeral of His Grace the Duke of Rutland.
      The issue was debated extensively in Committee, but was not voted on owing to some confusion over the interrelationship between new clause 1 and clause 18 of the Bill. I understand that it has now been established that new clause 1 stands alone, and can be considered alone today.
      As the hon. Member for Oxford, West and Abingdon (Dr. Harris) said, all parties to the discussion recognise that the emergency treatment fee has caused disproportionate costs to those collecting it and distress to those from whom it is collected. The previous Government made it clear that it was their intention to abolish the emergency treatment fee as soon as a convenient legislative opportunity arose. It was not a burning issue—more of a tidying—up exercise. This Bill is such an opportunity.
      The Minister's immediate predecessor—now the Chief Secretary to the Treasury—referred to the charge as a "sick tax" and a "tax on accidents". Fortunately for the right hon. Gentleman, fate intervened to prevent the Committee from hearing his explanation of the retention of what my hon. Friend the Member for Rutland and Melton has described as a "fag-end" of a charge.

      1041
      The Minister has indicated in Committee that his motivation for retaining the charge is essentially permissive, and that he seeks to leave it to individual GPs to decide whether or not it is worth collecting the charge. That runs the risk of different practices being adopted in different places, and of public confusion being generated. The Minister will agree that concern about different treatment of similar cases is one of the consistent themes of the debate about the NHS.
      At £21.30, the charge is probably irrelevant to most GPs, but it is also insulting. Either they are expected to attend accidents as part of their contracted NHS work—and should, as the hon. Member for Oxford, West and Abingdon said, be suitably rewarded by the NHS for that work—or, if that work is viewed as independent and outside the NHS GP contract, they should be able to levy a charge that reflects the real contribution that they make at the incident. We should bear it in mind that, for the most part, the patients are not the GP's own patients but passing strangers, and that the GP has happened to be the first person available at the scene.
      The Minister and the House may recall a case that was widely reported in the press a few months ago, in which a doctor on an American Airlines flight rendered life-saving assistance to another passenger, and sent the airline a bill for £240 which the airline refused to pay. The doctor, in a much-publicised case, sued the airline in London for payment of his bill. The public attitude at the time was that the airline's compensation to the doctor—a bottle of champagne, which probably had about the value of the £21.30 charge that we are talking about—was wholly inappropriate and insulting in the circumstances of a life-saving intervention. It was widely thought to be a mean recompense for the work that he had done.
      The Minister has presented the retention of the emergency treatment fee as an opportunity for GPs—as essentially a permissive measure, allowing GPs to charge the fee. However, is it not in fact essentially restrictive in its operation? Does not the emergency treatment fee define the amount that a GP—a private contractor—is able to charge for attending a road accident, and set that amount at an artificially low level?
      If the levying of a charge by a GP at the scene of an accident is to be seen as an act of private medicine—something that the GP carries out outside the terms of his NHS contract—the charge is limiting, and too low. If, on the other hand, it is to be seen as part of a GP's NHS duties, it is very important that the application of the emergency treatment fee, and the charging of it to patients, should be universal, because it will rightly lead to public discontent if people in the same situation are treated in different ways on different occasions.
      The emergency treatment charge, and the cost and distress caused by its collection, can no longer be justified by the same logic that the Government have used to argue for the abolition of the charge in hospitals. It is a fag-end of a charge and no longer has any constructive use in the context of the rest of the Bill.
      Mr. Hutton: We discussed this aspect of the Bill extensively in Committee. Most of the arguments that we have heard today were substantially rehearsed then. I made it clear in Committee that I had some sympathy
      1042
      with the arguments but, for the reasons that I gave then, and which I will briefly rehearse again today, I will invite the House to reject the new clause if the hon. Member for Oxford, West and Abingdon (Dr. Harris) forces a Division.
      I must correct one or two misunderstandings that have arisen today. The hon. Member for Oxford, West and Abingdon implied that the emergency treatment fee was last increased in 1988; that is not the case—I am sure that it was merely a slip on his part—as it was last increased in 1995 by the previous Government. The hon. Member for Runnymede and Weybridge (Mr. Hammond) said that they intended to abolish it—unfortunately, they never got round to doing it, although they had 18 years in which to have a fist at it—but I understand that, far from the position being as the hon. Gentleman said, Ministers in the previous Administration decided ultimately not to abolish it. That might be food for thought for the hon. Gentleman when he considers whether his hon. Friends should support the new clause.
      I want to re-emphasise the fact that we have received no representations at all from the medical profession asking us to remove the right to claim the emergency treatment fee. The failure of the hon. Member for Oxford, West and Abingdon to tell the House the result of his consultation with the medical profession was conspicuous. I asked him whether it had expressed a view to him about whether the emergency treatment fee should be abolished. I understand its position to be that it wants the right to claim the fee to be retained in the legislation.
      As a general principle of how we legislate, I am not sure that it is a terribly good idea to introduce changes at this stage of a Bill's progress without consulting the relevant people—in this case, the medical profession—in the way that the hon. Member for Oxford, West and Abingdon implied that he had.
      Dr. Harris: I made it clear at the beginning of my speech that we were seeking to abolish not the right of general practitioners to claim the fee but the provision whereby they have to approach the patient, whether directly or through a solicitor. That is crucial. The general practitioners to whom I spoke—at least one of whom is present in the House—would welcome the opportunity to claim the fee through the health authority, in the normal way, and not directly from the patient.
      Mr. Hutton: I will come to that point in a minute, but we should be quite clear that the hon. Gentleman and his supporters, without having first sought the views of the medical profession, are proposing to remove from general practitioners the right to claim the fee. As I understand it, the profession's views are clear: it wants to retain the option to claim an emergency treatment fee. He is proposing a change in the law that does not command the support of the medical profession, to whose views he has turned only very late in the day. That is not a scientific or appropriate way in which to progress the argument.
      Mr. Hammond: The Minister appears to be allowing the medical profession to dictate the legislative agenda. I will be very interested to see whether that deference continues when we consider the NHS Bill later in the Session.
      Mr. Hutton: The hon. Gentleman is perhaps reading more into my remarks than he should. I am saying that

      1043
      the Liberal Democrats are proposing a change in the law that they have not trailed in advance with the medical profession and on which they have not sought its views. The point I am making is that it is appropriate, when the law is being changed, to consult properly those parties who will be affected by the change. The hon. Member for Oxford, West and Abingdon has not done that on this occasion and that is another reason why I will urge my hon. Friends to reject the new clause.
      1.45 pm
      Mr. Simon Hughes: The Minister is trying to use an answer that is not the substantive answer as a defence to the proposition made by my hon. Friend the Member for Oxford, West and Abingdon (Dr. Harris). My hon. Friend's case has two elements, the most important of which is that it is inappropriate for somebody to seek the fee from the victim at the roadside, or later through solicitors. What would be the Minister's view if the proposition were simply that a different method of collecting the money for the service were used? For example, the health authority could be asked for payment rather than the person affected directly.
      Mr. Hutton: As the hon. Gentleman is aware, that is a possible option. It was raised by the hon. Member for Oxford, West and Abingdon and I shall try to deal with the points that he raised in a minute. We have considered the issue carefully and the Department has received approaches from various representative bodies. We know that general practitioners continue to want the right to collect the fee as independent contractors, if they consider collection worthwhile in terms of effort and the effect on those from whom the fee is claimed. We are not minded to remove a right that has belonged to GPs since 1934.
      It was suggested in Committee that if collecting the emergency treatment fee were a problem for hospitals, that must also be true for GPs and independent doctors. We have checked that point. We also received no representations from independent doctors on the emergency treatment fee, other than ones wishing to see it remain. Indeed, some representations suggested that it should be increased. We have not received any representations from the profession asking us to abolish the right to claim the emergency treatment fee.
      Dr. Peter Brand: Can the Minister say how many independent contractors have made those representations? I am not surprised that we have not seen massive numbers of GPs calling for the abolition of the charge, because most GPs do not claim it or even carry the paperwork to claim it. It is against the ethos of most people working in primary care in the health service.
      Mr. Hutton: I wish to correct one misunderstanding held by the hon. Gentleman. The right to collect the emergency treatment fee is not limited to GPs in the national health service but is, in theory, available to any legally qualified medical practitioner, whether he has a contract with the national health service or not. I said earlier that I had some sympathy with the arguments made by the Liberal Democrats, but the profession has not made representations to the Government for such a change.
      Mr. Simon Hughes: Answer the question.
      Mr. Hutton: I have answered the question. I have repeatedly made it clear to the House that no
      1044
      representations have been made asking Ministers to abolish the emergency treatment fee. Those members of the profession whom we have consulted want to retain the right as an option.
      The hon. Member for Oxford, West and Abingdon also raised the issue of the impact of the change on the national health service's budget. Although we are able to recover the loss of income in the hospital sector through the new tariff, if the emergency treatment fee were scrapped for GPs, health authorities would have to meet the costs in every case. There is no method to recoup the lost income in that situation. The new clause would impose an additional, unquantifiable financial burden on the national health service, and the Liberal Democrats have not told us where the additional resources to pay for that would come from. I have some sympathy with the argument of the hon. Member for Oxford, West and Abingdon, but for the reasons that I have advanced, today and in Committee, I shall urge my hon. Friends to reject the new clause.
      Dr. Harris: That answer is wholly unsatisfactory for a series of reasons, and I have to press the Minister further. Although these points were discussed in Committee, the extra information that the Minister has given has been much less satisfactory than that given in Committee.
      It is not the job of an Opposition party to consult on legislative opportunities. If we were to be given some civil service time, we could do a poll within a few days, and certainly well before the Bill completes its proceedings here and in the other place. Our question would not be the Minister's, which is, "Do general practitioners want to retain the right to receive income for this item of service?" We would ask, "Do GPs wish to retain the right to receive income from individual patients rather than claiming it back from the health authority?"
      Sir Robert Smith: Ministers confuse the situation further by saying that they want to keep the option. They may not want to use the option, but they want to keep it. Out-patients lying in the street will not know as a general practitioner approaches whether or not that GP plans to use the option. There will be random charges on people depending on who is their GP.
      Dr. Harris: That is an important point. In the last part of what the Minister said, he stated that switching the claim from patient to health authority would increase costs on health authorities. If he says that that cost would be unquantifiable, he must accept that there is currently an unquantifiable direct cost on patients. The difference between the situation that he envisages and the current situation is that patients pay the difference. The unquantifiable cost is put directly on patients.
      In making his point, the Minister concedes my other point: doctors do not mind where the income comes from. In fact, doctors would largely object, as does my hon. Friend the Member for Isle of Wight, to claiming the money directly, or through a solicitor, from the patient.
      Dr. Peter Brand: There is some confusion about emergency treatment and fees for road accidents. There is a perfectly respectable way in which to pay GPs for providing emergency treatment to people other than their own patients. Most GPs accept that they have an

      1045
      obligation to patients on their own list and on the lists of their partnership. The national health service is there to provide all necessary treatment.
      When the need arises for a doctor to give emergency help to someone else's patients, the GP can, under every circumstance except that of a road traffic accident, make a perfectly proper claim to the NHS through his or her health authority. We urge the Minister to remove the limitation on emergency treatment—
      Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Gentleman is making a speech rather than an intervention.
      Dr. Harris: I understood my hon. Friend's point although it was curtailed. If he feels that I did not, I should be happy to hear him make a speech.
      At present, the retention of the provision allowing general practitioners to claim a fee directly from the patient makes a difference only to those patients already on the relevant GP's list. If the patient is not on the GP's list, the general trend is to claim an emergency treatment fee from the health authority. The law forces the GP to make an extra claim only on those patients who have a relationship with that doctor. Nothing is so calculated to damage the doctor-patient relationship as people on a GP's list being asked by their doctor for an additional treatment fee for treatment outside the surgery in a car crash.
      The Minister has not said how many doctors have written, of their own volition, to say that they want to retain the option to reclaim the fee. The question should be whether doctors want to retain the fee from the patient, not the health authority. Will the Minister quantify the representations that he has had, and, if possible, will he place them in the Library before the Bill goes to the other place?
      It is the Government's duty to ask questions of the profession. The key question is whether GPs think it appropriate to have the power to collect the money directly from the patient.
      The Liberal Democrats believe that progress can be made on health service provision even in the face of opposition from doctors. The Minister put a most un-Bevanite concept to the House when he said that if an unquantified number of doctors object to the way in which they are paid, no legislative progress can be made. We Liberal Democrats do not accept that concept. As the hon. Member for Runnymede and Weybridge (Mr. Hammond) hinted, this Government have a tradition of caving in to general practitioner vested interests, for example, on the composition of primary care groups and a number of other issues.
      If the question were put in the way that I suggested, I do not believe that the medical profession would object or, even if it did, that the Government should not legislate. After all, hospitals were not consulted on whether their emergency treatment fees should be abolished and they are so strapped for cash that I am sure that they would want to claim that extra income if they thought it worth while.
      I shall hone down my questions for the Minister. How many responses to the consultation were received? Will he place them in the Library, so that we can see
      1046
      them? Will he ask the question correctly before the Bill ends its progress in another place? Does he agree that, regardless of the view of the medical profession, if the policy is deemed to be right and in the patient's interests, he should follow it?
      Finally, what is the view of patients? That question remains unanswered, I suspect because it was not asked. It is a simple matter for the Minister to ask the Patients Association whether patients should be liable to pay a general practitioner for NHS treatment within seven days in an emergency situation.
      I regret that the Minister's reply did not satisfy me. He placed the burden of legislation on the Liberal Democrats, which we would be more than willing to accept if the Government were prepared to ask us for legislative ideas outside the House. The Government are capable of undertaking those consultations, finding the answers and considering the principle of the charging mechanism. I urge the Minister to come back with more encouraging comments.
      Mr. Simon Hughes: We want to bring this matter to an early conclusion. I hoped that the Minister would respond positively to my hon. Friend the Member for Oxford, West and Abingdon. I shall add one point and, if we still receive no response from the Minister, I think both the Conservatives and the Liberal Democrats will have to press the matter, because we should have had a concession.
      The Minister is new to his post, but he gave some of the weakest arguments in defence of the Government's position that I have ever heard during debates on health service legislation. He does not have the figures and he did not say that the change would bring in a large amount of revenue for the health service. Nor did he say that it would be in the patients' interests. All he said was that the provision gives an option, which virtually no one uses, to collect some money, which is probably not very much. That is no way to run the health service. If we were talking about the Government forgoing billions of pounds, I could understand it, but we are not.
      My hon. Friend the Member for Isle of Wight (Dr. Brand), who has regular experience of these matters, pointed out how general practitioners in the health service reclaim fees for work that they do that is over and above work for their patients and their practice. In a rationed, streamlined and intelligent health service for the next century, what on earth is the argument for having one system to reclaim money for all sorts of activities, and a different system—which most GPs do not want to use because they consider it embarrassing and unethical—to reclaim money for one small category of people for one sort of work that GPs do? There is no logic to such a system. If we are trying to reduce the burden of bureaucracy on my hon. Friend the Member for Isle of Wight, his wife and other practitioners in the health service, for heaven's sake let us have one system, which will allow one piece of paperwork whereby one collects money in one way at one time and reduces the charges to the rest of the system.
      Unless the Minister gives the House some comfort, we will not only force the new clause to a vote now, but we will be obliged to oppose the Bill on Third Reading because the Government's position has no logic. Also, we will ask our colleagues in the other place, where the

      1047
      Government do not yet have a majority, to ensure that common sense prevails. If we cannot get common sense from Ministers in this House perhaps, before the consistutional changes up the Corridor, there will have to be another Government defeat in the Lords, in the interests of the patients of the British national health service.
      Dr. Harris: I should like to sum up because there are now more Labour Members in the Chamber than before. I wish to make it clear to the Government that it is because of their motives and words that we shall press the new clause to a Division. As the Minister said in Committee, the money is a nightmare to collect. Front-line staff are involved in recovering charges. If Government policy is dictated by what is acceptable to GPs, today's announcement by the General Medical Services Committee on the Government's outrageous rationing decisions will give the Government serious pause for thought. On that note, I commend new clause 1 to the House.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 28, Noes 208.

      Division No. 43]

      [2 pm

      AYES

      Kirkwood, Archy

      Livsey, Richard

      Allan, Richard

      Llwyd, Elfyn

      Beith, Rt Hon A J

      Moore, Michael

      Bell, Martin (Tatton)

      Morgan, Alasdair (Galloway)

      Brake, Tom

      Öpik, Lembit

      Brand, Dr Peter

      Rendel, David

      Bruce, Malcolm (Gordon)

      Russell, Bob (Colchester)

      Burnett, John

      Sanders, Adrian

      Chidgey, David

      Stunell, Andrew

      Cotter, Brian

      Tyler, Paul

      Foster, Don (Bath)

      Willis, Phil

      George, Andrew (St Ives)

      Hancock, Mike

      Tellers for the Ayes:

      Harris, Dr Evan

      Sir Robert Smith and

      Heath, David (Somerton & Frome)

      Mr. Colin Breed.

      Hughes, Simon (Southwark N)

      Kennedy, Charles (Ross Skye)

      NOES

      Ainsworth, Robert (Cov'try NE)

      Chisholm, Malcolm

      Allen, Graham

      Clapham, Michael

      Anderson, Janet (Rossendale)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Ashton, Joe

      Clarke, Tony (Northampton S)

      Austin, John

      Clelland, David

      Barnes, Harry

      Coaker, Vernon

      Bayley, Hugh

      Coffey, Ms Ann

      Beckett, Rt Hon Mrs Margaret

      Coleman, Iain

      Begg, Miss Anne

      Colman, Tony

      Benn, Rt Hon Tony

      Connarty, Michael

      Berry, Roger

      Cook, Frank (Stockton N)

      Best, Harold

      Cooper, Yvette

      Blizzard, Bob

      Corbyn, Jeremy

      Borrow, David

      Corston, Ms Jean

      Bradley, Keith (Withington)

      Cox, Tom

      Bradley, Peter (The Wrekin)

      Cranston, Ross

      Bradshaw, Ben

      Cryer, Mrs Ann (Keighley)

      Brown, Russell (Dumfries)

      Cryer, John (Hornchurch)

      Buck, Ms Karen

      Cummings, John

      Butler, Mrs Christine

      Cunningham, Jim (Cov'try S)

      Campbell, Mrs Anne (C'bridge)

      Davies, Rt Hon Denzil (Llanelli)

      Campbell, Ronnie (Blyth V)

      Davies, Geraint (Croydon C)

      Caplin, Ivor

      Davis, Terry (B'ham Hodge H)

      Caton, Martin

      Dean, Mrs Janet

      Cawsey, Ian

      Dismore, Andrew

      Chapman, Ben (Wirral S)

      Doran, Frank

      Chaytor, David

      1048

      Dowd, Jim

      Marshall, Jim (Leicester S)

      Drew, David

      Martlew, Eric

      Eagle, Angela (Wallasey)

      Merron, Gillian

      Eagle, Maria (L'pool Garston)

      Michie, Bill (Shef'ld Heeley)

      Efford, Clive

      Milburn, Alan

      Ellman, Mrs Louise

      Miller, Andrew

      Etherington, Bill

      Mitchell, Austin

      Fisher, Mark

      Moran, Ms Margaret

      Fitzpatrick, Jim

      Morgan, Ms Julie (Cardiff N)

      Flynn, Paul

      Mullin, Chris

      Follett, Barbara

      Murphy, Denis (Wansbeck)

      Foster, Michael Jabez (Hastings)

      Naysmith, Dr Doug

      Foulkes, George

      Norris, Dan

      Fyfe, Maria

      O'Brien, Bill (Normanton)

      Galloway, George

      O'Hara, Eddie

      Gardiner, Barry

      Organ, Mrs Diana

      Gerrard, Neil

      Osborne, Ms Sandra

      Godman, Dr Norman A

      Palmer, Dr Nick

      Goggins, Paul

      Pearson, Ian

      Gordon, Mrs Eileen

      Perham, Ms Linda

      Griffiths, Jane (Reading E)

      Pickthall, Colin

      Griffiths, Nigel (Edinburgh S)

      Pike, Peter L

      Grocott, Bruce

      Plaskitt, James

      Grogan, John

      Pollard, Kerry

      Gunnell, John

      Pond, Chris

      Hall, Patrick (Bedford)

      Pope, Greg

      Hanson, David

      Pound, Stephen

      Heal, Mrs Sylvia

      Prentice, Ms Bridget (Lewisham E)

      Healey, John

      Prentice, Gordon (Pendle)

      Henderson, Ivan (Harwich)

      Prosser, Gwyn

      Heppell, John

      Quin, Ms Joyce

      Hill, Keith

      Quinn, Lawrie

      Hinchliffe, David

      Radice, Giles

      Hoey, Kate

      Rammell, Bill

      Home Robertson, John

      Rapson, Syd

      Hughes, Ms Beverley (Stretford)

      Reed, Andrew (Loughborough)

      Hughes, Kevin (Doncaster N)

      Rooker, Jeff

      Hurst, Alan

      Ross, Ernie (Dundee W)

      Hutton, John

      Ruane, Chris

      Iddon, Dr Brian

      Russell, Ms Christine (Chester)

      Jackson, Helen (Hillsborough)

      Ryan, Ms Joan

      Jenkins, Brian

      Salter, Marlin

      Jones, Helen (Warrington N)

      Savidge, Malcolm

      Jones, Ms Jenny (Wolverh'ton SW)

      Sawford, Phil

      Jones, Martyn (Clwyd S)

      Sedgemore, Brian

      Keeble, Ms Sally

      Shaw, Jonathan

      Kelly, Ms Ruth

      Sheldon, Rt Hon Robert

      Kennedy, Jane (Wavertree)

      Shipley, Ms Debra

      Kilfoyle, Peter

      Simpson, Alan (Nottingham S)

      King, Andy (Rugby & Kenilworth)

      Skinner, Dennis

      Kingham, Ms Tess

      Smith, Rt Hon Andrew (Oxford E)

      Ladyman, Dr Stephen

      Smith, Angela (Basildon)

      Laxton, Bob

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Lepper, David

      Smith, John (Glamorgan)

      Leslie, Christopher

      Soley, Clive

      Lewis, Ivan (Bury S)

      Southworth, Ms Helen

      Linton, Martin

      Starkey, Dr Phyllis

      Lloyd, Tony (Manchester C)

      Steinberg, Gerry

      Lock, David

      Stewart, David (Inverness E)

      Love, Andrew

      Strang, Rt Hon Dr Gavin

      McAllion, John

      Stringer, Graham

      McAvoy, Thomas

      Stuart, Ms Gisela

      McCabe, Steve

      Sutcliffe, Gerry

      Macdonald, Calum

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      McDonnell, John

      Taylor, David (NW Leics)

      McGuire, Mrs Anne

      Thomas, Gareth R (Harrow W)

      McIsaac, Shona

      Timms, Stephen

      McNulty, Tony

      Tipping, Paddy

      McWalter, Tony

      Todd, Mark

      Mahon, Mrs Alice

      Touhig, Don

      Mallaber, Judy

      Turner, Dr George (NW Norfolk)

      Mendelson, Rt Hon Peter

      Twigg, Stephen (Enfield)

      Marek, Dr John

      Vis, Dr Rudi

      Marsden, Paul (Shrewsbury)

      Wareing, Robert N

      Marshall, David (Shettleston)

      1049

      White, Brian

      Worthington, Tony

      Whitehead, Dr Alan

      Williams, Rt Hon Alan (Swansea W)

      Tellers for the Noes:

      Wood, Mike

      Mr. Mike Hall and

      Woolas, Phil

      Mr. Clive Betts

      Question accordingly negatived.

    New clause 2

      DUTY OF INSURERS TO SUBMIT ANNUAL REPORT TO PARLIAMENT
      'It shall be the duty of any person liable to pay a charge to the Secretary of State under section 1 to submit by 30th June in each year following the passing of this Act a report to each House of Parliament, stating in respect of the preceding calendar year—

      (a) the total of any such payments made to the Secretary of State, and

      (b) the effect, if any, of making those payments on the cost to that person's customers of purchasing motor insurance.'—[Mr. Harris.]

      Brought up, and read the First time.
      Dr. Harris: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this, it will be convenient to discuss new clause 3—Secretary of State's report on payments made under the Act—
      '—The Secretary of State shall submit a report to each House of Parliament by 30th June in each year following the passing of this Act stating in respect of the preceding financial year the total of any payments made to him under the provisions of this Act.'.
      Dr. Harris: The new clause would open up the legislation to the wider public so that its effects as a whole are explicit. The Minister and the House may know from the Second Reading debate that we are opposed to the Bill in principle because we believe that it surreptitiously introduces indirect charging of patients for NHS services. It is clear that, if the Bill became an Act, car insurance premiums would increase to cover the money that insurers would have to pay to the NHS for trauma treatment of third parties injured in road traffic accidents. We oppose that, and on Second Reading we made clear the reasons for our opposition.
      New clause 2 sets out to bring to the attention of the House and to the public at large the effect of indirect charging of patients through their insurance. It creates a duty on insurance companies liable for the charge to present to each House of Parliament by 30 June each year a report stating in respect of the preceding calendar year, first, the total of any payments made to the Secretary of State and, secondly any effect of making those payments on the costs to their customers of purchasing motor insurance.
      There has been a great deal of debate about how much car insurance premiums will rise as a result of the Bill. It must be noted that the debate has been about not whether premiums will rise but how much they will rise. We have had various estimates. The Department of Health is quoted in a House of Commons Library research paper as saying that every insurance premium would
      "increase by £6 to £9."
      1050
      The Association of British Insurers says on page 1 of its newsletter No. 28 from December 1998 that the Bill will "lead to premium increases." The Automobile Association is quoted on page 17 of the Library research paper as saying that the Bill would have the effect of
      "adding around £10 to the cost of the average £260 annual motor policy."
      The Independent said in December 1997 that the
      "NHS bill may put £20 on car premiums".
      It is not disputed that the Bill will lead to an increase. The figures are all within the same ball park.
      The Minister may argue that the Bill should not lead to an increase in car insurance premiums because hospitals already have the power to charge the insurers of third parties injured in road traffic accidents, but they do not do so because of the bureaucratic difficulties involved. That is by the by. Premiums were not loaded to cover reimbursement of the NHS to the extent that is now envisaged. Indeed, the Government expect that the Bill will generate income for the health service over and above that which is generated at the moment. That is predicated on an increase in payments to the NHS.
      If we are to have a sensible debate about paying for the NHS, it is vital that people are aware of how they are paying for it. People know that they pay income tax. The polls show that people would gladly pay more to improve the services provided by the NHS. We are unable to have that debate with more than one party as other parties have decided that they will not use that approach to raising income. It is important that the general public know, and are allowed to find out, how much they are paying through the back door, because the amount that they pay through general taxation has been politically limited by political parties, and newspaper proprietors who beseech political parties not to pursue certain policies.
      2.15 pm
      Mr. Hammond: Will the hon. Gentleman confirm for the record whether he seeks to start a debate on a genuinely new approach to NHS funding? Or is the Liberal Democrats' only proposal to increase income tax to fund the NHS yet further out of general taxation?
      Dr. Harris: Not at all. The hon. Gentleman will know that his party—somewhat later than mine—has called for a debate on NHS funding. We have made it clear that we are not minded to believe that the private sector is an effective source of income to help take the strain of NHS provision. We do not believe that it is possible to save the NHS by urging people not to use it, but we accept that that argument and others could be put in such a debate. If the Government intend to increase direct charges for prescriptions and other items, or to increase indirect charges through some form of insurance, they could be explicit and honest in such a debate. We would welcome that debate. We have our own ideas to put forward, but we are certain that, until we have an explicit, honest and rational debate, it is premature to increase surreptitiously the amount that individual users of the NHS pay through regressive, indirect means such as charges on motor insurers.
      Mr. Simon Hughes: I wish to make a point supplementary to the point made by the Conservative spokesman, the hon. Member for Runnymede and

      1051
      Weybridge (Mr. Hammond). The debate goes much wider than the question whether income tax should rise. We should put on the agenda what charges should remain—including prescription charges. The debate is also about funding residential care and nursing care for the elderly, which could be a subject for a royal commission, and where the social security system fits in. I hope that my hon. Friend will make it clear to his colleagues in today's debate that we are willing to participate with all other parties in what we would call a commission on the future of the health service. We should have the debate outside Parliament, in the open, with patients, the professionals and the pharmaceutical industry.
      Dr. Harris: That is the critical point. If people do not know by how much car insurance premiums have risen, they will not know the effect that the Government's legislation is having on their pockets. Far too little attention is given to indirect charges in other public services. That is why we seek to make that information available by means of new clause 3, which has been tabled by Conservative Members and which we support, and of new clause 2.
      I do not accept the ABI's rather mild representations that the information will be commercially sensitive. It has said that premiums will increase, and I do not believe that it will be impossible for insurance companies to work out how much they are paying to the NHS and by how much premiums have had to rise to take on the onus of funding the health service as well as insuring people. Car insurance is a highly competitive market, and of course some information will be commercially sensitive, but the information called for in new clause 2 cannot be refused by the Minister on the basis of the ABI's objections.
      The Government claim that they support open government and wish to be honest with the people. We hear such rhetoric. Indirect charging is a litmus test of whether the Government will be explicit about costs. I urge the Minister to accept new clause 2 in the name of openness. It will certainly improve the Bill.
      Mr. Hammond: I listened with interest to the hon. Member for Oxford, West and Abingdon (Dr. Harris). I was a little surprised to hear him say that he supported new clause 3, tabled by my hon. Friends and me, because it was tabled as an alternative to new clause 2, tabled by the Liberal Democrats.
      Parliament will want to monitor the Bill carefully, as it introduces a major new charge in the NHS. Hon. Members will want to look at the legislation's effect on both NHS revenues and insurance premiums paid by the motoring public for two reasons: first, because it is important to see the impact of the measure; and, secondly, because the measure is innovatory, so people will be anxious to establish its overall effect. One issue that it will be important to consider is whether its impact is equitable.
      The hon. Member for Oxford, West and Abingdon spoke about the increases in insurance premiums that will undoubtedly flow from the introduction of the measure, but it is not clear whether insurance premiums will increase uniformly across the board. Different insurance companies have different client profiles and claims experiences, and the measure's impact on insurance premiums is likely to differ radically between different groups of motorists.
      1052
      An issue that deeply concerns us is the anti-rural bias, which this side swipe at the motorist by the Labour Government undoubtedly has. We shall bear that in mind when we monitor closely how the measure impacts not just on motorists in the aggregate, but on sub-groups of motorists.
      It is undeniable that careful parliamentary scrutiny of what flows from the legislation will be needed. When considering new clauses 2 and 3 as alternatives to each other, the question is what is practicable and workable, and how much commercially sensitive information it is reasonable to expect private sector companies to provide. In Committee, the Minister referred to the opportunities that will arise for parliamentary scrutiny when the Government change the charges levied under the Bill, as they propose to do periodically. To ensure that the scrutiny debates that take place on those occasions are properly informed, information about the measure's overall impact must be available.
      Mr. Hutton: It may help the hon. Gentleman if I make it clear now, as I did in Committee, that we want hon. Members to have access to the fullest possible range of information to allow them to review the operation of the scheme. I made that clear in Committee; if it will help the hon. Gentleman now, I am happy to repeat it on the Floor of the House.
      Mr. Hammond: I am grateful to the Minister for repeating that. If he can answer in the affirmative the specific question that I am about to ask, it will go a long way towards reassuring Opposition Members. New clause 3 proposes that the Secretary of State submit a report to each House of Parliament annually, giving details of the total amount raised through charges under this legislation. That differs somewhat from new clause 2, proposed in the name of the Liberal Democrats, which places a duty on insurers—those who will pay the charges—to report to Parliament, giving detailed information on the impact that those charges have had on the calculation of their premiums and on their specific businesses.
      The Association of British Insurers agrees with us that companies that operate in a commercially sensitive area should not be asked for too much information about how they run their businesses and calculate their premiums, and about the profile of their customers. Those experienced in these matters, of whom I am not one, could deduce valuable commercial information from the type of information that new clause 2 proposes should be supplied to Parliament.
      I am relatively new in this place, but I find it curious that an outside body such as a commercial company should have to report directly to Parliament. It seems more appropriate that the Secretary of State should gather whatever information is needed and report to Parliament; he could then be answerable for his report in this place.
      New clause 3 achieves, without the disadvantages of new clause 2, much of what the Liberal Democrats seek to achieve. Information about premiums may be difficult for a commercial company to define in a meaningful way for the lay reader, and I would question the value of some of the information that the Liberal Democrats seek to have provided to the House. Indeed, in a briefing note that it has issued to all hon. Members, the ABI says:
      "Insurers are already required to produce company accounts and should not be bound to reveal additional commercial information to Parliament. Information on total receipts should be available from the NHS itself".

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      That is the essential point. The information that would have to be presented to Parliament under new clause 3 could be derived by the Secretary of State entirely from the compensation recovery unit, from his own records and from Government agencies, without imposing additional burdens on companies operating in the commercial sector. It could be derived without imposing additional burdens on the machinery of government and its agencies because, in a properly run organisation, which I am sure the compensation recovery unit is, that information will be readily available.
      Thus new clause 3 seeks to use aggregate information that is readily available. Because it is presented in an aggregate form, it avoids the pitfalls that the ABI has identified in terms of the revelation of confidential information, while still providing the House with the critical overall figures that will tell us how successful the measure has been in terms of funding the NHS. That information would be directly available under new clause 3. It would also inform an intelligent analysis of the impact, in aggregate, on motor insurance premiums.
      I suspect that trying to use central data to determine the impact on individual groups of motorists or individual motorists would be a fruitless exercise. On the sound basis of some aggregate data which the Secretary of State could provide, hon. Members, in pursuing the scrutiny process, may rely on anecdotal information collected from constituents on the differing impact on premium rates across the spectrum.
      2.30 pm
      Mr. Tim Collins: Is there not another difficulty with new clause 2 in addition to those that my hon. Friend has brilliantly analysed? New clause 2 requires insurers to provide information according to the preceding calendar year, yet many insurers operate on entirely different financial years, so the new clause is even more onerous than it seems.
      Mr. Hammond: I thank my hon. Friend for that contribution. He is absolutely right. The problem is compounded by the fact that settlements of claims are often not made for two, three or four years. It may be difficult to gain an informed view from information that relates to the preceding year.
      The hon. Member for Oxford, West and Abingdon referred to what the Opposition health team calls the "information not collected centrally" syndrome. In Committee, the Minister, with some humility, recognised that syndrome. We have seen it on innumerable occasions when seeking information from the Department through parliamentary questions. The Department hides behind the decentralised structure of the health service as it was: it is becoming an increasingly recentralised structure, as the Government implement various measures. The decentralised structure of the health service enables the Secretary of State to say that information is not collected centrally. It is perfectly clear that a well-run health service requires information to be collected centrally. We have no doubt that it is available to NHS regional executives, and could be collected by the Secretary of State if he chose to do so.
      Mr. Simon Hughes: I agree with the hon. Gentleman. Now that it has been accepted across government that the
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      collection of statistics should be more independent and that there should be an independent statistical department, there is no excuse for the Government not to do what is necessary. In the health service in England, statistics could be collected regionally—no one would object if it were done region by region, because we could add up the figures for each region ourselves —or centrally by the Department in Richmond house. The information can be gathered without the Government saying, "No, we don't like it."
      Mr. Hammond: I entirely agree with the hon. Gentleman. The NHS is a vast organisation spending billions of pounds and employing hundreds of thousands of people. The collation of information is essential for the proper management of an organisation of that scale. I hope that the Minister will reflect on that. Indeed, the Secretary of State has shown his willingness to make more information available. He famously told the BBC "Today" programme back in September that he would ensure that, as soon as possible, data on total waiting lists—those awaiting a first consultation with a specialist and those awaiting in-patient surgical treatment—would be available.
      The Secretary of State seems not to be keen on an independent audit or examination of the figures. On the same broadcast, he referred to a reputable firm of chartered accountants that specialises in collating data on the NHS as a "tinpot firm". That appropriately sums up the Secretary of State's attitude to the independent scrutiny of these matters.
      We want an assurance that the Government will not hide essential information about the impact of the Bill behind a smokescreen by saying that the money is distributed to individual hospital trusts and that the information is available only at that level. In Standing Committee, reference was made to the fact that information was available in the published accounts of hospital trusts. It is not practical for parliamentarians who want properly to scrutinise these matters to plough through the annual accounts of thousands of hospital trusts up and down the country and aggregate the information. In a well-run Department of Health, the information should be available in an aggregate form.
      Can the Minister satisfy the Conservative Opposition that the data referred to in new clause 3 will be regularly made available to Parliament? We would be satisfied if he could assure us that information on the amount of money collected by the compensation recovery unit and distributed to NHS trusts will be included in the quarterly data series. Alternatively, if the Secretary of State is unable to do that, the presentation to Parliament of that information in an annual report, as the new clause suggests, would achieve the same end, although somewhat more tardily.
      The intentions of the new clause would be better served by an assurance from the Government that the data required will be included in the quarterly data series. If the new clause were carried and the data were provided annually, the information could be out of date when any proposed changes to the amounts to be charged were scrutinised.
      We seek an assurance that the aggregate figure, which is readily available to the Secretary of State, will be regularly made available to Parliament. I can see no basis

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      on which the Government could object to that. It would enable Parliament to perform its work of properly scrutinising the outcome of the legislation. That is important in itself, but also because these are the first new charges of any substance that the Government have introduced in the NHS. We and the Government will want to assess carefully the effectiveness of these measures and their impact on the overall funding of the NHS. I hope that the Minister can give us some reassurance about his willingness to make the data available.
      Mr. Robert Syms: I support my hon. Friend on new clause 3. It is less prescriptive than new clause 2. Having listened to what the Minister said, I do not think that the Government and the official Opposition are too far apart. We are looking for reassurance that statistical information will be available by which we can measure the effectiveness of the operation of the legislation.
      The Association of British Insurers supports the concept of parliamentary scrutiny, as we all do. It is important that the collection system be seen to be fair and efficient. Earlier, the Government took credit for raising between £120 million and £140 million through this proposal, and said that it would not cost anyone anything. However, as we have heard, insurance costs will be incurred. How the data can be collected efficiently will be an important matter for hon. Members to consider.
      The impact on insurance premiums may be different for different categories. The young may pay disproportionately higher premiums, so may be hit much harder. If the Minister could move a little more in our direction, we could be reassured that there will be enough information to have a sensible, reasonable debate about the effectiveness of the legislation, how it is operating and what impact it has on the national health service, insurance payers and our constituents; and, having sat on the Committee considering the Bill, I for one would be satisfied.
      Mr. Hutton: The arguments in support of both these new clauses rest on a number of assumptions that I do not accept. The first assumption is that the Government have been less than open about the impact of the legislation, especially on motorists and on NHS funding. That is not so. The new clauses would lay down new obligations to disclose information, but that is unnecessary for reasons that I shall outline.
      The Opposition assume that the Government are trying to withhold information, but we are not. Throughout the passage of the Bill, we have tried to help Members to appreciate the fundamental issues underpinning the legislation. We want to make the maximum amount of information available to allow proper scrutiny by the House of the proposed measures. For a general reason, I feel that there is no substance in the underlying arguments in favour of either new clause. Both would impose additional obligations on the Government to disclose information to the House.
      The arguments for the new clauses are based on a second false assumption —that we are imposing a new charge on people who use the national health service. We are not doing that. The Bill will simply streamline and improve arrangements for collection of existing charges, which are recoverable under legislation dating back to the 1930s. It is concerned with ensuring that the NHS can
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      recover the costs of treating road accident victims, not from motorists or patients but from insurance companies, when a successful claim for compensation has been made following a road traffic accident.
      Mr. Hammond: I do not accept the Minister's assertion that this is not a new NHS charge. The Government are giving teeth to a mechanism that has enabled the collection of a piffling £15 million or £16 million a year in charges, to ensure that £150 million a year is collected. The man in the street, however, sees little difference between the introduction of a wholly new charge and the ratcheting up tenfold of an existing charge, converting a relatively meaningless exercise into the raising of a significant amount.
      Mr. Hutton: With respect, I think that most members of the public can distinguish between the more effective collection of an existing charge and the laying down of a new charge for the use of the national health service. I do not think that the hon. Gentleman's argument is very coherent, and I am not sure that he will consider it to be so after he has had a chance to reflect on it.
      There is no logic, or foundation in fact, for hon. Members' justification of the new clauses. It is underscored by the assumption that the Government are trying to withhold information from the House and from individual Members, which has led to the demand in new clause 2 for an unprecedented obligation on insurance companies to give the House information directly in the form of annual reports, and the demand in new clause 3 for the Secretary of State to make that information available annually.
      The hysteria among Liberal Democrats seems to have subsided. I assume that they now have the hustings for the leadership vacancy that has arisen under better control. Perhaps, in the current spirit of harmony between the two sides of the House, we can begin to examine the real issues created by the Bill, rather than the fantasy and hyperbole that featured in much of what the Liberal Democrats said in Committee.
      We are discussing a simple mechanism that will facilitate the recovery of NHS charges. We want the NHS to benefit from significant additional resources. We have some sympathy with what the hon. Member for Runnymede and Weybridge (Mr. Hammond) said, but we want to be sensitive to issues of commercial confidentiality. We are aware of the burdens on business, and we do not intend to impose unnecessary and unreasonable burdens on insurance companies, which is one of the reasons why we do not support new clause 2.
      I should make it clear that the Department has never refused to offer MPs information about amounts collected by the NHS under existing road traffic legislation—
      Dr. Harris: Will the Minister give way?
      Mr. Hutton: No, I will not.
      As I said, the Department has never refused to offer information, and we have no intention of withholding it in the future.
      The hon. Member for Runnymede and Weybridge helpfully stated that, according to information received, just over £16 million was recovered last year under the existing scheme. The Department of Health already

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      collects such information: we aggregate trust accounts relating to road traffic income. The information is readily available now, and will continue to be available to hon. Members in future.
      Mr. Hammond: I suspect that the information to which the Minister refers will be extracted from trust accounts, and that there will therefore be a delay. The new regime for which the Bill provides will give the Minister an opportunity to obtain the information directly from the compensation recovery unit, a Government agency. Assuming that the unit is computerised, I would expect the information to be available on a quarterly basis, and very soon after the event.
      2.45 pm
      Mr. Hutton: The hon. Gentleman has done the House a favour by drawing attention to one of the benefits of the changes that we are introducing. The compensation recovery unit will have the advantage of up-to-date information technology, including new software, that will enable the information to be available to the House more quickly. I am not sure that we shall be able to provide it on a quarterly basis, but as a result of access to more efficient information technology, we shall generally be able to provide it sooner.
      I assure the hon. Gentleman, and others who are worried, that we have no intention of withholding such information from the House. It is important information; it will inform debates on any regulations laid before the House; and we want scrutiny of the legislation to be as well informed as possible.
      One of the difficulties that we have encountered with the Bill so far is caused by the desire on the part of Liberal Democrats in particular to misrepresent what we are doing. I understand that—it is a purely opportunistic political exercise—but we do not intend to withhold crucial information from the House. We want the House to be well informed, and we will ensure that it is.
      For the reasons that I have given, I do not believe that there is any substantive argument for either new clause.
      Dr. Harris: Will the Minister give way?
      Mr. Hutton: No.
      We do not accept the arguments of the hon. Member for Oxford, West and Abingdon (Dr. Harris) for his new clause, which we consider to be unreasonable and unfair. We do not intend to legislate along those lines.
      I hope that the hon. Member for Runnymede and Weybridge and his colleagues will accept my assurance that we intend to make it absolutely clear that the information will be made readily available. We are committed to reviewing the scheme after six months, and to publishing the results of our review. I hope that, on that basis, the hon. Gentleman will not press new clause 3, and the hon. Member for Oxford, West and Abingdon will not press new clause 2.
      Dr. Harris: It is interesting that the Minister should ask me not to press new clause 2, but—with uncharacteristic
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      churlishness—should refuse twice to allow me to intervene to ask him a specific question that might have enabled me to decide whether to press it.
      We do not doubt that information, particularly that requested in new clause 3, can be made available, and that the Government will do their best to make it available. That is why the Liberal Democrats did not table a similar new clause. We are reassured. Although we support—as we did in Committee—measures to enable the Government to provide the information, I believe that it will be available by means of parliamentary questions, the six-monthly review and other channels. As I said in Committee, I feel that it would be more readily available if payments were made to health authorities — which I think should be done for other reasons—but I think that it can be obtained from trusts and, probably, from the compensation recovery unit.
      We tabled new clause 2 because we feel that the crucial information that is required relates not to the global sum raised, but to the effects on individuals' car insurance. That will, of course, be a matter for debate. I was trying to help the House to decide whether this is a valuable way of raising money for the NHS by urging the Government to consider incorporating measures that will force insurance companies to make their own calculations on the effects, to help Members and the general public to educate themselves as to how much NHS revenue will result from the higher premiums.
      I understand the Conservatives' views on commercial information. I am sure that it is possible to word legislation more tightly to enable information to be obtained from insurance companies and examined without the sharing of commercially confidential information. Liberal Democrats want to extract a flat figure representing the amount that insurance companies think ordinary people are contributing to the increased amount that is being collected.
      I accept the Minister's opening point that the charge is not new. If hon. Members check the record, they will find that Liberal Democrats have at no point stated that we believe the charge to be new. We think that there was an opportunity to get rid of a charge, but it is clear at any rate that the Government will have increased income. That is one of their reasons for introducing the legislation.
      The measure will generate additional income from an existing charge by making its recovery more compulsory, by nationalising it, in effect, and by making it more efficient. If one wants to raise revenue by that method, the Bill is a good way in which to do it. Because we do not want to do that, we oppose the measure; it is not because the Bill is badly drafted, or would achieve its aim inefficiently. However, we do want to see exactly how the extra amount is raised from individual drivers' car insurance.
      Global sums of millions of pounds are difficult for people to understand in their everyday life. Indeed, the Government rely on fazing people with large figures when, uniquely and cleverly—although rather sneakily—they present extra money for the health service in three-yearly cumulative totals, not the usual year-on-year totals. I hope that any figures that come from the Government do not, if they apply to more than one year, repeat the habit of rolling up matching funding from one year with the previous year's allocation and the new allocation. That is a bad habit, which makes it difficult for people to understand.

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      People understand the amount of money that they pay in the pounds, shillings and pence on their car insurance. I ask the Minister to give me some assurances that there will some way to estimate, even from the Government's figures— although I am not convinced that I would necessarily accept them 100 per cent.—what the charges will be.
      Mr. Hammond: I am delighted to hear a Liberal Democrat using the currency of pounds, shillings and pence. I am not sure where that leaves the hon. Gentleman in the Liberal Democrat leadership stakes.
      The hon. Gentleman said that he wanted to know what the extra cost of the measure to ordinary people would be. Does he not understand that the problem is that there is no single ordinary person—there is no average motor insurance payer? The impact will range from zero on some insured people to substantial on others. The figure that has been quoted of £9 or £10 as an average—
      Mr. Deputy Speaker: Order. I sometimes give leeway to those on the Front Bench, but I cannot allow the hon. Gentleman to get away with a speech during an intervention.
      Dr. Harris: I think that the hon. Member for Runnymede and Weybridge (Mr. Hammond) would have been helped by leaving out his preface, which I am sure hon. Members will be bored with in a few weeks. It is not my intention to digress on to those matters. You will note, Mr. Deputy Speaker, that Liberal Democrats have been careful not to rise to provocation from other hon. Members.
      I understand the point that the hon. Member for Runnymede and Weybridge makes—that there is no single figure, but there will be ranges. We would like an undertaking from the Government that they will do their best to put their research capabilities to the task of giving a range, from zero to what the extra cost will be for each individual car insurance payer because of the charges. What is certain is that £160 million means nothing to people in terms of what they pay on their car insurance. The range of costs that the hon. Gentleman talks about—from zero to £20—would mean something.
      I think that hon. Members on both sides of the House accept that it would be more sensible to have those figures collected in an orderly way, rather than hearing scare stories from the insurance industry, the AA or political parties of any persuasion about what those costs will be.
      I return to my original proposition: it is important not only that the Government should be open about the amount of income that is raised by the measure—I accept the Minister's assurances on that—but that it be clear to individual taxpayers, drivers, voters and patients how much the Government's decision not to use this opportunity to abolish these indirect charges is costing them. I still look to the Minister for advice on that point. However, even if he is unable to give me any help, it is not our intention to divide the House on the matter.
      Mr. Hammond: I am happy to take what the Minister said at face value and to accept his good intentions.
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      However, we will look to ensure that the data is made available as quickly as the technology used by the compensation recovery unit allows.
      Mr. Hutton indicated assent.
      Mr. Hammond: The Minister nods. If we can accept that there is a genuine intention by the Government to make that data available regularly as fast as possible, we will be satisfied. I thank the Minister for that assurance.
      Mr. Hutton: I can give the hon. Member for Runnymede and Weybridge the assurance that he seeks.
      Dr. Harris: I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    Clause 3

      INFORMATION CONTAINED IN CERTIFICATES
      Dr. Harris: I beg to move amendment No. 2, in page 3, line 43, leave out '2nd July 1997' and insert '1st April 1998'.
      I am sure that the House is aware that the amendment is the last to be considered at this stage of the Bill. It seeks to right an injustice. It would leave out 2 July 1997 and insert 1 April 1998 as the date for which the charges will apply for in-patient treatment—and it should be out-patient treatment as well.
      The Government have defended 2 July 1997 as the date from which the charges will apply on the basis that that was when the Chancellor of the Exchequer first said that the Government were going indirectly to raise additional money for the NHS from people, through their car insurance. Presumably, they thought that insurance companies could make provision to weight their insurance premiums accordingly from 2 July 1997, so that the extra income that was raised through the Bill could be collected from their customers through increased insurance premiums; that is the logical approach that one might imagine the Government were taking.
      If that is the case, surely the Government must accept that there will be some lag time before the insurance industry is able to adjust to the more efficient way in which the Government are collecting the charge, and the increased amount of charge that the Government are collecting.
      I think that hon. Members on both sides of the House will recognise that it would have been impossible for someone to change his car insurance premium on 2 July 1997 after he heard that car insurance premiums might be affected from 2 July 1997. The insurance industry has said reasonably that costing the effects of the measure outlined briefly by the Chancellor on 2 July 1997 might take about three months. Logically, assuming that insurance renewals come due evenly throughout the year, another six months would elapse before, on average, insurance companies were able to reclaim, or to build into their costing, the effect of the more efficient collection of charges—and, indeed, a higher overall collection of charges. That is why, by simple arithmetic, 1 April 1998 has been chosen by the Liberal Democrats as the date on which the new tariff should apply.

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      In Committee, we looked at 1 April 1999, so that everyone would be able to see car insurance premiums increase as the insurance industry adjusted to the new situation; but following debate in Committee, we felt that, on Report, a compromise of 1 April 1998 would be fair. It would not be seen retrospectively to penalise those insurance companies that were either no longer in a position to seek to redress the losses that they will make because of the new legislation and the Government's failure to build in a time lag, or that felt that they were unable to make provision in the marketplace to make up for the loss of income from premiums to pay the charges to which they would be due.
      Can the Minister defend the date of 2 July 1997 on any basis other than the one that he gave in Committee? Will he not recognise that even a fast-acting insurance industry that accepts the Bill must have some time to adjust, so that it does not penalise those members of the industry that are not selling insurance, and does not seek to reclaim old debts by stacking the insurance premiums for new customers over and above those who were lucky enough to reinsure just before 2 July 1997.
      3 pm
      Mr. Hammond: Conservative Members are always concerned about retrospection in legislation. From Second Reading and from reading the debates in Committee—I was not privileged to be a member of the Standing Committee that considered the Bill—the only argument that has been advanced for setting the start date at 2 July 1997 is that that is the day on which the Chancellor announced his intention to legislate.
      I submit that, announcing an intention to do something, is not the same as doing it, especially when it relates to parliamentary legislation. Businesses should not be required to change their patterns of operation or, in some cases—in this instance it may be a relatively minor issue—make major changes to their businesses, on the basis of an announced intention by the Government of the day. That could have pernicious and unfortunate effects if it were carried into other areas.
      We at least maintain the fiction that Government proposals are subject to scrutiny by both Houses of Parliament and to amendment during that process. The Government, and the Minister who is with us today, maintain the fiction that the Government listen attentively to the points raised in Committee and will consider any worthwhile amendments. It is perhaps not surprising that substantial amendments are not often accepted in Committee. The suggestion that, once the Chancellor or some other such estimable person has announced an intention to do something that requires legislation, everybody in the country should drop tools and act as if it were already the law of the land, displays a tremendous arrogance. It displays the Government's arrogant attitude towards the legislative process.
      Even if the industry should have responded immediately to the announcement by so great a person as the Chancellor, by its very nature, the insurance industry could not have adjusted its prices immediately to take account of the additional effective burden being imposed upon it. I do not like to second guess the Minister, but no doubt he will say that the charges were always in
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      place and, in theory, could always have been collected. However, it is an essential part of the Government's argument for the Bill that they were not collected. It is beyond doubt that a reasonable commercial organisation will base its behaviour on what is happening and what will happen in the world rather than on what might be theoretically capable of happening.
      Humble Back-Bench Members—Ministers have the privilege of being driven around—will be familiar with the process of purchasing motor insurance for themselves. They will know that, customarily, it is done on an annual basis. Indeed, annual motor insurance is the best deal available because cover for shorter periods tends to be more expensive. On 2 July, any insurance company faced with the Chancellor's announcement, would have had a portfolio of current motor insurances, some of which might have had only one day to run and some of which might have had up to 364 days to run. It would be impossible for an insurance company to respond equitably to an increased burden of costs imposed upon it by the Government on the day that the announcement is made, even leaving aside the question of whether business should feel obliged to respond immediately to a mere announcement of an intention to legislate.
      When I say that an insurer would be unable to respond equitably, I mean that the insurance company needs to ensure that the relevant insured persons bear the additional cost of the measure. Inevitably, the only action open to an insurer will be to increase the premiums on renewal from the date of the announcement. That means that those who, by definition, are not covered for some part of the first year after the announcement, will gradually be forced to pay the additional cost of meeting the unrecovered portion of the extra premiums that that company would have charged had it issued policies—there are no such policies in the United Kingdom—that would enable it to make immediate changes and collect supplementary premiums from it policyholders.
      The Liberal Democrat amendment appears to be illogical. The date mentioned should be 2 July 1998, the date by which all annual motor policies—the vast majority of policies—in force on 2 July 1997 would have fallen due for renewal. It would have been more appropriate for the amendment to have proposed the date of 2 July 1998 or a date after the Bill is enacted.
      I note from the briefing presented by the Association of British Insurers that it supports the Liberal Democrat amendment. I suspect that, behind that lies the belief that something is better than nothing and that it is seeking to limit the damage done to the business by the element of retrospection involved in a start date of 2 July 1997.
      Going beyond the motor insurance business, an important point of principle for the insurance industry is at stake. The industry operates on the basis of actuarial calculations of risks faced during the insured period. It would be a serious matter for the insurance industry in its broadest sense if the Government took to introducing legislation which impacted on the costs of that industry and which took effect from the date of announcement, notwithstanding the fact that, by its very nature the insurance industry needs a lead time in which to levy additional charges in the form of increased premiums on its customers. That would leave insurers facing risks that they had not taken into account when setting their premiums for a period up to one year for motor insurance or even longer for other forms of insurance.

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      A further anomaly can be seen in the treatment of the Motor Insurers Bureau. Under the Bill as currently drafted, the Motor Insurers Bureau will have this charge imposed upon it on a date after the Bill has become an Act. I accept that it may not have been clear at the time of the Chancellor's announcement that the Motor Insurers Bureau was to be included in the scope of the measure. For the Government to be logical and consistent, however, they should now be saying that the start date for the bureau should be the date on which it first became publicly recorded that the bureau would be subject to the charges under this Act.
      Either commercial insurance companies should benefit, as the Motor Insurers Bureau will, from a start date after the Bill's passage, or the Motor Insurers Bureau should be treated the same as insurance companies. If the latter option were chosen, the start date should be not 2 July 1997—I accept that the Chancellor did not announce on that date that the provisions would be extended to the bureau—but 8 December 1998, which, as far as I can determine, is the date on which Ministers first announced in the House that the provisions would extend to the Motor Insurers Bureau. Is the Minister able to deduce any logic in applying a seemingly entirely arbitrary start date to the Motor Insurers Bureau?
      I do not expect for one moment that the Government will accept amendment No. 2, but the issue of start dates and retrospection is worthy of reconsideration. I ask the Minister to assure the House that he will examine the issues that have been raised, not only as a means of tidying up the legislation but of addressing an important issue of principle that may have greater implications for the insurance industry in the future. It would be unfortunate if the Bill set a precedent of retrospection which may have much more serious consequences in the future. I hope that Ministers may yet decide that, in the other place, they want to tidy up that part of the Bill.
      Mr. Hutton: The Government have already very carefully considered all those issues of principle. We believe that the arrangements that we have established in the Bill, and the way in which we plan to implement them, are the fairest and most sensible way of proceeding. The entire purpose of the exercise is to ensure that the national health service properly recovers the costs of treating road accident victims, and that has always been the principle behind the legislation. We are simply ensuring that that principle—which has been accepted in the House for 70 years—operates in practice. The beneficiaries of the arrangements will be the NHS and those who use it, our constituents.
      A significant extra sum will be collected for the NHS because of our proposed arrangements. The fundamental reason why we cannot accept amendment No. 2 is that it would strike at the very heart and purpose of the Bill, by denying the NHS significant new resources for a further considerable time. We are not prepared to allow that to happen.
      Sir Robert Smith rose—
      Mr. Hutton: I shall not give way to the hon. Gentleman.
      The hon. Member for Runnymede and Weybridge (Mr. Hammond) made it sound as though our announcement on 2 July was made in an insignificant
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      place. It was not. The announcement was made in the House, during the Chancellor's Budget statement. In such circumstances, it was therefore perfectly reasonable to say to the insurance industry, "You have been given sufficient notice of our intention to proceed on those lines." That is our view.
      Sir Robert Smith rose—
      Mr. Hutton: I shall not give way.
      The Government are therefore unable to give the assurance sought by the hon. Member for Runnymede and Weybridge—that we might review the operation of that aspect of the Bill. We do not intend to do so.
      Mr. Hammond: Will the Minister give way?
      Mr. Hutton: With very great respect, we need to make some progress. The issues have already been discussed in Standing Committee, and hon. Members are anxious to conclude the proceedings.
      The hon. Member for Runnymede and Weybridge also mentioned the Motor Insurers Bureau. The point is that, for the first time, the MIB is being introduced into the arrangements, which is a significant change. We have therefore decided to propose the arrangements outlined in the Bill. As it is a new departure, we believe that our proposed arrangements are the appropriate and most sensible way of proceeding.
      Our argument is clear and consistent. Our arrangements are sensible and will guarantee maximum income for the NHS, which is what we want to ensure. We cannot accept the Liberal Democrats' amendment.
      3.15 pm
      Dr. Harris: The Minister's answer was entirely unsatisfactory, as it did not deal with the points that I made or the points that were made so clearly and precisely by the hon. Member for Runnymede and Weybridge (Mr. Hammond). It is not adequate for the Government simply to say, "We're not going to be fair to the insurance industry. We'll be quasi-retrospective about it, because we want to maximise income." The issue is not one of income maximisation. If it were, why do we not simply set unfair higher fees, which would be another way of maximising income?
      I listened very carefully to every word that the Minister said. At no point did he address the substantive issue of dates; indeed, no date other than 2 July passed his lips. Our amendment to change the date on which the changes will apply will not strike at the Bill's "heart and purpose" but merely create the appropriate date on which the changes should apply. It is difficult for me to be persuaded by the Government's argument if they do not deal with the substantive points that have been made.
      I should like to know whether the official Opposition feel that the Minister's reply dealt with the arguments that they made. Merely reciting the Bill's purpose is not a sufficient way of debating significant concerns about retrospectivity. It is a matter of fairness. The Government of course want to maximise income, but if that is the only principle they are pursuing, they will be riding roughshod over the principle of natural justice.

      1065
      As the Minister has not addressed the substantive issues raised by me and the hon. Member for Runnymede and Weybridge, the Liberal Democrats shall press the amendment to a vote. The hon. Member for Runnymede and Weybridge has just finished making a very clear speech, which the Minister entirely failed to answer. It is therefore incumbent on Conservative Members to put their votes where they mouths are, and not continue to abstain in Divisions on substantive legislation simply because they want to spend more time on Thursday afternoons shoring up their constituencies. We did not change the hours of the House so that they could abstain in Divisions, as they did in the previous one.
      It is still mid-afternoon, and Liberal Democrat Members are keen to engage the Government in debate. When I press the amendment to a Division—as I shall if the Minister has nothing further to say—I hope that Conservative Members will support us with their votes and not only with their words.
      Mr. Hammond rose—
      Mr. Deputy Speaker: Order. I should tell the hon. Member for Runnymede and Weybridge (Mr. Hammond) that the tradition in the House is that the hon. Member who moved the amendment should be the last to speak to it, so that he or she may be able to withdraw it.
      Mr. Hammond: I should like merely to respond to the point that the hon. Member for Oxford, West and Abingdon (Dr. Harris) made—
      Mr. Deputy Speaker: Perhaps the hon. Gentleman can do so on another occasion.
      Question put, That the amendment be made:—
      The House divided: Ayes 24, Noes 225.

      Division No. 44]

      3.18 pm

      AYES

      Allan, Richard

      Livsey, Richard

      Ashdown, Rt Hon Paddy

      Moore, Michael

      Beith, Rt Hon A J

      Morgan, Alasdair (Galloway)

      Brand, Dr Peter

      Öpik, Lembit

      Breed, Colin

      Rendel, David

      Burnett, John

      Russell, Bob (Colchester)

      Burstow, Paul

      Sanders, Adrian

      Cotter, Brian

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

      Foster, Don (Bath)

      Taylor, Matthew (Truro)

      George, Andrew (St Ives)

      Tyler, Paul

      Harris, Dr Evan

      Heath, David (Somerton & Frome)

      Tellers for the Ayes:

      Hughes, Simon (Southwark N)

      Mr. Tom Brake and

      Kennedy, Charles (Ross Skye)

      Mr. Phil Willis.

      NOES

      Abbott, Ms Diane

      Bayley, Hugh

      Adams, Mrs Irene (Paisley N)

      Begg, Miss Anne

      Ainsworth, Robed (Cov'try NE)

      Benn, Rt Hon Tony

      Allen, Graham

      Bennett, Andrew F

      Anderson, Donald (Swansea E)

      Benton, Joe

      Anderson, Janet (Rossendale)

      Berry, Roger

      Armstrong, Ms Hilary

      Best, Harold

      Ashton, Joe

      Betts, Clive

      Austin, John

      Blizzard, Bob

      Barnes, Harry

      Blunkett, Rt Hon David

      1066

      Borrow, David

      Hodge, Ms Margaret

      Bradley, Keith (Withington)

      Hoey, Kate

      Bradley, Peter (The Wrekin)

      Home Robertson, John

      Bradshaw, Ben

      Hopkins, Kelvin

      Brown, Russell (Dumfries)

      Hurst, Alan

      Buck, Ms Karen

      Hutton, John

      Butler, Mrs Christine

      Iddon, Dr Brian

      Campbell, Mrs Anne (C'bridge)

      Jackson, Helen (Hillsborough)

      Campbell, Ronnie (Blyth V)

      Jenkins, Brian

      Caplin, Ivor

      Jones, Helen (Warrington N)

      Casale, Roger

      Jones, Ms Jenny (Wolverh'ton SW)

      Caton, Martin

      Jones, Martyn (Clwyd S)

      Cawsey, Ian

      Jowell, Ms Tessa

      Chapman, Ben (Wirral S)

      Keeble, Ms Sally

      Chaytor, David

      Keen, Ann (Brentford & Isleworth)

      Chisholm, Malcolm

      Kelly, Ms Ruth

      Clapham, Michael

      Kennedy, Jane (Wavertree)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Khabra, Piara S

      Clarke, Charles (Norwich S)

      Kilfoyle, Peter

      Clarke, Tony (Northampton S)

      King, Andy (Rugby & Kenilworth)

      Clelland, David

      King, Ms Oona (Bethnal Green)

      Coaker, Vernon

      Kingham, Ms Tess

      Coffey, Ms Ann

      Ladyman, Dr Stephen

      Coleman, Iain

      Laxton, Bob

      Colman, Tony

      Lepper, David

      Cook, Frank (Stockton N)

      Leslie, Christopher

      Cooper, Yvette

      Lewis, Ivan (Bury S)

      Corston, Ms Jean

      Linton, Martin

      Cox, Tom

      Livingstone, Ken

      Cranston, Ross

      Lloyd, Tony (Manchester C)

      Cryer, Mrs Ann (Keighley)

      Love, Andrew

      Cryer, John (Hornchurch)

      McAllion, John

      Cummings, John

      McAvoy, Thomas

      Cunningham, Jim (Cov'try S)

      McCabe, Steve

      Dalyell, Tam

      McDonagh, Siobhain

      Darvill, Keith

      Macdonald, Calum

      Davies, Rt Hon Denzil (Llanelli)

      McDonnell, John

      Davies, Geraint (Croydon C)

      McGuire, Mrs Anne

      Davis, Terry (B'ham Hodge H)

      McIsaac, Shona

      Dean, Mrs Janet

      Mackinlay, Andrew

      Doran, Frank

      McNulty, Tony

      Drew, David

      McWalter, Tony

      Eagle, Angela (Wallasey)

      Mahon, Mrs Alice

      Eagle, Maria (L'pool Garston)

      Mallaber, Judy

      Efford, Clive

      Mandelson, Rt Hon Peter

      Ellman, Mrs Louise

      Marek, Dr John

      Etherington, Bill

      Marsden, Paul (Shrewsbury)

      Field, Rt Hon Frank

      Marshall, David (Shettleston)

      Fisher, Mark

      Martlew, Eric

      Fitzpatrick, Jim

      Merron, Gillian

      Fitzsimons, Lorna

      Michie, Bill (Shef'ld Heeley)

      Follett, Barbara

      Miller, Andrew

      Foster, Michael Jabez (Hastings)

      Moran, Ms Margaret

      Fyfe, Maria

      Morgan, Ms Julie (Cardiff N)

      Galloway, George

      Morley, Elliot

      Gapes, Mike

      Mullin, Chris

      Gardiner, Barry

      Murphy, Denis (Wansbeck)

      Gerrard, Neil

      Naysmith, Dr Doug

      Godman, Dr Norman A

      Norris, Dan

      Goggins, Paul

      O'Brien, Bill (Normanton)

      Gordon, Mrs Eileen

      O'Hara, Eddie

      Griffiths, Jane (Reading E)

      Olner, Bill

      Griffiths, Nigel (Edinburgh S)

      O'Neill, Martin

      Grocott, Bruce

      Organ, Mrs Diana

      Grogan, John

      Osborne, Ms Sandra

      Hall, Mike (Weaver Vale)

      Palmer, Dr Nick

      Hall, Patrick (Bedford)

      Pearson, Ian

      Hanson, David

      Perham, Ms Linda

      Heal, Mrs Sylvia

      Pickthall, Colin

      Healey, John

      Pike, Peter L

      Henderson, Doug (Newcastle N)

      Plaskitt, James

      Henderson, Ivan (Harwich)

      Pollard, Kerry

      Heppell, John

      Pope, Greg

      Hill, Keith

      Pound, Stephen

      Hinchliffe, David

      Prentice, Ms Bridget (Lewisham E)

      1067

      Prentice, Gordon (Pendle)

      Starkey, Dr Phyllis

      Prescott, Rt Hon John

      Steinberg, Gerry

      Prosser, Gwyn

      Stewart, David (Inverness E)

      Quin, Ms Joyce

      Strang, Rt Hon Dr Gavin

      Quinn, Lawrie

      Stringer, Graham

      Radice, Giles

      Stuart, Ms Gisela

      Rammell, Bill

      Sutcliffe, Gerry

      Rapson, Syd

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Raynsford, Nick

      Taylor, David (NW Leics)

      Reed, Andrew (Loughborough)

      Thomas, Gareth R (Harrow W)

      Robinson, Geoffrey (Cov'try NW)

      Timms, Stephen

      Rooker, Jeff

      Tipping, Paddy

      Ross, Ernie (Dundee W)

      Todd, Mark

      Ruane, Chris

      Touhig, Don

      Russell, Ms Christine (Chester)

      Turner, Dr George (NW Norfolk)

      Ryan, Ms Joan

      Twigg, Stephen (Enfield)

      Savidge, Malcolm

      Vaz, Keith

      Sawford, Phil

      Vis, Dr Rudi

      Sedgemore, Brian

      Wareing, Robert N

      Shaw, Jonathan

      White, Brian

      Sheldon, Rt Hon Robert

      Whitehead, Dr Alan

      Shipley, Ms Debra

      Wicks, Malcolm

      Simpson, Alan (Nottingham S)

      Williams, Rt Hon Alan (Swansea W)

      Skinner, Dennis

      Wood, Mike

      Smith, Rt Hon Andrew (Oxford E)

      Woolas, Phil

      Smith, Angela (Basildon)

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Tellers for the Noes:

      Smith, John (Glamorgan)

      Mr. Kevin Hughes and

      Soley, Clive

      Mr. Jim Dowd.

      Southworth, Ms Helen

      Question accordingly negatived.
      Order for Third Reading read.
      3.30 pm
      Mr. Hutton: I beg to move, That the Bill be now read the Third time.
      Today and in Committee we have had the opportunity to look carefully at the Bill and its purpose. We are trying to streamline, improve and manage more effectively the existing scheme for recovering the cost to the national health service of treating road traffic accident victims. We are determined to do that for a number of reasons that we have repeatedly spelt out during proceedings on the Bill.
      The NHS needs the extra resources that the scheme will provide, and the Bill is badly needed. It will free hospital staff from the burden of questioning patients when the care and treatment of those patients should be uppermost in everyone's mind. Patients will no longer be confused or worried about a scheme that does not affect them directly.
      It is worth emphasising that since the 1930s the insurance industry has had the primary obligation to meet the costs of treating road traffic accident victims. We want there to be no misunderstanding about the Bill.
      The scheme will raise a good deal of money for the NHS, not, as some hon. Members wanted, going to another tier of NHS administration—an outcome that the Liberal Democrats tried to secure in Committee—but going directly to hospitals, where it can be used to the immediate benefit of patients. In the overall scale of NHS finance, the amounts may not be great, but they are substantial injections to the budgets of the hospitals that stand to receive them and the sooner the Bill is enacted, the sooner the benefits will be received.
      A number of specific concerns have been raised and it would be helpful if I took the opportunity to set the record straight. We reject the accusation that we are imposing a
      1068
      new tax or a new charge. It is vital to remember that NHS charges can be recovered only when it has been recognised that the patient has a claim against another person in respect of his or her injuries. In such cases, insurers have always known that the victim is entitled to use and claim for private sector treatment if he or she so wishes. The insurer has no choice but to pay. However, insurers have largely escaped paying equivalent NHS charges simply because of the lack of a system for their recovery. The Bill will fundamentally address that by putting into place a new, effective, streamlined costs recovery system.
      There has also been concern about the new scale of charges. What is new about the Bill is the move towards recovering amounts more closely in line with the actual costs to the NHS. Many of the points made during scrutiny of the Bill have concerned the move to those new, higher costs and some unease has been expressed about their calculation and their future uprating. Much of that concern has been needless and has involved party political point scoring, primarily by the Liberal Democrats.
      The figures have been arrived at openly and honestly using information which is in the public domain and freely available. Our costs have been derived from work undertaken by the Transport Research Laboratory and published in its research paper 272, with co-operation from the police, the NHS and the Department of Social Security compensation recovery unit. The calculations and source data were all contained in the regulatory appraisal—we have nothing to hide.
      We have rightly rejected calls for reports to be filed at set intervals on the tariff, the amounts collected and so on. The Bill is no different from any other—including all the previous road traffic measures which have governed NHS charge recovery. Its subordinate legislation, which I understand is the source of some concern to hon. Members, will come before the House in the normal fashion and hon. Members will have every opportunity to question and discuss planned changes. In response to a direct question from the hon. Member for Runnymede and Weybridge (Mr. Hammond) today, I made it quite clear that it is the Government's intention to assist hon. Members in discussing the impact of the Bill and the new arrangements that we are introducing and to make sure that all hon. Members have access to the most up-to-date, relevant and timely information to allow them to reach their own decisions about the operation of the new arrangements.
      Some concern has been expressed about the effect of the changes on the motorist. Much of it has been based on ill-informed speculation. Large insurers have gone on record as saying that the measure probably will not affect their premiums, yet the scaremongers persist. Let me make it quite clear today that we have calculated and openly published our estimate of what the scheme would mean if the total NHS charges were averaged out and spread evenly among all drivers. If that were the way in which the insurance industry raised the charges, we estimate that the effect would be an increase of 2 to 3 per cent., or £6 to £9 on the average premium.
      Mr. Hammond: I understand what the Minister is saying, but does he accept that the costs will not be averaged out and will affect some motorists more seriously than he suggests?
      Mr. Hutton: The hon. Gentleman has tended to anticipate my remarks and he has done so again.

      1069
      We expressed the figures in those terms to make it quite clear that under our insurance system, drivers who cause accidents carry a greater risk and pay higher premiums. If there were an effect on premiums, it would be likely that careless drivers would contribute most.
      The allegation by some Opposition Members that the Bill would affect rural motorists as a specific group of drivers is completely unfounded. The premiums will reflect risk. Drivers at high risk will pay more. Safe drivers should face no increase.
      Sir Robert Smith: Will the Minister give way?
      Mr. Hutton: No.
      For those reasons and many others, this is a sensible and sound Bill. It will assist the NHS in recovering the costs of treating road traffic accident victims. It will provide additional resources to the national health service. It is what our constituents want. The money will benefit the hospitals in our constituencies. I endorse the Bill and urge the House to support it on Third Reading.
      3.37 pm
      Mr. Hammond: I should make it clear at the outset, as my right hon. and hon. Friends have done during the Bill's progress, that we do not object in principle to the Government's purpose in introducing the legislation. Indeed, I welcome the shift in the Labour party's thinking that it represents.
      The Minister is sheltering—as Ministers have done before—behind the claim that the measure represents no new charge. That is disingenuous. The Minister has made it quite clear that the Bill will increase tenfold the yield from road traffic accident victims. It is currently £15 million or £16 million. Technically I am sure that the Minister is right to say that it is not a new charge, but the impact on the tax and charge-paying public will be that of a new charge. One cannot increase something tenfold and then say that nothing has changed.
      To say that, because the charge was there in theory but was not used in practice, starting to use it is a mere technicality and not a change in policy is similar to saying that because we have had nuclear weapons for 50 years, suddenly starting to use them would not be a major decision or a major change.
      The Government have also sought to gain some comfort from the fig leaf of indirect charging. I understand the political attractiveness of that, but the fact that insurance companies will pay the NHS charges and then recover the cost through premiums to motorists is not intellectually distinct from directly charging users of the NHS. Worse, perhaps, is the fact that taking the fig leaf and using it to protect themselves has led the Government to set their face against the logic of the Bill, and the way in which, quite possibly, that logic must be extended.
      The Bill represents an important turning point. The Labour party has crossed the Rubicon with this measure. After years of arguing against charges, the Labour Government have used precious legislative time not to abolish a charge that was yielding very little, but to beef it up so that it produces substantial sums. The Government
      1070
      could have abolished the charge in the same amount of legislative time that it has taken to make it effective and productive of large amounts of revenue. It appears that Labour has overcome its objection to the principle of charges.
      I do not seek to beat the Government over the head, as this is a small but important victory in the battle to end the dominance of dogma in their approach to the health service, but to begin the rational debate, for which my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) and I have called—as have the Liberal Democrats today—about how to fund the voracious appetite of a modern health service for resources.
      The Government and the official Opposition are both publicly committed to year-on-year, real-terms increases in spending on the NHS from general taxation. That is not an issue. Except for a few diehards—who are usually to be found, although not today, below the Gangway on the Government Benches—and the Liberal Democrats, almost no one now believes that we still live in a era where taxes can be jacked up endlessly to meet the demands of the NHS.
      Notwithstanding the commitment to year-on-year, real-terms increases—and whether it is 0.5 per cent. more over the life of this Parliament, as the Government are now delivering, or 0.5 per cent. less is very interesting, but makes no real or meaningful impact on the resource constraints facing the NHS—the fact remains that a health service that is funded exclusively from general taxation in an environment of broadly low tax, both domestically and internationally, will remain heavily resource-constrained.
      My right hon. and hon. Friends and I argue that without compromising or eroding in any way that commitment to year-on-year rises in spending from general taxation on our health care system, the system in its totality needs more resources than general taxation is likely to be able to provide. To address that issue, we must think laterally. If the Bill signals the Government's willingness to consider any source of funding for the NHS, it is a small but important start to the process.
      The basis for considering any method of providing additional funds for health services must be the test of whether it is fair, equitable and sensible. It might surprise the Minister to learn that, for the most part, we believe that the Bill passes that test. It is sensible to introduce it and to put on the statute book the measures that the Minister proposes.
      The principal area where, in our opinion, it does not pass the test—and the principal concern that we have expressed throughout the Bill's passage—is the discriminatory targeting of the motorist. We have seen the interesting spectacle of two Labour demons colliding in the Bill; the taboo on NHS charges has run smack into the desire to clobber the motorist at every opportunity. The charge on the motorist to be introduced by the Government is regressive, and has an anti-rural basis. It comes on top of the £9 billion of extra taxes that the Chancellor is imposing on the motorist over the lifetime of this Parliament.
      In effect, the motorist is being double-taxed. He is being asked to pay more than his fair share into the Consolidated Fund of general taxation through the dramatic increases in motoring taxes proposed by the Government. He is then being asked to pay again, on a discriminatory basis, for his use of the NHS.

      1071
      The Government have done something else—they have accepted the principle of insurance as a basis of spreading the burden of costs of health care. Indeed, they are sheltering behind the existence of compulsory motor insurance as an argument for the motorist being a unique category. Everybody would agree that the Government would never have considered introducing a £10,000 cap on the charge to be levied on an individual without any means test if the individual himself had had to pay the charge, rather than its being paid by his insurance company and the very considerable costs involved being spread across all motorists through the mechanism of insurance premiums.
      There are other areas where those treated on the NHS—often at very great expense—are insured. It is not logical for the Government to ignore that and say that the motorist is in a unique category and everybody else is different. Some poor, rural motorists may find it odd that they are being targeted to pay the additional charges when people returning to the United Kingdom from expensive skiing holidays with broken arms or in need of complex knee surgery—with insurance companies that have paid for their treatment in Switzerland, France or Italy—have their often very expensive treatment here on the NHS, without any requirement at all for them, or more precisely their insurers, to contribute as motorists are being asked to contribute.
      Ministers have often said that the principle of equity in the NHS is important, and Labour Back Benchers support that. One is bound to ask, "If motorists, then why not also other insured, compensated victims who need NHS treatment?" I did not know much about the operation of the compensation recovery unit until I started to look at the provisions of the Bill. I have learnt that one of the unit's main functions is to recover benefit that has been paid out in cases where, for example, employers have paid compensation after industrial accidents. If benefit is clawed back by the compensation recovery unit on behalf of the Treasury—where it has been paid out to the victim of an accident who, subsequently, has been reimbursed or compensated by the insurer of the employer—why should the NHS charges that that person has incurred, or has imposed upon the system, not similarly be recovered from insurers?
      I cannot understand the logic of the Government's position. They are saying that someone who carries compulsory motor insurance must be expected to pay for the cost to the NHS caused by treating third-party victims, while someone who carries compulsory employers' liability insurance need not reimburse the cost of NHS treatment carried out following an industrial accident or another insured risk—while the insurer must reimburse the cost of the benefits paid out. Where is the logic? There is none—it is as simple as that.
      It is unfortunate that the Government have closed their mind to the logic, as that has led to a clearly inequitable outcome, with motorists being the victims. Effective charging is being introduced for one group of the population only, and that charging is being introduced without any form of means testing. Undoubtedly, if the Government were to propose any wider form of charging, they would be looking at the ability of those charged to pay. In this case, everyone's insurance premiums will go up. As Liberal Democrat Members noted, the effect will be highly regressive, and I believe that it will be especially burdensome in rural areas.
      1072
      The Government have repeatedly assured the House that the proceeds of the charges will constitute extra money and be a little bonus for the NHS hospitals involved. I do not believe that. The original statement of the intention to make the charges effectively collectible was made by the Chancellor in his 1997 Budget. It is not credible to suggest that the revenue to be raised in that way had not been factored into the Government's calculations in deciding what total Treasury spending on the NHS should be. Surely the Chancellor must have considered that revenue as part of the wider equation in setting the Department of Health budget in aggregate.
      I am concerned about the impact on individual health authorities. The measure will channel about £150 million from insurers to individual hospital trusts, but it is extremely unlikely that that money will be spread evenly, principally because the incidence of road accidents varies. Certain hospitals specialise in high-level trauma such as is often suffered in accidents, and hospitals near the motorway network routinely treat many accident victims. It is likely that the revenue will be heavily skewed towards such hospitals.
      In allocating money to individual health authorities, will the Government ensure that the revenue that a hospital trust receives as a result of the Bill will not be taken into account and used as a reason for reducing the overall allocation to the hospital's health authority from general taxation? I am tempted to suspect that, over time, the Department of Health will take into account the revenue streams flowing to hospitals that specialise in trauma when setting the allocation to the host health authority. At a disaggregated level the money from the charges could be used to reduce the receipts of the authorities involved.
      The Labour party used to recite almost as a mantra the slogan, "An NHS free at the point of need and funded out of general taxation". We have reaffirmed our commitment to a service that is free at the point of need and to increasing year on year the real-terms expenditure on that service from general taxation. Beyond that, we believe that there is a need to bring in additional resources by other means and that we should consider every option, provided that it is fair, equitable and sensible. There is an urgent need for an open debate on the subject.
      If the Bill represents a genuine transformation in Labour party attitudes—a rejection of stale dogma and a willingness to engage in constructive debate about how to feed the voracious appetite of our health services over and above the funding that can be found from general taxation—we welcome that as an important step forward.
      3.55 pm
      Sir Robert Smith: I did not intend to speak, but the Minister refused to take an intervention on a point that interested me. It is a pity that Ministers are not more willing to take interventions; if they were, that could speed up our proceedings. He seemed to be saying that the fact that a motorist pays a higher premium proves that he is a more dangerous driver than others. It would be more correct to say that the motorist comes from a category that insurance companies consider to be a higher risk. Young motorists can be perfectly safe drivers, but they are penalised with a higher premium because they come from a group that is seen to have a higher risk of causing accidents.

      1073
      The Bill will cause some drivers to pay considerably higher premiums because, as others have said, one cannot get something for nothing. If the Government are right, and the money can be delivered to the health service at no extra cost, why are they not aiming for a higher sum? If there is no cost to be met, they should be raising far more.
      On Second Reading, our health team made it clear that the Bill should be opposed on principle. Having heard the arguments in Committee, I feel even more strongly that it should also be opposed on Third Reading. I am disappointed by the Government's attitude to the concept of retrospective legislation and their inability to accept any compromise or meeting of ways. They insist that, because something has been announced by a Minister, it must, de facto, be assumed that it will become the law of the land. That is absurd if we are to continue to have a legislative process and a House of Commons.
      Other Departments have accepted amendments or compromises and agreed to introduce changes on Report or in another place, in response to concerns expressed in Committee or by groups outside. To say that, because insurance companies will have read in the newspapers that the Chancellor has declared that he wants to do something, it must be calculated, ipso facto, that that will definitely happen is a disgraceful way to treat the House and the country. The Chancellor has made other claims on which he has not delivered. He cannot have it both ways.
      It must be accepted that, until legislation has passed all its stages, the process of lobbying and the right to make changes continue to exist. In this Parliament, with such a large majority, the Government seem to have decided to close their ears to representation and they are telling the wider public that they do not want to hear their views because they do not plan to act on them.
      Someone planning an energy Bill in the previous Parliament would have been slightly put out by an increase in VAT on energy consumption, because the then Government were defeated in trying to pass such a measure. I hope that, in another place, perhaps with different Ministers and the more considered debate that is possible there, the Government will amend the Bill and make it less damaging.
      3.58 pm
      Mr. Syms: I have followed the Bill's progress on Second Reading and in Committee. The debate has been interesting and we have not always reached the expected conclusions. The Minister said that the legislation would be judged on whether it streamlined the process and created an improved, more efficient scheme. Certain aspects of the Bill will certainly improve the scheme. The abolition of the emergency treatment charge has been widely welcomed by Government and Opposition Members.
      Our earlier debate on whether the charge should remain for general practitioners or private hospitals was somewhat bedevilled by lack of information on both sides. We were not quite sure what was collected, who collected it or whether it was worth collecting. The Government said that they did not want to get rid of it because the GPs would be unhappy and some Opposition Members said that perhaps it was not worth having, but we did not have enough information to take the debate much further.
      1074
      As my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) said, there is a point of principle at stake, because the Government have gone for a group of insured people in order to raise money. Throughout debate on the Bill, we have asked whether the Government have started on a slippery slope that will lead to more charges for, perhaps, home owners or for people involved in skiing or other sporting accidents. The official Opposition have expressed concerns that the Bill will breach a principle, and consequently affect many people's lives.
      We support funding the national health service through general taxation and we believe that it should be free to those who use it. However, all Governments have to consider ways to supplement the health service's income and it has been an education to watch how quickly this Government have moved to try to raise money from private motorists. The Minister said that careless drivers would pay the charge, but, as the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) pointed out, the young pay higher insurance premiums than other drivers, as do certain categories of people with medical difficulties. The insurance companies determine those charges, but if—as most Conservative Members believe—the Bill leads to higher insurance premiums, some of those least able to afford the charges may be affected.
      In Committee, I raised the pot of gold argument. The Government have taken the credit for some £120 million to £160 million additional resources for the NHS, but they seemed to suggest that it would come from nowhere and not cost anyone because the charge was in place and the insurance companies were collecting it. However, as my hon. Friend the Member for Runnymede and Weybridge said, the money will have to come from somewhere, and we all know that it will come from charges by insurance companies on motorists. Motorists will pay an extra £120 million to £160 million, which will fund the NHS. That may not be a bad outcome, but the Government should be more open and acknowledge that motorists face an additional charge.
      We also raised the issue of retrospective legislation. On 2 July 1997, the Chancellor announced a charge, without giving any details. Even if an insurance company had rapidly decided that it wanted to recoup the charge, it would not necessarily have been able to do so. I hope that the Government will reconsider that issue.
      We have been accused of scaremongering, but we have pointed out that the money will have to come from somewhere. It will be raised by charging more to certain categories of motorists and some people will pay much more than they currently do. My hon. Friend the Member for Runnymede and Weybridge pointed out that we have to judge whether the Bill is a fair, equitable and sensible measure. Indeed, we are in favour of the Bill in principle, but the devil is in the detail. It is important that we have full scrutiny of the Bill's effect, and we must review the collection agency and its efficiency and effectiveness in collecting the charges. We must also review how the money is distributed to hospitals and health authorities.
      I was pleased by the assurances that the Minister gave during the Bill's progress that the Government did not want to hide statistics. When a new computerised system is set up, it is possible to arrange affairs so that information can be provided to Members of Parliament,

      1075
      and I am sure that the Minister will endeavour to achieve that. We have had an interesting debate and I look forward to hearing contributions from other hon. Members.
      4.4 pm
      Mr. Simon Hughes: We are coming to the end of proceedings on this short Bill and I am grateful to my hon. Friends the Members for Oxford, West and Abingdon (Dr. Harris) and for West Aberdeenshire and Kincardine (Sir R. Smith), who looked after our interests so diligently in Committee. On Second Reading, when we supported the Conservatives' reasoned amendment, we said that this measure was not the right way to raise money for the health service.

      When the Labour party came to office, it discovered a potential source of extra money for the NHS and, as the hon. Member for Runnymede and Weybridge (Mr. Hammond) said, it decided to make it produce more money—10 times more, an increase from £16 million to £160 million. However, we still do not know whether the Bill is an admission that the Government will look openly at the funding of the health service or a one-off response to an opportunity to raise more money by increasing an existing charge. The Government said nothing about such a move in their manifesto or during the general election, but it will mean that some people will make an additional contribution to the health service.
      On Second Reading, we said that we did not like the Bill but that we would see what happened to it in Committee. I was not a member of the Committee, but I understand that proceedings there followed the same pattern as today's. For example, we made the sensible proposition, in new clause 1, that we should abolish the system under which general practitioners, such as my hon. Friend the Member for Isle of Wight (Dr. Brand), may collect money directly from someone involved in a road accident. General practitioners do not like to do that and most of them do not do so. We suggested that GPs should be paid for that service in the same way that they are paid for emergency treatment. That is a sensible proposition, but we have seen no movement in our direction by the Minister.
      We also argued, with support from the Conservatives, that the legislation should not be retrospective. I am a lawyer by training and I have always sought to defend people against retrospective legislation. Whether its effect is big or small, the principle is wrong. We suggested that the date should be changed, but the Government have not conceded the point. The only concession made was on the need for clearer statistics, although the Minister was not very helpful when he was asked by my hon. Friends how many non-NHS and NHS doctors had said that they were in favour of the system. The Minister said that he had received representations, but he would not tell us how many.
      The core issue is the financing of the health service. We will vote against Third Reading of the Bill because we cannot have uncertainty about how money for the NHS will be raised. It will be the Government's fault if, in the future, different categories of people are required to make contributions to the health service because they have been injured when undertaking certain activities. There is no difference in principle between people who drive and are involved in an accident paying into the health service through their insurance companies and
      1076
      people who go on sporting holidays and are injured—like my hon. Friend the Member for Montgomeryshire (Mr. Öpik), when he went paragliding—doing so. If we extend the principle behind the Bill, there is no reason why my hon. Friend should not pay for his treatment. By the same token, people who are injured in their local park, at their place of work or climbing up a ladder at home should have to pay. There is no logic in charging only those involved in road accidents because they could have been charged in the past. People do not believe the Government's claims on that point.
      I am in favour of more funds for the health service, but I would also like to see a public debate about how to raise them and the Government have not so far responded to that. As my hon. Friend the Member for West Aberdeenshire and Kincardine said, we feel less reassured after proceedings on the Bill than we did before. We have supported from the beginning the Government's uncontroversial proposals to abolish the emergency treatment, but the Bill contains much more.
      We shall once again try, therefore, to defeat the Bill, this time on Third Reading. It is, I expect, unlikely that we shall succeed, but if we do not try, we cannot succeed. Our consolation is that, whatever the hon. Member for Bolsover (Mr. Skinner) may think, we have a two-chamber Parliament. The other House has no Labour majority, and it contains many independent people of expertise and knowledge who may amend the Bill. We hope that the Bill will be amended in the way that we have proposed. The Government have not done so, and, no matter how unsupportable their arguments have been, they have remained resolute in opening the door to charges in the health service that have never been part of rational debate. We ask the House to reject the Bill, and to reconsider health service charging in another place, at another time and in a more comprehensive way.
      Question put, That the Bill be now read the Third time:—
      The House divided: Ayes 228, Noes 24.

      Division No. 45]

      [4.10 pm

      AYES

      Abbott, Ms Diane

      Campbell, Mrs Anne (C'bridge)

      Adams, Mrs Irene (Paisley N)

      Campbell, Ronnie (Blyth V)

      Ainsworth, Robert (Cov'try NE)

      Casale, Roger

      Allen, Graham

      Caton, Martin

      Anderson, Donald (Swansea E)

      Chapman, Ben (Wirral S)

      Anderson, Janet (Rossendale)

      Chaytor, David

      Armstrong, Ms Hilary

      Chisholm, Malcolm

      Ashton, Joe

      Clapham, Michael

      Austin, John

      Clark, Dr Lynda (Edinburgh Pentlands)

      Barnes, Harry

      Clarke, Charles (Norwich S)

      Bayley, Hugh

      Clarke, Tony (Northampton S)

      Begg, Miss Anne

      Clelland, David

      Benn, Rt Hon Tony

      Coaker, Vernon

      Bennett, Andrew F

      Coffey, Ms Ann

      Benton, Joe

      Coleman, Iain

      Berry, Roger

      Colman, Tony

      Best, Harold

      Cook, Frank (Stockton N)

      Betts, Clive

      Cooper, Yvette

      Blizzard, Bob

      Corbyn, Jeremy

      Borrow, David

      Corston, Ms Jean

      Bradley, Keith (Withington)

      Cox, Tom

      Bradley, Peter (The Wrekin)

      Cranston, Ross

      Bradshaw, Ben

      Cryer, Mrs Ann (Keighley)

      Brown, Russell (Dumfries)

      Cryer, John (Hornchurch)

      Buck, Ms Karen

      Cummings, John

      Butler, Mrs Christine

      1077

      Cunningham, Jim (Coy'try S)

      Jowell, Ms Tessa

      Dalyell, Tam

      Keeble, Ms Sally

      Darling, Rt Hon Alistair

      Keen, Ann (Brentford & lsleworth)

      Darvill, Keith

      Kelly, Ms Ruth

      Davies, Rt Hon Denzil (Llanelli)

      Kennedy, Jane (Wavertree)

      Davies, Geraint (Croydon C)

      Khabra, Piara S

      Davis, Terry (B'ham Hodge H)

      Kilfoyle, Peter

      Dean, Mrs Janet

      King, Andy (Rugby & Kenilworth)

      Doran, Frank

      King, Ms Oona (Bethnal Green)

      Drew, David

      Kingham, Ms Tess

      Eagle, Angela (Wallasey)

      Ladyman, Dr Stephen

      Eagle, Maria (L'pool Garston)

      Laxton, Bob

      Efford, Clive

      Lepper, David

      Ellman, Mrs Louise

      Leslie, Christopher

      Etherington, Bill

      Lewis, Ivan (Bury S)

      Field, Rt Hon Frank

      Linton, Martin

      Fisher, Mark

      Livingstone, Ken

      Fitzpatrick, Jim

      Lloyd, Tony (Manchester C)

      Fitzsimons, Lorna

      Love, Andrew

      Flynn, Paul

      Follett, Barbara

      McAllion, John

      Foster, Michael Jabez (Hastings)

      McAvoy, Thomas

      Fyfe, Maria

      McCabe, Steve

      Galloway, George

      McDonagh, Siobhain

      Gapes, Mike

      Macdonald, Calum

      Gardiner, Barry

      McDonnell, John

      Gerrard, Neil

      McGuire, Mrs Anne

      Godman, Dr Norman A

      McIsaac, Shona

      Goggins, Paul

      Mackinlay, Andrew

      Gordon, Mrs Eileen

      McNulty, Tony

      Griffiths, Jane (Reading E)

      McWalter, Tony

      Griffiths, Nigel (Edinburgh S)

      Mahon, Mrs Alice

      Grocott, Bruce

      Mallaber, Judy

      Grogan, John

      Mandelson, Rt Hon Peter

      Hall, Mike (Weaver Vale)

      Marek, Dr John

      Hall, Patrick (Bedford)

      Marsden, Paul (Shrewsbury)

      Hanson, David

      Marshall, David (Shettleston)

      Heal, Mrs Sylvia

      Marshall—Andrews, Robert

      Healey, John

      Martlew, Eric

      Henderson, Doug (Newcastle N)

      Merron, Gillian

      Henderson, Ivan (Harwich)

      Michie, Bill (Shef'ld Heeley)

      Hill, Keith

      Miller, Andrew

      Hinchliffe, David

      Moran, Ms Margaret

      Hodge, Ms Margaret

      Morgan, Ms Julie (Cardiff N)

      Hoey, Kate

      Morley, Elliot

      Home Robertson, John

      Mullin, Chris

      Hoon, Geoffrey

      Murphy, Denis (Wansbeck)

      Hopkins, Kelvin

      Naysmith, Dr Doug

      Hurst, Alan

      Norris, Dan

      Hutton, John

      O'Brien, Bill (Normanton)

      Iddon, Dr Brian

      O'Brien, Mike (N Warks)

      Jackson, Helen (Hillsborough)

      O'Hara, Eddie

      Jenkins, Brian

      Olner, Bill

      Jones, Helen (Warrington N)

      O'Neill, Martin

      Jones, Ms Jenny (Wolverh'ton SW)

      Organ, Mrs Diana

      Jones, Marlyn (Clwyd S)

      Osborne, Ms Sandra

      Palmer, Dr Nick

      Pearson, Ian

      1078

      Perham, Ms Linda

      Smith, John (Glamorgan)

      Pickthall, Colin

      Soley, Clive

      Pike, Peter L

      Southworth, Ms Helen

      Plaskitt, James

      Spellar, John

      Pollard, Kerry

      Starkey, Dr Phyllis

      Pope, Greg

      Steinberg, Gerry

      Pound, Stephen

      Stewart, David (Inverness E)

      Powell, Sir Raymond

      Strang, Rt Hon Dr Gavin

      Prentice, Ms Bridget (Lewisham E)

      Stringer, Graham

      Prentice, Gordon (Pendle)

      Stuart, Ms Gisela

      Primarolo, Dawn

      Sutcliffe, Gerry

      Prosser, Gwyn

      Taylor, Rt Hon Mrs Ann (Dewsbury)

      Quin, Ms Joyce

      Taylor, David (NW Leics)

      Quinn, Lawrie

      Thomas, Gareth R (Harrow W)

      Rammell, Bill

      Timms, Stephen

      Rapson, Syd

      Tipping, Paddy

      Raynsford, Nick

      Todd, Mark

      Reed, Andrew (Loughborough)

      Touhig, Don

      Robertson, Rt Hon George (Hamilton S)

      Turner, Dr George (NW Norfolk)

      Robinson, Geoffrey (Cov'try NW)

      Twigg, Stephen (Enfield)

      Rooker, Jeff

      Vaz, Keith

      Ross, Ernie (Dundee W)

      Vis, Dr Rudi

      Ruane, Chris

      Wareing, Robert N

      Russell, Ms Christine (Chester)

      White, Brian

      Ryan, Ms Joan

      Whitehead, Dr Alan

      Savidge, Malcolm

      Wicks, Malcolm

      Sawford, Phil

      Williams, Rt Hon Alan (Swansea W)

      Sedgemore, Brian

      Wood, Mike

      Shaw, Jonathan

      Woolas, Phil

      Shipley, Ms Debra

      Wright, Dr Tony (Cannock)

      Simpson, Alan (Nottingham S)

      Skinner, Dennis

      Tellers for the Ayes:

      Smith, Angela (Basildon)

      Mr. Kevin Hughes and

      Smith, Miss Geraldine (Morecambe & Lunesdale)

      Mr. Jim Dowd.

      NOES

      Allan, Richard

      Kennedy, Charles (Ross Skye)

      Berth, Rt Hon A J

      Livsey, Richard

      Brake, Torn

      Moore, Michael

      Brand, Dr Peter

      Morgan, Alasdair (Galloway)

      Burnett, John

      Öpik, Lembit

      Burstow, Paul

      Rendel, David

      Campbell, Menzies (NE Fife)

      Russell, Bob (Colchester)

      Cotter, Brian

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

      Foster, Don (Bath)

      Tyler, Paul

      George, Andrew (St Ives)

      Willis, Phil

      Harris, Dr Evan

      Tellers for the Noes:

      Heath, David (Somerton & Frome)

      Mr. Colin Breed and

      Hughes, Simon (Southwark N)

      Mr. Adrian Sanders.

      Keetch, Paul

      Question accordingly agreed to.
      Bill read the Third time, and passed.

Scottish Enterprise Bill
Order for Second Reading read.
4.22 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): I beg to move, That the Bill be now read a Second time.
This Bill has a narrow and, indeed, a technical compass. It arises because section 25(2) of the Enterprise and New Towns (Scotland) Act 1990 places an aggregate financial limit on Scottish Enterprise. For it to continue its operations, that limit must be raised every few years. The purpose of this Bill is to increase the financial limit from the present £3 billion to £4 billion. In addition, it removes the provision that enables the Secretary of State to increase the limit further by statutory instrument, so clearing the way for the Scottish Parliament to introduce its own arrangements in due course.
Mr. John Home Robertson: I cannot resist commenting on the fact that, barring accidents, this should be the last Scottish Bill ever to pass through this Parliament. As my hon. Friend may recall—well, perhaps not personally—the first Scottish Bill to pass through it was the Court Exchequer (Scotland) Act 1707, which concerned taxation. Is it not entirely appropriate that the final Scottish Bill to pass through under this Government concerns enterprise?
Mr. Macdonald: My hon. Friend makes a fair and historic observation. I understand that this will be the last Scottish programme Bill to be presented to the House, so it is a matter of some note. As I said, the Scottish Parliament will arrange such matters in future.
Sir Robert Smith: Does the Minister accept that there might still be ballot Bills containing Scottish legislation?
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am not sure whether I put the Question on the mini-debate that is taking place. Perhaps we may now move on to the main debate on Scottish Enterprise.
Mr. Macdonald: As I said, this will be the last Scottish programme Bill to be presented to the House.
To return to less controversial matters. A number of items count towards the financial limit that is placed on Scottish Enterprise: first, its and its subsidiaries' general borrowings; secondly, sums issued by the Secretary of State or the Treasury in fulfilment of guarantees; thirdly, loans guaranteed by Scottish Enterprise or its subsidiaries; and finally, the largest item comprises payment from the Secretary of State consisting of grant in aid less administrative expenses, plus voted loans payments.
The increase to £4 billion will allow Scottish Enterprise to continue to operate until approximately March 2001. Thereafter, as already noted, the Scottish Parliament will have an opportunity to consider the future funding arrangements. It is entirely right that that should be a matter for the Scottish Parliament to decide.
Dr. Norman A. Godman: On a practical, not a historical question, I hope that the
1080
legislation will encourage the officials of Scottish Enterprise to ensure that the money is invested in areas of high unemployment and in desperately needed developments. The Gourock waterfront development is one such example and it is crying out for assistance. I hope that, by way of this Bill, the Minister will encourage Scottish Enterprise to give that development some support.
Mr. Macdonald: The legislation will not do so by itself, of course, but it will enable Scottish Enterprise to keep functioning and, therefore, to follow through the Government's plans and the strategy that has been agreed with SE, which takes into account the very points made by my hon. Friend.
Expenditure for 1997–98 alone has achieved some significant successes: the creation of 30,000 jobs opportunities; 17,700 projects undertaken with Scottish businesses; 5,300 new businesses started up, generating £33 million of additional sales and employment opportunities for 13,500 people; and finally, 87 inward investment projects.
Recently, there has been much in the news about job losses, which are always of concern. Yesterday, we heard of the possible closure of the Wrangler factory in Falkirk with a loss of 500 jobs. I understand that Forth Valley Enterprise, the local authority, the Employment Service and Triaze, which is a new deal training company, are meeting to put together practical steps to help employees gain alternative employment. Falkirk is not the only area to have to cope with setbacks of that nature.
Those statistics do not tell of the real impact on individuals and families who suffer because of job losses. However, the successes in creating jobs should also be noted. Of particular relevance to Falkirk, Thomas Cook in Larbert has just launched a campaign to recruit at least another 250 staff in the next four to five months. There are other successes throughout Scotland. In recent months, such companies as Foxteq, Packard Bell NEC, Bank of Bermuda, BSkyB and Universal Scientific Industries have announced plans to create more than 6,000 new jobs in Scotland. Yes, jobs are being lost, but throughout Scotland there are positive successes in job creation.
My right hon. Friend the Secretary of State recently provided Scottish Enterprise with strategic guidance that will ensure that it is aligned to the Government's aims and objectives for the economy as a whole. That includes the point made by my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman), and we debated those aims on Monday in the Scottish Grand Committee. The strategic guidance lays out ambitious plans for Scottish Enterprise: to help create 100,000 new businesses in the next ten years; to improve their survival rates; to broaden the knowledge base of the Scottish economy; to promote the clustering of companies in sectors that are most likely to benefit from a strategy of collaboration; to engage the strength of large companies in partnerships across the economy; to raise the level of investment in research and development; to sustain Scotland's attraction to inward investment; and finally, to help Scottish Trade International to create new exporters and expand new markets for Scottish goods.
That is an ambitious programme, but we consider that it is achievable within the current level of funding. It is a programme that goes beyond June 1999, when the

1081
current aggregate amount outstanding will be reached. The purpose of the Bill is simply to raise that level to enable Scottish Enterprise to continue its work to meet those objectives until the Scottish Parliament can consider afresh the funding arrangements for Scottish Enterprise. I commend the Bill to the House.
4.30 pm
Mr. Oliver Letwin: As the Minister and some of his hon. Friends have mentioned, this is the last Scottish programme Bill before the House. [HoN. MEMBERS: "Hear, hear."] That will be a matter of delight to Labour Members, but a matter of sadness to me not to have the opportunity in my guise as MacLetwin to encounter the Minister with his charm and elegant exposition. It has frequently been the case in Committee and on considering orders that the Minister has been able to make his remarks concise. I hope that I have been able to oblige by also reducing mine, in some cases to approximately 30 seconds. That would be in the tradition of the Scottish Enterprise Bill's predecessors: when previously the limit has been raised, the debate has been short. I fear, however, I cannot utterly oblige the Minister on this occasion. I hope that he will bear with me if I make a few observations about what I think is a remarkably different situation from that which first appears.
This is a short Bill—that is an understatement—and it appears to be innocuous. After all, when allowance is made for the Scottish Enterprise (Aggregate Amount Outstanding) Order 1997 having raised already the limit to £3,000 million, this Bill only raises the limit by a further £1,000 million. I hope that hon. Members will pause at the words "only raises the limit by a further £1,000 million". That is about enough to pay 50,000 nurses for a year, to buy 1,000 miles of railway, to pay 37,600 teachers, to build 340 primary and 150 secondary schools or to build 10 major district hospitals. It is a large sum. It is about the same as the gross domestic product of Fiji or Nicaragua and about twice the GDP of Chad or Belize. I hope that those measures make it plain that we are not talking about peanuts. The question is whether we are dealing with monkeys.
Mrs. Maria Fyfe: Does the hon. Gentleman recall any such substantial increase during the Tory years when cities such as Glasgow were left to get on with high levels of unemployment to the despair of many citizens? The previous Government simply ignored their needs.
Mr. Letwin: I am grateful to the hon. Lady. The last time the limit was raised under the order it was raised by £1,000 million, so I can recall, or rather read about, such things. As I proceed the hon. Lady will discover that we in the Opposition have no opposition to the idea of an increase, nor to an increase of this magnitude. We may find ourselves joined by the hon. Lady in a few moments when she realises what is happening in Scottish Enterprise.
It is true, as the Minister says, that this organisation claims to have created about 30,000 jobs, net, at a cost of about £15,000 a job, if my arithmetic serves me correctly. That is not all that it does. The level of information that
1082
the organisation provides in its report and accounts is a good deal better than sometimes applies to non-departmental public bodies. It is still fairly exiguous compared with the amount of information about most public companies—certainly most public companies spending £400 million a year or so as this does.
There is enough in the report and accounts, with which the Minister is no doubt fully familiar, to cause more than a few eyebrows to be raised on the Benches opposite. This is not a partisan point, but something on which the whole House can agree. [Interruption.] I wonder whether the hon. Member for Carlisle (Mr. Martlew), who from a sedentary position says that there is no reason for eyebrows to be raised, knows how much Scottish Enterprise spends on administration.
Mr. Eric Martlew: I am sorry to intervene. I was pointing out that there are no hon. Members behind the hon. Gentleman to raise their eyebrows.
Mr. Letwin: I do apologise to the hon. Gentleman, but I did say the Benches opposite. As a matter of fact three of my hon. Friends are here and ready to offer themselves and their wisdom to the House. In any event I hope that we can make up in quality for what we lack in quantity.
I wonder whether the hon. Gentleman knows or, indeed, whether the Minister has at the forefront of his mind just how much this organisation last year spent on management expenditure. Let us bear in mind that its total expenditure nets about £400 million. The national health service—not always cited as the prime example of management efficiency in western Europe or the world, and certainly not usually cited by the present Government as such because they accuse the previous Government of having inflated its management—spends about 0.7 per cent. of its budget on management. That is a little less than 1 per cent. and would be equivalent to Scottish Enterprise spending £4 million on its management. The Department for International Development or the Welsh Office spend a rather higher amount—about 2 per cent., which would suggest about £8 million in this case. Perhaps most relevantly, the Scottish Office spends about 5 per cent. of its budget on management, which would suggest about £20 million in this case.
It may, therefore, come as a surprise to some Labour Members—it certainly came as a profound shock to me when I got to grips with these accounts—to find that this organisation spends nearly £70 million of its £400 million budget on management. That is a genuinely astonishing achievement. I do not know quite how it is managed, but that seems to be the case.
Mr. Tam Dalyell: When the hon. Gentleman says that he got to grips with the accounts, did he talk to the Scottish Office and give it an opportunity to give an explanation?
Mr. Letwin: I took advantage of the House of Commons Library and asked for a note on the matter. So far as I can make out the expenditure is partly the consequence of the rather elaborate federal structure—perhaps of interest to the hon. Gentleman—that the organisation operates with its subsidiaries, the local enterprise companies. It is also no doubt the case—I judge this from the statements made on the internet provision,

1083
the website and other statements by Scottish Enterprise management itself—because it prides itself on offering a high level of service to what it calls its clients, or those whom it is trying to help. The fact remains that the total sum of expenditure on management and administration is extraordinarily high.
Mr. Alasdair Morgan rose—
Mr. Dalyell rose—
Mr. Letwin: Of course I will give way.
Mr. Morgan: Would the hon. Gentleman—
Mr. Dalyell: Simply once more—
Mr. Deputy Speaker: Order. The hon. Gentleman must indicate to whom he is giving way.
Mr. Letwin: I do apologise, Mr. Deputy Speaker. I did not know that two hon. Members were seeking to intervene. I give way to the hon. Member for Linlithgow (Mr. Dalyell).
Mr. Dalyell: As one who in his constituency work, like my colleagues, has a good deal to do with the organisation, I have the anecdotal and first-hand impression that it is efficient. I do not want to score points against anybody, but fair is fair. Before making this kind of criticism the hon. Gentleman should talk to those involved.
Mr. Letwin: Nevertheless there is a set of accounts and the hon. Gentleman's anecdotal impressions must be reconciled with the facts that the accounts present. The facts presented suggest that £70 million of public money is spent on management and administration. That is not all that emerges from the accounts. The body also publishes a balance sheet. We might ask ourselves just how much cash an organisation like this needs to keep in the bank at any given time. Perhaps a few million pounds would be perfectly reasonable. Is it not therefore a matter of some surprise to discover that almost £90 million are kept in cash at the bank or in hand? Does that not strike one as a rather large sum of money?
Mr. Morgan: Regardless of the validity or otherwise of the hon. Gentleman's criticisms, would he care to tell the House who put in place the structure to which he is referring?
Mr. Letwin: The structure was put in place by the previous Government. That is fully acknowledged. It is a matter of some concern to me that the previous Opposition did not point out some of these things. That is no reason for the current Opposition to fail similarly. It is the duty of this House to scrutinise without regard to political partisanship; that is precisely the job that I am trying to fulfil.
Mr. Desmond Swayne: It has been suggested that there are bound to be rational explanations
1084
for the phenomena to which my hon. Friend drew attention. We have a Minister present who will no doubt be able to explain the matter in his reply.
Mr. Letwin: I am grateful to my hon. Friend, who is right that that should be the position. No doubt my remarks will cause the Minister to make some illuminating utterances, if he chooses to make any later. My hon. Friend would be misled if he supposed that it is only the items to which I have referred that cause concern.
In the strategy guidance to which the Minister referred, there is no mention of how the organisation is administered. Much is said about what it should be doing vis-a-vis the external world but nothing, as far as I could determine, about how it acts internally. That leads me to suspect that the Minister may not quite be able to live up to the high expectations of my hon. Friend the Member for New Forest, West (Mr. Swayne) of his ability to enlighten the House on the matter.
Things are worse than might be supposed because on examining the accounts, we next discover—the Government appear to have noticed this, to judge from the statements of the Secretary of State—that Scottish Enterprise has turned itself over the years into a sizeable property company. It holds an asset base—it is not clear on what valuation—of about £200 million, on which it seems to make a normal commercial return of about 5 per cent. One might say that there was nothing wrong with that, but it would be interesting to discover why it needs to hold such a portfolio. None of the statements in the report and accounts or otherwise published by the organisation make the matter clear. I must share my view with the Secretary of State because he has asked it to redirect its efforts away from property towards other activities.
The organisation has a heavy burden of management—at least in respect of the costs associated with it—a large amount of cash in hand, and a big property portfolio. I could bore the House with an analysis of the other issues that cause concern.
Mr. Swayne: Do.
Mr. Letwin: I do not intend to do that, not least because I know that Labour Members are desperately keen to get on trains and disappear under the new dispensation for Thursdays.
It is a remarkable fact that, irrespective of the veracity of the anecdotal observation of the hon. Member for Linlithgow that the organisation is highly efficient, the matter has not, so far as I was able to determine, been investigated. Over many years, the Public Accounts Committee has not investigated whether it operates thoroughly efficiently. That brings me to the main burden of my argument.
The Minister is right that hereafter, it will not be this Parliament in which such questions can be raised. The Public Accounts Committee will no longer in any obvious sense be able to examine them; they will move to the Scottish Parliament. The Minister will remember that as a concern of Opposition Members right from the beginning of the prolonged debates on devolution. It was raised vividly in one debate by the Chairman of the PAC. I know that we are talking about efficiency rather than

1085
outright fraud or impropriety, but how will such matters be monitored in the new arrangements for the Scottish Parliament?
Sir Robert Smith: To draw conclusions from what the hon. Gentleman has said so far, the Scottish Parliament will provide an opportunity more closely to monitor such matters because it will have the time and inclination. As he said, the current set-up has not done the job and he has found nothing in print to assist him in understanding the accounts.
Mr. Letwin: That is an interesting point but I wonder whether the hon. Gentleman will hold that view when I have finished. Certainly, the Accounts Commission for Scotland has concerns. It has probably invited him, as it has me, to a reception.
Mr. Home Robertson: How much will that cost?
Mr. Letwin: Indeed, we must ask that.
Mr. Michael Moore: Why not pay your own way?
Mr. Letwin: I have no intention of paying my way into the reception.
We are told that the reception will examine a key theme: the role of public scrutiny and audit under the Scottish Parliament. At least the commission is asking the right question. There is a serious problem but I wonder whether Ministers have seriously considered it. That brings me face to face with the point made by the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith). The Scottish Parliament will not be spending its own money, apart from what the Prime Minister tells us to regard as the penny rate. Of course, no Government or Parliament has its own money; it is all taxpayers' money, but the Scottish Parliament will not even be spending money that it has raised but money from the United Kingdom that will have been voted by this Parliament. We know a good deal about how human nature reacts in such situations because we can examine the long record of local government.
We all know that local councils—whether controlled by the Conservatives, the Liberal Democrats, or even, dare I say it, Labour—have a long and enviable record of successfully arguing, whenever they find that their inefficiencies prevent them from fulfilling the needs and desires of their local communities, that the cause is lack of cash from central Government. I have not the slightest doubt that all parties in the Scottish Parliament will, if left to their own devices, first resort to the argument that any lack comes not from the inefficiency of the bodies that they administer but from an insufficiency of funds voted by this Parliament to the Scottish Parliament.
I do not say that as an accusation. Any hon. Member, including me, would be inclined in that position to make that argument. That is how democratic politics works but it raises a question that the House must address, and which I fear that Ministers may not have addressed. To what extent will it be proper for this House to consider the efficiency with which the funds that it votes to the
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Scottish Parliament, and which the Scottish Parliament administers on behalf, so to speak, of the United Kingdom, are disbursed? The case of Scottish Enterprise and the figures that I have raised concern about are a case in point. I believe that it will be proper for the House to continue to exert itself to try to find whether the moneys allocated are being efficiently spent in such cases.
Mr. Malcolm Chisholm: When we analyse the hon. Gentleman's speech afterwards, we will regard it as one of the better speeches by an Opposition Front-Bench spokesman in favour of a Scottish Parliament. He seems to be saying that the House has signally failed over all the years of Scottish Enterprise to exercise any scrutiny. Clearly, those of us who aspire to go to the Scottish Parliament will spend much more time examining the affairs of Scottish Enterprise than we ever have here. He is wrong to assume that we shall want more money on every question. The priority will be to ensure that we get maximum value from the large resources that we will have.
Mr. Letwin: I am extraordinarily grateful to the hon. Gentleman, with his distinguished record in public service, for saying that my speech is good. I doubt that it is, but I assure him that it is not a speech in favour of, or indeed against, devolution. I am reflecting on the consequences of a fait accompli. I do not doubt that conscientious Members such as he, if they become Members of the Scottish Parliament, will seek to ensure that the things for which they are responsible are efficiently run. The question is: with what level of energy will they devote themselves to that task and to the much more politically attractive task of arguing that Westminster has not given them enough money? If the hon. Gentleman claims that the former task will be given a larger amount of energy and the latter will be given a lesser amount of energy, I would be happy outside the Chamber to take a large bet on the matter. This Parliament will continue to vote large sums via the Scottish Parliament to bodies which there is a serious threat that the House of Commons will no longer scrutinise.
We come to the second point that the hon. Member for Edinburgh, North and Leith (Mr. Chisholm) made. Has the House of Commons already shown itself incapable of examining such matters? The answer, I regret to say, is that as a result of the lamentable record of the previous Opposition, in the case of Scottish Enterprise the House was not good at examining such matters. But at least it had the motive for so doing. It could not blame anyone else if the money was badly spent and it could not ask anyone else for more money other than the taxpayers, who are also its voters.
Despite the badinage, there is a serious issue for the House. How far will we retain the ability to raise matters of concern that may be allayed by further investigation? If we do not retain that ability, we will betray the trust that our electors have placed in us by sending us to this place.
Mr. John McAllion: The hon. Gentleman seems to argue that the Scots cannot be trusted to look seriously at the way in which money is spent in Scotland and that only this Parliament can be trusted to do that. Will he reflect on the fact that my right hon. Friend the Chancellor of the Exchequer is the first Scot

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to hold the position in more than 20 years, and that he, after Labour came to office, found an extra £40 billion that had been inefficiently spent by the House?
Mr. Deputy Speaker: Order. I do not want to pin the responsibility wholly on the hon. Member for Dundee, East (Mr. McAllion), but I suspect that the argument is spinning to the further reaches of what is permissible. I wish to hear more arguments specifically about Scottish Enterprise.
Mr. Letwin: I will certainly stick by that admonition, although it is gravely tempting to respond to the hon. Gentleman.
In the case of Scottish Enterprise and many other such cases, the House will have to develop mechanisms for examination. Notwithstanding the fact that this is the last programmed Bill on Scottish matters and the last Bill that we shall see on Scottish Enterprise, as and when further increases are made in the amounts of money that Scottish Enterprise can spend out of taxpayers' funds, and as similar Bills come forward in the Scottish Parliament in relation to bodies governed by it, those amounts must be scrutinised. Such mechanisms may not often be invoked, but it must be possible to invoke them so that any serious concerns can be dealt with. The Minister has not said anything about that, which is odd. I think that he genuinely has not spent any time worrying about whether there are any concerns about the accounts of Scottish Enterprise. That is sad, but it is remediable.
The purpose of this Second Reading debate and my speech has been to ensure that the Minister goes away with his very able officials and works at precisely the question that I have raised. I hope that by the time we have gone through the Committee stage and come back to the Floor of the House for Third Reading, the Minister will be able to make an eloquent exposition on exactly how this Parliament will deal with the problem. If he does not, he will convict himself and his Department of failing to wrestle with one of the serious issues that arises from devolution, with which we have come face to face today as a result of the need to examine Scottish Enterprise.
In summary, there is a specific concern about Scottish Enterprise. That concern does not lead the Opposition to object to the raising of the limit, but it makes us wish that the Scottish Office would look closely at the matter. It is a concern that perhaps ought to be reflected in an investigation by some Committee of the House. More macroscopically, it is a concern that brings us face to face with the need for the House to develop adequate mechanisms to ensure that when public money is voted by this Parliament to the Scottish Parliament and ends up in the hands of bodies administered by the Scottish Parliament, it is nevertheless subject to the proper scrutiny of the House.
Mr. Macdonald: I shall try to respond to the points that the hon. Gentleman has made, but may I clarify whether he is attacking the Bill or simply wants to question the devolution context? I take it that he agrees with the Bill.
Mr. Letwin: That is correct. This is a probing speech in a Second Reading debate. I know of no other sufficiently serious way of raising this issue. We have no objection to the Bill and will certainly not ask colleagues to vote against it in the Lobby today.
4.55 pm
Mr. David Marshall: The fact that the hon. Member for West Dorset (Mr. Letwin) has not been long in this House may explain—I am being charitable—how he conveniently ignores that for 18 of the past 20 years his party was in power and operated the Scottish Office. His party set up Scottish Enterprise in 1991 when it replaced the Scottish Development Agency.
The hon. Gentleman criticises Scottish Enterprise's management. While I would be the last to say that everything in the Scottish Enterprise garden is rosy and there is no room for improvement, it is only fair to point out what we get from that management. The summary of the results of Scottish Enterprise for 1997–98 includes
"the creation of 30,000 net additional job opportunities, a net additional £600 million added to Scotland's output; 17,700 projects undertaken with Scotland's businesses, leading to over £850 million of additional sales, of which over a third are exports; 230 companies entering new export markets; 180,000 employees benefiting from training and development; 640 companies committed to or recognised by the national standard of Investors in People; 77,000 enquiries handled by local networks of Business Shops and Enterprise Trusts; 5,300 new businesses started up generating 33 million additional sales and employment opportunities for 13,500 people; 22,000 visitors to the Personal Enterprise Shows; 87 inward investment projects attracted including high-tech research and development, such as Cadence and Clintrials, creating and safeguarding 18,000 jobs and generating £1 billion private investment; over 68 per cent. of young people received skills training as employed status and over 16,000 VQs were awarded; 4 out of 10 adults in Training for Work went on to a positive outcome; 350,000 sq m of property and 540 hectares of land developed in support for industrial and commercial businesses; 55 per cent. of contaminated and derelict land cleared and taken up for development; for every £1 spent by the Network on the physical business infrastructure in Scotland, £4.85 was contributed by others."
That impressive record may explain why Scottish Enterprise and its network are the envy of many other parts of the United Kingdom and the world.
Mr. Laurence Robertson: I do not wish to appear churlish, but the point that my hon. Friend the Member for West Dorset (Mr. Letwin) was making was that, although all that may be true, it is at an enormous cost. In spite of what the hon. Gentleman has said, in the Scottish Enterprise annual report the chief executive said:
"Scotland, however, still lags behind the rest of the UK in the number of businesses emerging."
Mr. Marshall: Some people are never satisfied. If people do not speculate, they cannot accumulate. The investment return as part of the Scottish economy far outweighs Opposition Members' carping criticisms.
The Bill must command the unanimous support of the House. I was pleased to note that the Opposition will not oppose it—they know the political consequences of such a step, although there is little hope for them in the forthcoming elections in Scotland. I warmly welcome the Bill. Any Bill that updates the overall limit that Scottish Enterprise can spend from £3 billion to £4 billion is very good news. I congratulate the Secretary of State for Scotland and the Scottish Office team.
Some may say that it is one thing to uprate the spending limit, but yet another to spend any of the additional moneys. I do not believe that the Government would have introduced the Bill if they did not intend Scottish Enterprise to use this additional spending power to deliver

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some of the Government's key economic objectives. This proposal will be a massive boost to the new Scottish Parliament, especially as it will take over the running of Scottish Enterprise. The money will be even more essential to the future well-being of Scotland in an ever-increasingly competitive world.
I shall touch briefly on two of Scottish Enterprise's activities: first, its international role, and secondly, its involvement in the city of Glasgow. The Select Committee on Scottish Affairs, which I have the privilege to Chair, is currently conducting an inquiry into inward-outward investment in Scotland and tourism in Scotland. Those matters are connected, and both are vital to Scotland's economy.
Last week, the Select Committee visited the United States of America as part of that inquiry. The visit was well worth while, because it enabled us to see how Locate in Scotland, Scotland Trade International, Scotland Virginia Partnership and the British Tourist Authority in the USA promote Scotland's interests in that country. Other members of the Committee who are present may want to give their opinion of the success of the visit.
Suffice it to say that the USA is the largest market in the world, and it is also the fiercest and most competitive. City competes against city, county against county and state against state. Their problems are not vastly different from ours, and neither are their solutions. We are competing with them: we are all competing with each other in north America and in the wider world. It is to the great credit of Scottish Enterprise and the component parts of its network that Scotland has done so well out of north America. We are the envy of many other places, few of which have done better than we have, although there is the odd exception.
The Committee also saw the operation of the consul general's office in New York and the British embassy in Washington, and met Scottish business people doing business in the USA. It also met with American companies, such as IBM, that are major investors in Scotland and in the United Kingdom as a whole.
Dr. Godman: IBM in Spango valley in Greenock employs almost 5,000 people, which makes it one of the biggest employers in the west of Scotland. I remind my hon. Friend that IBM has been in Greenock since 1951. It was brought there by the remarkable work of the late Sir Hector McNeil, who was the Labour MP for Greenock.
Mr. Marshall: As usual, my hon. Friend is correct in all that he says. IBM was the original inward investor in Scotland. IBM's importance to the Scottish economy is such that it is worth more than the Scotch whisky industry, and that says it all.
We met many American business people who are interested and involved in Scotland. Almost to a person, they were impressed by the activities of Scottish Enterprise, Locate in Scotland and Scotland Trade International. Americans do not give praise lightly, and members of the Committee were convinced that it was sincere and genuine, and a proper reflection of the activities of Scottish representatives in that country.
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In the five days we were there we visited four cities: Stamford, New York, Washington and Philadelphia. I should like to place on record our appreciation for the assistance, information and advice that we were given by everyone we met.
Mr. Swayne: The hon. Gentleman is giving eloquent testimony to the work of the Scottish Affairs Committee. I am deeply grateful to him for that—I was unable to take part in the visit, so he is providing a great service. In the light of the remarks of my hon. Friend the Member for West Dorset (Mr. Letwin), does the hon. Gentleman think it proper to consider whether the Committee, of which he is Chairman, should undertake an investigation into the management of Scottish Enterprise?
Mr. Marshall: It is a matter of great regret to the Committee that the hon. Gentleman was unable to go with us, because we genuinely value the role that he plays on the Committee. No Conservative MPs represent Scottish constituencies, and we thought that the hon. Gentleman had committed some cardinal sin when he was put on our Committee. I say with all sincerity that he has played an important part in the work of the Committee and is a good member of it. I have no hesitation in saying that, and if it embarrasses him, so be it.
Let me answer the hon. Gentleman's question. I am sure that tomorrow I shall find on my desk a letter from him making the suggestion that he has just made to us. If I do, it will be given serious consideration in the normal way.
I feel that I should praise Steven Bennett, director of Locate in Scotland in north America, David Taylor, director of Scotland Trade International and Lisa Smith, executive director of the Virginia Scotland Partnership—or the Scotland Virginia Partnership, depending on which part of the world one is in at the time. We were tremendously impressed by the presentations that were made to us and by the work done by those people.
Whether we like it or not, globalisation is happening. We can no longer take the status quo for granted. I believe that Scottish Enterprise, Locate in Scotland and Scotland Trade International are doing all that they can in the United States on behalf of Scotland's interests. I also believe, however—and this brings me to the purpose of the Bill—that they could do much more with a few additional resources, especially in terms of staff and premises and especially in Canada, where there is a great affinity with Scotland, and where there must be considerable opportunities. Locate in Scotland has only four offices in the United States, and I am not sure whether Scotland Trade International has any. It is difficult to run such a vast area as north America out of four small offices with fewer than 20 staff. I think that the return on a reasonably modest increase in resources could make such an increase well worth while. There is great interest in the United States in the Cadence project in Livingston. It could give Scotland a leading role at the cutting edge of technology in the future and bring massive benefits to our economy.
I was impressed to learn that the commonwealth of Virginia was the first state in America—as far as I know, it is still the only state—to appoint a Secretary for Technology, because it considers technology so important. It is worth noting that there are 23,000

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high-tech job vacancies in Virginia, which it is unable to fill because it cannot obtain trained staff. Perhaps the new Scottish Parliament will take on board the idea of a Secretary for Technology. Scotland has enough high technology to guarantee such a post, and I think that it would pay enormous dividends.
I counsel against going overboard on inward investment at any cost, and I hope that Scottish Enterprise will not dissipate too much of any additional moneys in that way. It appears that there are some unscrupulous companies that are interested only in obtaining whatever grants they can get, and then playing one area or country against another. They come in, take the money and run. We must not let ourselves be taken to the cleaners by such companies.
Mr. Letwin: I do not want to embarrass the hon. Gentleman unduly either, but I hope that he will accept that the Opposition thoroughly agree with what he has just said.
Mr. Marshall: I am unembarrassable, but that is by the way.
We would perhaps be better served by doing everything possible to retain existing jobs. That is another lesson that we learnt from our trip. Cities such as Philadelphia have great problems, and great similarities to Glasgow, which also has problems. They have found it more cost-effective and beneficial to concentrate on retaining jobs than to spend a fortune on trying to attract them. We should also encourage our indigenous industries to expand and prosper in their own areas. There is a feeling that we do not do enough in that regard.
It is essential that we expand our air services to Europe. At present they are totally inadequate. Perhaps Scottish Enterprise and the Scottish Office will consider what can be done.

I am delighted that at last a Labour Government are getting down to tackling Glasgow's problems after 18 years of Tory victimisation of and bias against it. I am aware that £1.5 billion of public money is being spent in the city,but the scale of the problem is so great that it is still not enough. My hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) raised the issue in an Adjournment debate in the Scottish Grand Committee in Edinburgh on Monday. She referred to the problems of deprivation in the city, and I congratulate her on doing so.
Just a few months ago, the Scottish Office central research unit and the department of urban studies at Glasgow university revised the Scottish area deprivation index, which ranks areas by post code sectors. Thirty-nine of the worst 45 sectors in Scotland are in Glasgow, including the worst 15. Twelve of those 45 post code areas are in my constituency, including two of the top 10. Of the 618,430 people in Glasgow, 369,313, or 60 per cent., live in the worst 10 per cent. of post code sectors.
Those statistics are horrifying and unacceptable as we approach the new millennium. They illustrate why Scottish Enterprise must give more resources to the local employment company, namely, the Glasgow development agency, if the problems that face the city are ever to be overcome.
For example, the brown-field site budget is only £3 million, yet there are approximately 2,000 acres of derelict and contaminated land; 11 per cent. of the city's
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area is derelict or contaminated. That could be the source of much future prosperity if it is brought back into use as soon as possible. The draft Glasgow Alliance strategy has a target of bringing 50 per cent. of that land back into use within five years. Let us improve on that target, either in scale or in time. Again, Scottish Enterprise could spend more money in dealing with that problem.
Perhaps I should declare an interest, being a member of the board of the East End Partnership, of the East End Regeneration Management Board and a co-opted member of the board of Glasgow Alliance. The alliance has a visionary strategy and we now have a consultative document on a joint economic strategy for Glasgow. What we need now is action and, as I have said, even more resources from Scottish Enterprise.
Glasgow is turning itself around. There is much good in the city and a lot going for it. It is, indeed, miles better than it was. It has improved leaps and bounds, particularly over the past two years, thanks to the change in Government, but it must be remembered that, almost every year for the past 20 years, Glasgow has lost the equivalent of a Ravenscraig in terms of jobs. People tend to ignore that fact. Because it is a city, it somehow misses out.
Unemployment and poverty are still endemic in the city. There are still thousands of below tolerable standard houses, many in my constituency. Therefore, there are great opportunities for new housing partnerships. Scottish Enterprise is also involved in that.
The new employment zone has been good, but has had problems. I understand that it is £500,000 short of European social funding. If we cannot get ESF for that vital initiative, perhaps Scottish Enterprise can make up the shortfall. The hopes of hundreds of unemployed young people—including 80 of my constituents who are on the programme—depend on the success of the zone.
There are concerns in Glasgow and elsewhere that, with the establishment of the Scottish Parliament in Edinburgh, there will be a jobs drift from the west of Scotland to the east. Therefore, it is essential that the M74 extension from Tollcross to Kingston be completed as soon as possible. That is arguably the number one priority for the economy of Glasgow. It would free many hundreds of acres of derelict land for investment, create thousands of jobs, reduce pollution, improve the environment, eliminate congestion in the city, improve road safety and reduce pressure on Kingston bridge.
I appeal to the Minister to ensure that Scottish Enterprise spends its resources in a well-balanced way. It is fine to have physical developments and large projects, but it is also essential to concentrate on getting more to the poorest communities, especially if we are to maximise the advantages of the new deal.
Many thousands of young people have already benefited from the new deal, but many more have still to do so. We will not be able to levy former public utilities again to continue to fund the new deal, so, if we are to be serious about social inclusion, we must take the longer-term view and invest in training, education and infrastructure.
Thankfully, unemployment has fallen substantially since the change of Government, even in Glasgow. However, in the latest research paper issued by the House of Commons Library on unemployment by constituency as at December 1998, my constituency is ranked the

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16th worst in the UK and number one in Scotland. Indeed, eight of the top nine in Scotland are all in Glasgow and there are only nine and a bit constituencies in the city.
The male rate of unemployment in my constituency is 16.5 per cent. The female rate is 5.1 per cent., giving an average of 11.8 per cent. Those are tragic figures, and all the more so when we consider that they are substantially down on what they were two years ago and on what they were for most of the 18 years of Tory Government, when they were over 20 per cent. Under the Tories, there was no hope for my constituents, but, under the new Labour Government there is a great deal of hope. Let us extend the Scottish Enterprise budget by this £1 billion and ensure that it is spent to the benefit of the people of Scotland.
5.15 pm
Mr. Michael Moore: It is a pleasure to follow the hon. Member for Glasgow, Shettleston (Mr. Marshall). As a member of the Select Committee on Scottish Affairs, I have enjoyed working with him and other colleagues, many of whom are present this afternoon. The hon. Gentleman was right to focus many of his comments about this Bill in the context of the Select Committee's visit to north America last week. We went to see, in practice, much of the work of Scottish Enterprise and its agencies, Locate in Scotland and Scottish Trade International. I concur with the hon. Gentleman's view that, as a group, we were very impressed by the work being done.
It is also a pleasure to follow the hon. Member for Shettleston because, in truth, he brought the debate back to the real issues that should be under discussion as we deal with the funding for Scottish Enterprise. I have, for my sins, over many years, pored over rather more sets of accounts than is probably safe for my sanity, but I have never inflicted an analytical review of a set of accounts on more than myself, and certainly not on a Chamber such as this. I was disappointed to hear that the main thrust of the speech from the Opposition spokesman was a comparison of balance sheets and expenditure over the past year. Although there is a legitimate scrutiny issue, time and again, the Conservatives have missed the point that, under the Scottish Parliament we will, for the first time, have an opportunity to have the accounts of enterprise agencies such as Scottish Enterprise and Highlands and Islands Enterprise, looked at thoroughly whereas perhaps, in the past, this House has not done that particularly well.
The timing of the debate is opportune. It comes at a time when Scottish Enterprise is announcing a new strategy which will take it forward into the millennium. It comes in a week when the noble Lord Macdonald of Tradeston made a statement to the Scottish Grand Committee in Edinburgh. Also, as I have said, it follows the Select Committee's visit to north America where we were looking closely at the work of many of Scottish Enterprise's agencies.
The hon. Member for Shettleston has graphically painted a picture of how much work remains to be done in different parts of Scotland if we are to ensure that enterprise and economic development are shared out
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equally and benefit all areas of the country. Anybody who is in danger of being complacent has only to look at the list of recent job losses across the country. This week there have been job losses at Wrangler in Falkirk. There have been job losses on the ferries at Stranraer in Galloway. There has been a series of job losses in Dumfries and Prestwick and in the borders, my part of the country, we have seen unprecedented job losses. While the banana war continues in all its irrelevance between the United States and Europe, we suffer the consequence of hundreds of job losses in the cashmere sector.
It is important that we do not lose sight of any of those job losses when we are looking at the budget for Scottish Enterprise and how it may spend that money. When Lord Macdonald spoke to the Scottish Grand Committee he highlighted various weaknesses in the Scottish economy. He listed a poor level of business start-up, very low investment in research and development, low skills and zero population growth. He was eloquent in pointing out how we might address most of those issues, but, strangely, how to combat zero population growth was missing from the list of initiatives.
There can be no doubt that Scottish Trade International, which is a largely forgotten body in the economic development armoury of the Scottish Office, is an organisation that will have a greater role to play over the next 20 years. The themes of the Select Committee's visit to the United States were, time and again, the increasing need to take account of the knowledge-based economy and the fact that technology is changing very rapidly. Above all else, the Committee learnt that economies will have to adjust to mobile capital and the fact that businesses can very quickly move in and out of a country. Although Locate in Scotland has for years been very successful, we have to focus increasingly on outward investment, ensuring that Scottish companies receive as much assistance as possible in promoting their products and sales overseas.
Lord Macdonald also made much of the technology ventures initiative, which is examining ways in which Scottish Enterprise and other agencies may be able to help promote the growth of high-tech industries, which are critical to our future. The Scottish Office and Locate in Scotland have so far been successful in attracting Cadence to Scotland. Project Alba is examining ways of increasing our competence in chip technology systems and of expanding that knowledge base in Scotland. The project is very exciting but will require the support of a cluster of Scottish companies to make it successful.
I am concerned that, in Scotland, we are not yet sufficiently alert to the prospects of our financial sector or attuned to its needs. When the Committee was in the United States, we met a venture capitalist in Philadelphia who talked about establishing a European fund to provide capital to new, small high-tech companies. He plans to raise great sums to invest in Scotland, where he sees great potential. However, he does not foresee any great competition from Scottish venture capitalists. Perhaps Scottish Enterprise has more of a job on its hands than it has so far acknowledged.
This week, the Scottish Office made an announcement on establishing various business pathfinder groups to consider ways of promoting the Scottish Parliament to business and of ensuring that its Members and the Parliament's debates are attuned to business's needs and demands. That welcome initiative is directly relevant to

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Scottish Enterprise. In the debate on devolution and on establishing the Parliament, the business community was initially atheistic about the Scottish Parliament. Business is now perhaps agnostic about the Parliament, but has not yet become evangelistic about it. Nevertheless, things are moving in the right direction, and anything that supports such movement is welcome.
I should be interested to hear the Minister address the issue of why, although Scottish Enterprise has identified oil, gas and electronics as key clusters in developing the Scottish economy, appropriate pathfinder groups are not being established. It is a strange omission.
There is much consensus on how the Scottish economy should be developed, although the issue will continue to be debated actively in the remaining few months until the elections in June and beyond. Nevertheless, when implementing its new strategy and using the new funds that we are considering today, Scottish Enterprise should consider the business culture in Scotland, especially the way in which we do or—more often—do not encourage entrepreneurship.
I am afraid that too many people become aware of the need for wealth creation and business creation, and of the fact that profit occasionally can be a good thing, long after they have left school and university. We cannot blame that situation on any one sector, but there is no doubt that teacher training and school and university curriculums do not address the issues of entrepreneurship and wealth creation, thereby creating a major gap in business education. We need look no further than that non-business culture to discover some of the reasons for our low start-up business rate. It is strange that successful business men and women are the exception rather than the rule when Scotland has produced so many over the generations. Over hundreds of years, Scots have proved their ability in international trade and business. We must not lose out because of a lack of far-sightedness from agencies such as Scottish Enterprise.
I agree with the hon. Member for Shettleston about the need to complete the M74 link from Tollcross to Kingston bridge. That highlights a wider issue for Scottish Enterprise and economic development throughout Scotland. It is incredible that Scottish Enterprise's remit does not include the need to establish or draw up a national infrastructure strategy. The Minister may say that different parts of the Scottish Office consider roads and rail. Some hon. Members are eagerly awaiting the announcement of those reviews in the next few weeks. From an economic development perspective, it is important in international competition for our major enterprise agencies to have a blueprint of the national infrastructure, covering rail, road, air and sea, that would best help to attract new businesses to Scotland and help indigenous companies to grow. IBM in Greenock is almost an indigenous company, but it is important when dealing with such global firms to keep Scotland competitive as a place to do business.
I referred earlier to the significant job losses that we have experienced in Scotland recently. I have argued for some time that there is a need to establish a rapid reaction unit in the Scottish Office to take account of problems as they strike a particular area. All hon. Members present today have their own experience of the Government's response to their local difficulties. I endorse and welcome all the efforts of the Borders working party. The direction
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in which the interim report is going is encouraging, as long as the funding—of which there may be some available after this debate—comes along in due course.
Crises have hit Scotland time and again. They are unpredictable. Nobody could have expected Wrangler to announce the closure of its business this week and nobody foresaw the trouble at Viasystems in the borders. We need teams that can be assembled in the Scottish Office at short notice with the remit and responsibility to draw up local action plans, bringing together transport and education requirements and industrial and economic development issues. Sadly, the Scottish Office is getting a lot of practice at that at the moment. There is a good case for making it a standing part of Scottish Office machinery, particularly at Scottish Enterprise.
I should like to refer briefly to the situation in the borders. I have already talked about the need for the Government to keep a watchful eye on the trade dispute. I acknowledge that the Scottish Office cannot sort that out on its own. I want to put on record my gratitude to Scottish Trade International and other bodies in the Scottish Office that have worked closely with my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) and me on that. I also had a helpful meeting with the Minister for Trade this week. The potential impact of the loss of jobs in cashmere would be devastating. We have had many job losses in the borders and people are bleary at the prospect of more. We saw the problems in textiles and agriculture coming, but we are now being confronted by an issue that has nothing to do with the borders. It started as a trade war over bananas between the United States of America and the European Commission and somehow came home to roost in the borders. That is bad luck. We must be confident that the Scottish Office and Scottish Enterprise will continue to be behind the borders and will face up to the threat.
I understand that local enterprise companies in Scotland will learn of their budgetary allocations in the next few days. Indeed, it may even be as soon as tomorrow. I hope that the House will be told pretty quickly and not via a press release issued late on Friday evening. Those allocations are an important part of the debate on the Bill.
I remind the Minister of the commitment given by the Minister for Trade to support the £1 million down payment for the borders with further funding for specific projects in the local enterprise companies' budgets in the coming year. I hope that that pledge is about to be honoured.
The debate has focused on Scottish Enterprise, which is an important organisation. As hon. Members on both sides of the House have pointed out, it has a great deal of influence and potential for good around the country. We support the Bill and we hope that the new strategy for Scottish Enterprise proves to be the correct one, and that no one is carried away by talk of clusters and knowledge economies and forgets the problems that still face many people in Scotland.
5.31 pm
Ms Sandra Osborne: I am by no means desperate to catch a train, as the hon. Member for West Dorset (Mr. Letwin) suggested. Indeed, I intend to use the opportunity of supporting the Scottish Enterprise Bill to highlight a number of local issues affecting Ayrshire—a place with which the hon. Gentleman may not be familiar.

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If he listens, he may learn something about the recent problems and successes there. They emphasise the importance of the network that comprises Scottish Enterprise and the need for more resources which we hope will be made available shortly.
Scottish Enterprise has enjoyed a high profile this week. In the Scottish Grand Committee, the Minister made a statement on the new network strategy document; Sir Ian Wood gave evidence to the Scottish Affairs Committee this week; and today we are debating the Scottish Enterprise Bill.
The Scottish Affairs Committee has been inquiring into inward and outward investment, and a number of issues have been raised. In addition to the visit to America—rather than repeating any of the points that have been made, I shall simply say that I concur with the views of my colleagues on the Select Committee—there have been several visits to Scotland. We have taken evidence in the borders and in Dundee and I am pleased to say that we shall shortly visit Ayr to hear about the problems affecting inward investment and tourism in my constituency.
I believe that the Select Committee will produce an extremely helpful report. Some of the comments that have been made today are relevant, although I would not dream of pre-empting our recommendations or making them before the publication of the report. One issue raised during our inquiry concerned the potential problems associated with having a number of different agencies dealing with economic development and competing for inward investment. That can occur nationally and locally. I shall briefly describe the approach adopted in Ayrshire, which is a good example of how local players can work together to achieve a coherent strategic approach.
The Ayrshire economic forum is a partnership drawn from the three local authorities: Ayrshire chamber of commerce and industry, the Scottish Trades Union Council and Enterprise Ayrshire. For the past two years the forum has been working towards a new economic development strategy for Ayrshire. However, it has been overtaken by recent events, particularly a number of redundancies announced by significant companies such as Volvo, Digital, Prestwick Circuits, Sweater Shop, Sports Division and Butlins. Following those redundancies, the Minister addressed the forum and called for an action plan for jobs in Ayrshire. He said his involvement reflected the Government's concern and commitment to support areas facing structural economic change. I was pleased that he was involved.
It is clear that Ayrshire is an area facing such changes, and that there is a need for new businesses in Ayrshire and further diversification of the economic base. The economic forum will shortly publish an action plan for jobs, and will drive that forward with Scottish Office involvement. Again, that is a positive move on the part of the Scottish Office.
The action plan for jobs will be set in the context of the existing Enterprise Ayrshire business plan, the economic development plans of the local authorities and the Scottish Enterprise network strategy. That has been possible because the forum is a genuine partnership in which all the agencies work together.
The changes that are impacting on the Ayrshire economy are deep-seated and are affecting a wide range of sectors such as electronics, engineering, textiles and retail
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distribution. In the past, those sectors have contributed a great deal to Ayrshire's economic prosperity. We have a highly self-contained labour market, with 96 per cent. of Ayrshire jobs taken by Ayrshire residents. Tackling structural change in Ayrshire's economy therefore continues to be our overriding priority.
The pace of economic change, along with the wave of redundancies to which I referred, means that the current resources available to Enterprise Ayrshire and its local authority partners leave them running fast to stand still. The action plan for jobs must, therefore, be underpinned by the availability of additional resources. I am sure that the House will forgive me for making my bid for Ayrshire in the same way as others have made bids for their local area.
The work done by the forum does not suggest a quick-fix strategy—it is a detailed plan for the future, with concrete proposals that will create jobs. It builds on Ayrshire's considerable existing assets, which include the extension of the M77 and Glasgow Prestwick international airport—which continues to achieve substantial growth in its freight and passenger business, and does a great deal, as we heard on our trip to north America, to support the development of the Scottish electronics industry.
The presence of nationally significant development sites is also an advantage. As well as the area surrounding Prestwick airport, we have Riverside in Irvine and Rowallan in Kilmarnock. These represent future potential, and are areas on which we hope to build. We also have international research institutions in Ayrshire, such as the Hannah research institute, the Scottish agricultural college and the higher education facilities at Ayr campus of Paisley university, which are developing positively.
I am sure that everyone in the House will recognise that Ayrshire is a beautiful part of the country with a natural environment that provides an exceptional quality of life, which I recommend to all hon. Members—including the hon. Member for West Dorset. Despite those assets, however, Ayrshire's road and rail links will continue to require substantial investment if they are to meet future business needs. As my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) has emphasised, we will need to target areas of acute disadvantage and join in the Government's existing efforts to tackle social exclusion.
The action plan will have ambitious targets to create thousands of jobs over five years, but there has been a deliberate aim that the targets should be realistic and achievable. That is very important for local credibility. People often hear of action plans, task forces and working parties being set up, but they do not always see tangible results. There is a real, determined effort to make sure that there are tangible achievements after five years.
There has been also some good news in Ayrshire recently, with a number of announcements about inward investment—for example, Universal Scientific Industries creating 700 jobs in Irvine—and there have been positive views from local companies.
I want to highlight the work of the Prestwick task force, which was set up specifically to address aviation issues involving Prestwick airport and the surrounding aerospace companies. One of the crucial elements in its success has been the involvement of the national and multinational

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companies surrounding the airport. They have participated with great enthusiasm and have co-operated to the benefit of the whole area as well as themselves.
The final report, published in December, is a testament to how a collaborative approach can produce results. Only 18 months ago, when British Aerospace announced that production at Jetstream would cease at Prestwick, the banner headlines were all about the devastation of the Ayrshire economy. Now the talk is about Prestwick as a leading aerospace cluster on the world stage and about the continuing growth of traffic, especially freight cargo, at Prestwick airport.
The task force set itself eight targets. They have all been fully achieved or are well on the way to being achieved and have been picked up by other bodies. Alternative employment has been found for the majority of Jetstream workers affected by the closure, and all 270 aerostructure jobs at British Aerospace, which were at risk, have now been secured. In addition, more than 600 jobs have been created or are planned for the Prestwick area.
Locate in Scotland undertook a marketing exercise in north America highlighting the advantages of Prestwick as a location for aerospace companies. I agree with what other hon. Members have said about Locate in Scotland's work, which we witnessed when we were in America. The work done for Prestwick has resulted so far in 15 active leads that are currently being pursued. The airport recently opened a new purpose-built airfreight facility with support from Enterprise Ayrshire.
Some outstanding issues were highlighted by the task force report and were agreed by all the partners in the Ayrshire economic forum to be crucial to the further development of the Ayrshire economy. Those issues are extremely relevant to the work of Enterprise Ayrshire.
Improvements are needed to the roads infrastructure. Like other hon. Members, I will make a bid for the upgrading of the A77 to be completed. That is crucial to future development in Ayrshire. We will also pursue assisted area status. It will come as no surprise to hon. Members when I mention the vital importance of the completion of the new Scottish air traffic control centre at Prestwick, which will provide hundreds of high-quality jobs. The current centre is already a major contributor to the local economy. We must have progress on the contract. That is not directly the responsibility of Enterprise Ayrshire or Scottish Enterprise, but I am sure that they would agree that it is absolutely crucial to the local economy.
We need progress on fifth freedom rights for Prestwick airport. I am pleased that the Government have recently shown more flexibility and have granted fifth freedom rights to Polar Air Cargo at Prestwick, uniquely without a reciprocal arrangement from the United States Department of Transportation. That is real progress and it was certainly not achieved by the previous Government. In the long term we need a final agreement on fifth freedom cargo rights, which will bring significant benefits to Prestwick and indeed the whole of Scotland. We will continue to press for that.
It is clear that only a certain amount can be achieved locally and we are very dependent on national action and support to further our aims. A wider economic framework obviously determines how effective the enterprise companies can be locally, and general economic conditions have a major impact on the prospects for any one area.
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It is ironic that, despite everything else that I have said, unemployment in the Ayr constituency has dropped by 30 per cent. since December 1996. We warmly welcome that, but there is no room for complacency, and the figures hold no consolation for those who lose their jobs through redundancy. We must stick to a long-term strategy, both locally and nationally, to create stable and lasting jobs and make available training opportunities to help people into new employment. I am pleased that, unlike the previous Government, this Government have not washed their hands of redundancies in my area and Ministers have been willing to get involved. The role of Scottish Enterprise and local enterprise companies has also been crucial, because they are a concrete way in which the Government can ensure that they do not wash their hands of difficult situations.
All hon. Members present will no doubt wish to see applied to their area a fair share of the considerable resources that will be available to Scottish Enterprise. As my hon. Friends have said, we wish to see resources concentrated in areas of greatest need. That is important for Scotland, but was not done in the past 18 years. Ayrshire's case for more resources is sound and we will make a good case when the action plans for jobs are produced shortly. I trust that Scottish Enterprise will respond positively to our requests and our bid for increased funding.
5.46 pm
Mr. Desmond Swayne: It is a great pleasure to follow the hon. Member for Ayr (Ms Osborne), who is a member of the Committee on which I have the privilege to serve and who represents the town of my school days.
Before I deal with the subject of the Bill, will you first indulge me, Mr. Deputy Speaker, by allowing me to get a point of frustration and irritation off my chest? It is not the fact that I am unable to put in a bid for Scottish Enterprise money for New Forest, West, but the fact that, as is my custom, I rose early, swam quarter of a mile in the Serpentine and cycled to the Palace of Westminster. As a consequence of the business that must necessarily take place before the Chamber sits, I went straight into a series of meetings. Since business in the Chamber began, I have been in my place. At 5.46 pm, I rise to speak, feeling faint because I have scarcely had a moment to eat a banana and a mouthful of soup. The new arrangements for Thursday are inhumane and barbaric.
Mr. Deputy Speaker (Mr. Michael J. Martin): Order. I am sorry to hear that the hon. Gentleman is feeling faint and has not had a decent meal. However, I have had a decent meal and I wish to hear what he has to say on Scottish Enterprise, not on the arrangements of the House.
Mr. Swayne: In that case, hon. Members may welcome the fact that this is the last programmed Scottish Bill before the Scottish Parliament takes over Scottish business.
If one were to be partisan and make party political points, one might draw attention to the fact that the budget for training and Scottish Enterprise was cut by some £67 million in the comprehensive spending review. Were someone to make such a point, Labour Members would no doubt respond by saying that the previous

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Secretary of State cut the budget. However, Conservative Members would say that he did so only with the agreement of the chairman of Scottish Enterprise and that, within a year, the value of the cut had been more than restored. I wish to move on from such sterile ground in this age of new politics and consensus and to question the fundamental basis of the Bill.
The hon. Member for Glasgow, Shettleston (Mr. Marshall) made some pertinent points about the balance of investment between the need to secure more indigenous investment and the acquisition of more capital investment from overseas. I wish to go further and raise questions about the fundamental assumptions underpinning the Bill.
My first point relates to the expensive pursuit of overseas capital. The balance of payments must, of necessity, balance. The number of potatoes sold at the prices charged must be equal to the number of potatoes bought at the prices paid. Any imbalance in the balance of trade in the current account must be made up for by an equal and opposite imbalance under another item in the current account, or by an equal and opposite imbalance in the overall capital account.
Both the British and the Scottish economies are familiar with that fundamental concept. For a long period during the 19th century, and during this one, the Scottish economy and that of the whole United Kingdom ran a huge surplus on current account, made up of a deficit on the balance of trade masked by a huge surplus on invisible earnings. Strangely, even at the height of the industrial revolution, when Glasgow was the workshop of the world, we ran a deficit on our balance of trade.
The statistics of the 19th century are not entirely clear, and the evidence is not always obvious. At the beginning of the 19th century, our collection of statistics was not as sophisticated as it is now. However, it is questionable whether the United Kingdom ever ran a balance of trade surplus during that century. As a result, our current account surplus was made up of a huge surplus on invisibles, largely because of the shipping industry. The balance of trade was affected by the fact that the motor of our economic development—the cotton industry—relied almost wholly on an imported raw product.
Of necessity, the huge surplus on the current account led to an equal and opposite outflow on the capital account. Britain had to export capital to make its trading partners able to afford to continue to trade with us. On the back of that fact, British capital ended up building railways throughout the rest of Europe and in north America. A lasting legacy is that we retain the lead in the world, including the United States, as the largest per capita owners of overseas capital.
If there is a persistent balance of payments deficit, it must equally be met by a capital inflow. One cannot go on buying from a shop—
Mr. Deputy Speaker: Order. The hon. Gentleman is losing me, perhaps because I am not as well-versed as he in the economics of the 19th century. We must home in on the Second Reading of the Bill, which is about
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enterprise and new towns in Scotland. The hon. Gentleman seems to be speaking more about the economy of the UK as a whole.
Mr. Swayne: One of the principal functions of Scottish Enterprise and its partnership with Locate in Scotland will be to attract inward investment. The point that I seek to make, Mr. Deputy Speaker, is that one cannot go on buying from a shop without having some source of income. I have pointed out the necessity of equal and opposite matching outward capital flows where a country runs a persistent current account surplus, or inward capital flows where a country runs a persistent balance of payments deficit. Capital inflow is an automatic consequence of the state of the current and capital accounts of the balance of payments. My question concerns the wisdom of making the expensive pursuit of foreign investment a priority. Obviously, it is a matter of balance. There is a measure of automation in the process, yet we seem to be investing a great deal to short-circuit and do the work that the logic of economic theory would ordinarily do for us.
Mr. Alasdair Morgan: Is the hon. Gentleman saying that, if Locate in Scotland did not pursue its activities, for example, all that inward investment would still come to Scotland and would not be attracted to Ireland by, say, the Irish Industrial Development Agency?
Mr. Swayne: I am making a case for having a balance. Obviously, one must have a view as to the type of investment that one wants. After all, one would not want merely to attract screwdriver plants; one must have a qualitative attitude to the sort of investment that comes in. The hon. Gentleman is right in identifying the fact that economic logic requires a certain amount of inward investment.
Mrs. Fyfe: The hon. Gentleman talks as though depressed areas can easily pick and choose where investment comes from. Industry disappeared from the area that I represent decades ago. Maryhill was at the heart of the industrial revolution and all that industry has gone. Frankly, if an investor from Mars were offering jobs in Maryhill, I would take up the offer.
Mr. Swayne: I hope that the hon. Lady will be successful in that bid for inward investment. I was talking not so much of the ability to pick and choose as of the logic of economic theory, which would require inward investment.
Another aspect of the work of Scottish Enterprise is that of the funds that it maintains to provide venture or seedcorn capital for business start-ups that would otherwise not be able to secure such funds. By its very nature, that is a risky business and it leads to a significant element of loss. Arguably, that is of necessity so. Indeed, if the figures for Scottish Enterprise did not show such losses, it could be argued that it was not doing its job properly by providing for industries that would otherwise not be able to secure such capital and so would never start up. There has to be a balance, but I am not wholly persuaded by the argument.
However, I do not want to go into that. I want to question why Scottish Enterprise finds itself in that position at all. Many years ago, there were agencies for

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providing such capital. It is all very well for us to complain that the banks do not fulfil that role, but it was never their role to provide venture capital. In the great age of Glasgow—the industrial revolution—the main source of capital for risky enterprises was from within an entrepreneur's own family. Why has that source of capital almost completely disappeared throughout the realm? One cannot blame it on new Labour even if, in this age of consensus and new politics, one were minded to do so. That situation arose not only in this century but in the past century—
Mr. Dominic Grieve: Is not the answer simple? It is due to the failure of wealth to cascade down the generations.
Mr. Swayne: My hon. Friend has a pertinent point. As the state has taken on a series of activities, it has displaced—
Mr. Deputy Speaker: Order. I am interested in what the hon. Gentleman has to say, in particular about the history of my native city, Glasgow, but he must be more specific. He must deal with the Bill, not wander through the economic problems of the United Kingdom.
Mr. Swayne: Thank you for your guidance, Mr. Deputy Speaker. You will be relieved to hear that I am drawing to my peroration. The point that I am seeking to make is that we are about to provide an agency that already spends a great deal of public money with an additional £1 billion. I am questioning the necessity of that process.
Mr. Letwin: I want to ask my hon. Friend a question that is absolutely specific to Scottish Enterprise and that I neglected to draw to the attention of the Minister earlier. Is he aware that of the approximately £3 billion that Scottish Enterprise has so far consumed, total investments—apart from those in property—amount to some £51 million, showing that some £2.95 billion has not gone into investments currently held?
Mr. Swayne: I thank my hon. Friend for that intervention, which is highly pertinent at this time.
My hon. Friend the Member for Beaconsfield (Mr. Grieve) pointed out that, as the state has taken on greater and greater activities for itself, it has displaced the activity and responsibility that would otherwise have come from individuals and their families. The state has reduced the incentive to save by funding such activities through taxing savings, income and, very importantly, inheritance—so much so that the diffusion of wealth throughout the population no longer exists to fund the activities of venture capital. That is why this Bill which requires the state to provide funding is before us today.
6.2 pm
Mr. Russell Brown: Follow that, as they say. Unlike my hon. Friend the Member for Ayr (Ms Osborne), let me tell the hon. Member for West Dorset (Mr. Letwin) that I shall be catching a train this evening and, like Cinderella, hope to be home before midnight.
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I welcome the opportunity to support the Scottish Enterprise Bill which will provide financial cover for various activities over the next two years. Thereafter, as has been said, that will become the responsibility of our Scottish Parliament. Naturally those resources filter down to local areas. For an area such as my constituency, which has seen significant job losses over recent months, any additional support that may flow from these moneys will be welcome. Hon. Members have spoken of the major role played by Scottish Enterprise and, like them, I welcome the new network strategy document that was announced earlier this week by my noble Friend Lord Macdonald of Tradeston.
Only this week 20 job losses in heavy engineering and a further 80 job losses in the polyester film manufacturing business in my constituency were announced. The ICI site that offered about 800 manufacturing jobs during the summer of 1997 will by the middle of this year offer only 350 jobs. The collapse of the Asian market and the decision of multinational companies to change their portfolios and abandon certain manufacturing sectors can have a devastating effect on rural areas. Dumfries, Galloway and the Scottish borders have felt some of these devastating consequences during the past 12 months.
Given that in recent months we have had about 600 job losses announced in my locality, it comes as a surprise to many people that unemployment figures do not show significant increases. I do not want to play down job losses because losing a job is a personal tragedy for anyone. However, far from the significant job losses being shown in an increase in unemployment, compared with this time last year, the statistics show a 3.7 per cent. reduction in people seeking employment and claiming jobseeker's allowance; compared with two years ago, the reduction is 20.4 per cent.
After the numerous job losses, my noble Friend Lord Macdonald of Tradeston visited our locality.
Mr. Moore: I know that the hon. Gentleman will develop his point, but does he agree, given our similar experiences of rural issues in the south of Scotland—the hon. Member for Galloway and Upper Nithsdale (Mr. Morgan) is also here—that when people lose their jobs, they are forced to leave the area? That artificially suppresses the unemployment rate. Does he agree that many of the worst recent job announcements have yet to kick directly into the statistics?
Mr. Brown: I agree to some extent. People in the hon. Gentleman's area may leave the locality to seek employment elsewhere, but that is not necessarily so in my constituency. He said that some job losses had yet to kick in, but my figures relate to people who have become unemployed and are a true reflection of what is happening.
The position has undoubtedly been helped by the excellent performance of Dumfries and Galloway enterprise company. Like so many such companies, its assistance is welcome in difficult times. Rural areas cannot attract inward investors who would bring 400 or 500 jobs at a stroke to one place. I therefore believe that it is even more important for the local enterprise company to spread its financial resources over as wide a variety of activities as possible.
According to its most recent annual report, my local enterprise company, which also covers the constituency of the hon. Member for Galloway and Upper Nithsdale

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(Mr. Morgan), provided information and assistance to 247 companies and helped 271 businesses to start up. The general public often miss such figures. It assisted 45 exporting companies and advised four potential inward investors. It supported 28 food, 27 forestry and 73 tourism businesses.
In such a large rural area, the importance of the ability to support 750 companies in training their staff cannot be overstated. Such training, in programmes such as skill seekers and training for work, helped some 230 long-term unemployed people attain employment. That is an excellent step forward for those who have fought so long and hard to find employment. It is also worth mentioning that 20 companies committed to the Investors in People standard during that year.
Dumfries and Galloway Enterprise is involved directly in the delivery of the new deal in my area. As a member of the strategic partnership formed to deliver the initiative, it is leading on the management and delivery of the employment option and the full-time training and education option. It sees its role in the new deal as an increasingly important part of the economic inclusion activity.
I mentioned previously that 271 new businesses had started up. That element of entrepreneurship continues to be a strong feature of the local economy in rural areas. Rural areas depend on small and medium-sized businesses. The launch of a new business start-up programme has proved invaluable to so many people who have been seeking opportunities to start a business.
The importance of tourism in rural areas can be shown by the numbers employed in that sector. Almost 10 per cent. of the area' s work force is employed in the industry and last year we saw the development of a partnership that established our area's first integrated tourism strategy, in which a comprehensive vision for the industry's development was set out.
The ability to offer market research, exhibition support and overseas promotional literature assisted the previously mentioned 45 exporting businesses in the locality. In what is clearly recognised as a difficult time for export companies, the enterprise company's intervention is expected to have led to a growth in direct sales of just less than £1 million. That activity, along with other activities that my hon. Friends and hon. Members have mentioned in the realms of property and environmental improvements, as well as assistance to a significant number of property-based initiatives, has shown just what can be done in rural areas by local enterprise companies.
The Bill offers the opportunity to support through Scottish Enterprise a significant amount of economic activity that might otherwise never happen. I hope that hon. Members on both sides of the House see fit to support it.
6.11 pm
Mr. Laurence Robertson: I am rather amazed to find myself talking at this hour about the Scottish Enterprise Bill.
Mr. David Marshall: So are we.
Mr. Robertson: With a name like Robertson, I am perhaps entitled to offer one or two words on the Bill.
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When I looked at the Bill I was even more amazed. The thing that caught my eye was the extraordinary amount of money that we are talking about—not just the extra £1 billion but the almost £3 billion that has already been spent. I welcome the removal of Ministers' ability to increase the amounts by statutory instrument, but I want to make a short speech that my hon. Friend the Member for West Dorset (Mr. Letwin) might describe as a probing speech. I wish to ask a few questions and seek clarification.
I am concerned that responsibility for Scottish Enterprise will pass to the Scottish Parliament. It is not a matter of whether the Scots, the English, the Welsh or people from Northern Ireland are competent to deal with their own affairs, but the amount of money is so enormous that it inevitably comes from the United Kingdom taxpayer. Should not the United Kingdom Parliament have some control over it? If Labour Members feel that the money is well spent and benefits the people of Scotland to such an extent, would they be happy for the people of Scotland to provide it in its entirety? If they are, I suggest that the Scottish Parliament would need to increase the tax in Scotland by more than the 3p in the pound by which it is entitled to increase tax. I wonder whether it would have been better to delay introduction of the Bill until the Scottish Parliament was up and running. The responsibilities would have been clearer.
Mrs. Fyfe: Does the hon. Gentleman realise that so far he is presenting only one half of the equation? If all the investment effort is successful, the jobless figures will fall and therefore unemployment benefit costs will fall, which will benefit the United Kingdom taxpayer.
Mr. Robertson: If that happens, that may well be the case. I have probably presented only one half of the equation because I am only a quarter of the way through my speech. Who will pay? The hon. Lady makes a good point. Will Scottish Enterprise be self-financing? What returns can we expect from the new companies that are created which otherwise would not have been created? That has to be the question. What will they contribute in terms of corporation tax, job creation and jobs retained—which is important—and in terms of inward investment attracted? In other words, is this money well spent?
I wish to put the amount into context. My hon. Friend the Member for West Dorset mentioned the number of nurses who could be employed by the extra money. The £4 billion over the period in question would run the health service for quite a few weeks. The health service employs about 1 million people. In that context, the figures quoted this afternoon are not impressive.
Mr. Alasdair Morgan: Does the hon. Gentleman accept that the Bill will not increase the sum available to the Scottish Parliament because that is clearly laid down by the Scotland Act 1998 and the Barnett formula? If the Scottish Parliament finds that money, it will be at the expense of other items of expenditure. The hon. Gentleman appears to want the House to supervise the Scottish budget in total.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. It is not in order to go down that track. We must

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concentrate on the Bill before us, not the wider issue, which has already been raised once in the debate and which I hoped I had expelled.
Mr. Robertson: Thank you, Mr. Deputy Speaker, for rescuing me from going down a complicated path.
May I put the £4 billion in another context? I was saying how many people it could help and how long it could run the health service, for example, which employs 1 million people; but given that the entire population of Scotland over the age of 16 numbers just over 4 million and the economically active population is only 2.5 million, it seems an extraordinarily large sum to spend on such a small work force. That is not to undervalue that work force; my argument is whether it is money well spent. The money might be better spent elsewhere, as the hon. Member for Galloway and Upper Nithsdale (Mr. Morgan) might have been suggesting, or perhaps left in the pocket of the taxpayer, who knows how to spend it better than Governments.
A number of differing figures have been quoted this afternoon. They also differ from the figures that I shall give. In an earlier intervention I quoted the chief executive of Scottish Enterprise. I shall do so again for the benefit of hon. Members who were not in the Chamber then. He claimed in the annual report that Scottish Enterprise has helped to attract inward investment of £1 billion, and created or retained 18,000 jobs and 36,000 training places. Yet he says:
"Scotland …still lags behind the rest of the UK in the number of businesses emerging".

The chairman of Scottish Enterprise, Sir Ian Wood, says that Scottish Enterprise has
"added £600 million to Scotland's GDP."
Those figures may sound impressive, but compared with what Scottish Enterprise has cost, they are not impressive at all. The agency has not moved Scotland on very far. Will the Minister assure us that the money will be well spent and will result in gains to Scotland that are proportionate to the cost of the schemes?
Mr. Moore: Is the hon. Gentleman suggesting that economic development is not a valid purpose for Government expenditure, or is he contending, by contrast, that Scottish Enterprise is particularly inefficient in terms of economic development? If it is the latter, what benchmark is he using to make that suggestion?
Mr. Robertson: I have used a number of benchmarks, the best of which is the fact that the chairman of Scottish Enterprise, Sir Ian Wood, says that it has added £600 million to Scotland's GDP. However, if one averages out what the agency has cost since its creation, that £600 million is not impressive. One must ask how much of it would have existed had the money not been spent in the first place.
I shall bring my remarks to a close because I am interested in hearing the Minister's response. Will he assure us that the value for money of Scottish Enterprise will be constantly monitored?
6.19 pm
Mr. Dominic Grieve: I shall try to keep my remarks brief. Whenever I have participated in Scottish debates in the past and told the House that I would be brief, I have usually succeeded in keeping to that undertaking.
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It is a great pleasure to participate in this debate and to have listened to it. During the long passage of the devolution Bill, when I spent many long hours on the Benches, I realised how much one learns about issues concerning places other than one's own constituency when one bothers to attend debates in this Chamber.
I hope that you, Mr. Deputy Speaker, will allow me to go slightly beyond the Bill, because I want to refer to the necessity for Members of Parliament to be kept informed of what goes on nationwide. I am satisfied that the Bill should commend itself to the House, and I accept that Scottish Enterprise has been beneficial in Scotland, so I have no objection to raising the limits.
However, the comments of my hon. Friend the Member for West Dorset (Mr. Letwin) about the lack of past scrutiny of the activities of Scottish Enterprise are perfectly valid. The House has previously discussed the problem of our ability to scrutinise every aspect of Government activity. I suspect that the Scottish Parliament may also have that problem, especially if every day it packs up at 5 o'clock in the afternoon—it is now a quarter past six. Bills should not be allowed to be nodded through. They require explanation, and I hope that the Minister will deal with my hon. Friend's points, if only briefly, when he winds up the debate.
Some issues go beyond the Bill, which I am told is the last we shall consider before the Scottish Parliament comes into being. Finance is at the root of what makes a unified nation state. We all have concerns about one another's finances. During the devolution debate, and even this evening, I heard enough compelling speeches, such as that of the hon. Member for Ayr (Ms Osborne) about the particular needs of her constituency, to know that there is competition nationally for the allocation of funds. If any issue is to cause problems and dissent when the Scottish Parliament is established, it will be finance.
I listen to Government Members who represent English constituencies, particularly in the north-west. It is clear that, even though this money may come from the block grant, the block grant itself will be up for consideration far more frequently once the Scottish Parliament is established. Therefore, those of us who believe in the Union—that applies across the Benches—argue that continuing, adequate information should be provided to hon. Members about how money is spent north of the border after the Scottish Parliament comes into being. If it is not provided, that will be a fertile area of misunderstanding. New mechanisms will have to be established in this Parliament so that we can be given that information.
Mr. Dalyell: What mechanisms would the hon. Gentleman like to see? This is a serious point.
Mr. Grieve: We shall have to look beyond the existing Select Committee system to provide mechanisms for frequent contact between Members of the House and Members of the Scottish Parliament in Edinburgh, for the exchange of information, if not on a statutory basis then according to growing conventions, and for relevant Ministers to explain to hon. Members whether they are satisfied with the way in which expenditure is being handled north of the border. I do not see that as unwarranted interference, because Members of the Scottish Parliament should be entitled to obtain answers on those aspects through representatives at Westminster on issues that concern England alone.

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As these new mechanisms come into being, I should like to see them work. I hope that the hon. Members present who were also present during the devolution debate are aware that I want the new system to succeed, even if I have reservations about it. I hope that the Minister will take my comments on board, because without such mechanisms an interesting debate will not happen and misunderstandings will build up. That will ultimately threaten the Union, so we must get the exchange of financial information right.
6.24 pm
Mr. Macdonald: With the leave of the House, Mr. Deputy Speaker.
Despite its technical start, the debate has been interesting. I think that the point on which the debate concluded is the point that began it, but I shall deal with that later, when I respond to what was said by the hon. Member for West Dorset (Mr. Letwin).
The hon. Member for Tewkesbury (Mr. Robertson) asked why we could not delay the whole business until the Scottish Parliament was up and running. The purpose of the Bill, however, is to enable Scottish Enterprise to continue its operations until the Parliament is up and running. If it is not presented and passed, Scottish Enterprise cannot do that. I think we all agree that it is important for Scottish Enterprise to continue its work. We have extended the limit for a minimal period, so that the Parliament can decide on future arrangements when it has been established.
The hon. Member for New Forest, West (Mr. Swayne) mentioned reductions in support for training. Under the new deal, an extra £300 million is being spent in Scotland over the lifetime of this Parliament—much more than was available to Scottish Enterprise before. Indeed, this is the biggest training programme in peacetime history.
The hon. Gentleman also made a plea for balance in terms of efforts to attract inward investment. Scottish Enterprise tries to maintain that balance. It may interest the hon. Gentleman to learn that less than 10 per cent. of Scottish Enterprise's operational expenditure is devoted to inward investment and the attraction of such investment; the rest is devoted to companies that are already operating in Scotland.
My hon. Friends the Members for Dumfries (Mr. Brown) and for Ayr (Ms Osborne) made a number of important points, especially in regard to the difficulties and challenges that exist in their constituencies. Those points will be drawn to the attention of my noble Friend the Minister for Business and Industry, who will note them with interest. As both my hon. Friends will know, my noble Friend recently met representatives from Dumfries and Galloway, and expects to meet representatives again in the next month or so. Many of the points that have been raised can be pursued then. The Scottish Office has now joined the Ayrshire economic forum. My noble Friend attended the forum's last meeting before the end of last year, and will attend the next on 25 January.
The hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) welcomed the action plan drawn up for the borders, and I welcome his positive comments.
1110
He suggested that the plan could provide a model or template for the future, and I agree that there are lessons to be drawn from the necessary speed with which Scottish Enterprise responded to the crisis in the borders. I certainly think that the way in which the action plan was put together by the working party provides a model from which we can learn lessons for the future.
The hon. Gentleman also emphasised the importance of infrastructure to economic development. Infrastructure is important for the borders, and also for my part of Scotland. It is taken into account in the current roads review, and the hon. Gentleman can be assured that officials from the Department that deals with transport, who are working on that review, try to consider the economic impact and the benefits of the various roads proposals. They are always grateful for the advice and information that they receive from Scottish Enterprise and from officials in the Department of Trade and Industry, so the communication that he was looking for is there.
The hon. Member for West Dorset raised a number of issues. Essentially, he asked questions about the value for money achieved through expenditure on Scottish Enterprise. He had particular queries and points in that respect, but he also couched the matter in a larger question about scrutiny of Scottish Enterprise post devolution.
As regards the first point, I can reassure the hon. Gentleman on the specific points that he made. Scottish Enterprise has not escaped scrutiny. In 1996, the National Audit Office published a report on Scottish Enterprise following a two-year review by the NAO that was obviously extremely thorough. It made several points to Scottish Enterprise. I think that the balance of them was positive in terms of the frame of controls that Scottish Enterprise has established to secure value for money.
The hon. Gentleman noted that the Public Accounts Committee had not conducted its own investigation of Scottish Enterprise, but the NAO conducted that thorough review, which was presented to the PAC. I do not know the practical reason why the PAC did not take that further, but one assumes that it was because it was satisfied with the outcome of the NAO report, Therefore, I hope that the hon. Gentleman can take reassurance from that and will rest his case not on any fears that Scottish Enterprise is not achieving value for money, but on the wider constitutional points that he made.
Mr. Letwin: Of course the Minister is right that my main point is a constitutional one and about the future, rather than a financial point and about the past, but does he accept that the NAO report is interesting in that it looks in painstaking detail at the way in which the moneys that were disbursed, after administrative expenses and so forth, were used, and whether value for money was achieved in terms of cost per job? It also, I should add, examined internal auditing controls; I am not and have never suggested any impropriety and the NAO found none. However, does he agree that the report does not look at all closely at whether the organisation is, as a financial enterprise, running its internal affairs efficiently? Is that not surprising?
Mr. Macdonald: That is a point that the hon. Gentleman could take up with the NAO. Certainly the tone of the report is one of general satisfaction with the operations of Scottish Enterprise. Unless we know

1111
otherwise, we would do better in this Chamber to emphasise that positive side, albeit the hon. Gentleman wants to make those wider points about scrutiny. It would only be fair if, here, we accepted that the NAO issued a generally positive report on Scottish Enterprise, and we can only assume that it found favour with the Public Accounts Committee as well.
My hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) made the point that, during the Select Committee visit to north America, it heard glowing testimony of the high regard in which Scottish Enterprise is held in north America because of the nature and quality of its work and the way in which it is perceived. I agree with what he said about Scottish Enterprise strategy and I find nothing to disagree with his points about Glasgow in general. I agree particularly with the fact that we need to address the problems of Glasgow, not just through the efforts of Scottish Enterprise, but through other measures such as the new deal, social inclusion partnerships and so on.
My hon. Friend the Member for Shettleston also mentioned the subject of brown-field sites in Glasgow which, quite rightly, he raises frequently. The treatment of such sites is important and my hon. Friend will be reassured to know that £3 million has been ring-fenced specifically for the development of brown-field sites in Glasgow.
The future oversight of Scottish Enterprise will be a matter for the Scottish Parliament. It will be one of the agencies under the Scottish Executive. The Scottish Executive and its agencies will be held to account by the Parliament. One would assume that the Parliament will have its own audit committee, which, like the Public Accounts Committee, will play an active and powerful role in the life of that Parliament. From April next year, responsibility for auditing Scottish Enterprise will transfer to the auditor-general for Scotland. That may not answer the deeper questions about devolution that were asked by the hon. Member for West Dorset, but I believe that those are just points of disagreement between both sides of the House about the merits of devolution and the need to achieve it.
Mr. Letwin: Without entering the depths of the dispute, if there is one, will the hon. Gentleman clarify a point? Is he saying that, it is the Government's view that, following devolution and in the light of the audit arrangements which he no doubt correctly says will be established by the Scottish Parliament, there should be no opportunity for oversight by this House or this Parliament of the use of funds by agencies which come under the Scottish Parliament.?
Mr. Macdonald: I am sure that the hon. Gentleman will be free to make his own speeches after devolution and to raise any points that he wishes with the Government of the day about how that Government are spending
1112
their money. It is a firm view on the Labour Benches that those responsibilities and duties should be transferred to the Scottish Parliament and, in our view, it will be the responsibility of that Parliament to fulfil them.
Mr. Letwin: I am sorry to interrupt again; this will be my last intervention. Can the Minister tell us how far he intends to press that point? Is he saying that, even if there are suggestions in this House that moneys voted by this House through the block grant to the Scottish Parliament are being ill-used, he and his colleagues do not intend to set up any specific mechanism to enable the taxpayers of the United Kingdom, as represented in this House, to investigate that?
Mr. Macdonald: I am confident that the Scottish Parliament will be able to acquit its financial duties and its responsibility for oversight of the agencies every bit as competently as the current Parliament and Government are able to do. As I have said, I am sure that the hon. Gentleman and his colleagues will be able to make their own speeches and raise their own points in their own way post-devolution. I hope that he will at least accept that, within the Parliament, there will be a powerful mechanism for ensuring proper oversight of those agencies.
I am grateful to have had the opportunity to respond to this debate. Although it is a technical Bill, it has raised some interesting issues. As I explained at the beginning of my speech, the Bill is intended simply to raise the aggregate limit for Scottish Enterprise to allow it to continue its important work, which I am grateful to note has received cross-party support. I commend the measure to the House.
Question put and agreed to.
Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

SCOTTISH ENTERPRISE BILL [MONEY]
Queen's recommendation having been signified—
Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
That, for the purposes of any Act resulting from the Scottish Enterprise Bill ("the Act"), it is expedient to authorize—
(1) any payment out of the National Loans Fund, the Consolidated Fund or money provided by Parliament resulting from increasing by the Act, to an amount not exceeding £4,000 million, the aggregate amount which is permitted to be outstanding, otherwise than by way of interest, in respect of the items mentioned in paragraphs (a) to (d) of section 25(2) of the Enterprise and New Towns (Scotland) Act 1990; and
(2) any increase, resulting from such increase, in the sums payable into the National Loans Fund or the Consolidated Fund.—[Mrs. McGuire.]
Question agreed to.

PETITION

  Evercreech Primary School
  6.40 pm
  Mr. David Heath: I should like to present, and offer my support for, a petition that I was given earlier this week at Evercreech primary school. I am grateful to the school's staff, children and governors for the welcome that they gave me. The petition has been signed by 250 people resident in Evercreech and in the surrounding district of Somerset, including the area's county councillor, Mrs. Gloria Cawood.
  The petition states:
  The number of pupils attending Evercreech Primary School, and the continuing popularity of the school, is such that class sizes are unacceptably large, and that one class now has 38 children, to the detriment of the educational opportunities offered to local children.
  Wherefore your Petitioners pray that your Honourable House will take such matters as lie within their powers to urge that the Secretary of State for Education and Employment ensures that such resources are available to Somerset County Council as may be required to provide an extra permanent classroom and one extra teacher for Evercreech Primary School.
  And your Petitioners, as in duty bound will ever pray etc.
  To lie upon the Table

  Parish and Town Councils
  Motion made, and Question proposed, That this House do now adjourn.—[Mrs. McGuire.]
  6.41 pm
  Mr. David Drew: I am delighted to have the opportunity to initiate this Adjournment debate. I start from the premise of a belief that often the importance of parish and town councils—or, as I shall refer to them, local councils—is undervalued and that the advantages that they offer, not only to their own community but as the basis of representative government, is underestimated.
  I should immediately declare an interest: I am a local councillor. I have been a Stonehouse town councillor for the past 12 years, and shall remain a local councillor if those in power will select and re-elect me.
  I realise that I am not the only hon. Member who has the onerous responsibility of being a local councillor. My hon. Friend the Member for North-West Leicestershire (Mr. Taylor) is a parish councillor in his constituency, and my right hon. Friend the Member for Bishop Auckland (Mr. Foster) is president of the Durham Association of Local Councils. Recently, I became a vice-president of the National Association of Local Councils. The Minister for Local Government and Housing once filled that position with distinction. It is interesting how we hon. Members begin our careers.
  I should like to give my thanks to all those who have served with me in local government. I should certainly like to thank my own councillors on Stonehouse town council and the two clerks who have been with the council for the past 12 years. I thank also all the other town councils with which I have had contact both before and especially since I was elected to the House.
  My constituency has 48 parish and town councils, consisting of the five town councils of Stonehouse, Dursley, Nailsworth, Stroud and Berkeley; 41 parish councils, which vary in size from Cam—which my old friend, Councillor Brian Addle, always assures me is the biggest parish in Gloucestershire —to very small parishes, such as Brookthorpe-with-Whaddon, Standish, Elmore and Miserden. Finally, but not least, it has two parish meetings—which hon. Members who know about such matters will realise comprise the lowest level of representative democracy and meet only very occasionally, when the need arises—at Moreton Valence and Owlpen.
  I should like to make special mention of two people who have helped me to compile my notes for this speech: Stephen Wright, the secretary of the Gloucestershire Association of Town and Parish Councils, who doubles as the director of the Gloucestershire rural community council; and Robin Wendt, the chief executive of the National Association of Local Councils.
  Local councils tend to be seen as the lowest and least form of democracy and are sometimes parodied as something of a French farce. In "The Vicar of Dibley" they are portrayed as not as serious as they could be. It is easy to think of local councils in that way, but those who serve on them regard their role as important. Although it is not always easy to get people to serve, councils are an important part of the democratic process. When they work, they work very well.

  1115
  The councils that set out to fulfil their role and take it seriously are many and varied throughout the country. The late Professor Bryan Keith Lucas, emeritus professor of government at the University of Kent, said:
  "It would be difficult to exaggerate the diversity of parishes and how their councils provide for them."
  That comes from the foreword to the 1997 book "Parish Government 1894–1994", which he co-authored with K. P. Poole.
  Lord Faversham, currently president of the NALC, has said that local democracy is a vital element in a healthy state and that parish, town and community councillors can make local councils a relevant, valuable and necessary part of the governance of this country in the 21st century.
  We are all aware of the historical importance of parishes. When people say where they come from, they often refer to their parish rather than a large city or a town. Parishes go back way beyond the creation of parish councils. That historical link is good to see. Only in the Local Government Act 1894 were civil parishes formally created. That was reaffirmed in the Local Government Act 1972. Although both Acts were widely welcomed, they were also opposed by some in authority—the landed gentry and the Church in the first example and larger councils in the second, because they saw local councils as a threat. How things move on and sometimes come round.
  There is a tremendous range of local councils—10,000 in England and Wales, as well as Scotland's community councils. They vary in size, with the larger ones, such as Bracknell, Dunstable and Oswestry, covering sizeable populations, while the smaller ones cover only 100 or 200 people. Their variety and diversity is their strength.
  Local councils have about 50 powers and duties. There is tremendous variation in how they are exercised. Some exercise them widely, while others use them in only a limited way. It is important that however the powers are exercised, the councils are supported and regarded as important. Pleasingly, the powers of local councils were re-established in the Local Government and Rating Act 1997, when the previous Secretary of State, the right hon. Member for Suffolk, Coastal (Mr. Gummer), gave them new powers over crime, transport and traffic control.
  Local councils are an important part of the local government scene. It is easy to parody them as places where people just talk and little happens, but they can achieve a considerable amount and look after their population in many ways. Interestingly, it is the only part of local government in which it is not easy to control expenditure. I always whisper that very quietly as it could be considered to be a door that needs to be shut. I shall move on quickly as my hon. Friend the Minister is looking at me.
  Local government—unitary authorities or two tiers of local government—often forgets that there is a third tier or, in the case of unitary authorities, a valuable second tier. Nowadays much emphasis is placed on joint working between the principal authority and local councils, but there is always room for improvement. If the move towards unitary authorities continues and gathers pace, rather than threatening parish and town councils, it may encourage them and further enhance their role. The process will be hastened if, as seems likely, we dispense with some of the councillors on the larger authorities and genuinely try to bring back local decision making and get councillors in touch with the populace.
  1116
  Although the Government's approach to modernising local government is welcome, it is slightly disappointing that the White Paper "In Touch with the People" does not make much mention of local councils although it recognises that they are
  "an essential part of the structure of local democracy in our country"
  and
  "will continue to play a key role in many of our towns and villages".
  It recognises that they have
  "a vital role in helping principal councils keep in touch with the smallest communities"
  and making sure that they can work in partnership so that the best decisions are made.
  Welcome as those words are, local councillors believe that their role could be further enhanced and their value given greater emphasis. I hope that the forthcoming urban and rural White Papers will stress the role of local councils.
  Mr. Laurence Robertson: Does the hon. Gentleman agree that one way to increase the perceived importance of town councils would be to give them a greater say in the planning process? Like me, the hon. Gentleman comes from Gloucestershire, so he will be aware that people's views, expressed through the town councils, are being overridden by unelected inspectors.
  Mr. Drew: I shall not take up that challenge, but the hon. Gentleman knows my views on planning, as do many other hon. Members. I concur that there would probably be great benefit if local opinion, which is reflected in parish and town councils, were listened to more carefully, not just as part of the appeal process, but in advance of that process. Certainly when appeals are heard, it would nice for local councils to be given a proper role in the process.
  I should like some answers from my hon. Friend about some specific issues, some of which are more important than others. My starting point is what I consider to be the Government's interest and concern for uprating and improving local government structure and the new ethical framework. Local councils support the Government's desire to provide an ethical framework for local government, based on codes of conduct, standards committees and so on. However, there is a belief that the concept is being passed down to them, rather than being created in the context of how local councils can best perform. That does not fully recognise the position of local councils in their own right. The alternative suggestion from the NALC is that local councils in each county area should prepare their own code of conduct in the light of national advice. The Government should be urged to rethink and clarify how that could be taken forward.
  The second issue is best value. Again, local councils strongly support the approach of the Government in that regard. The policy intention is that the new regime will apply to all local authorities, including local councils, with budgeted expenditure above a defined threshold. The Government have indicated that that may be set at £500,000, subject to further consultation. Many local councils would allege that that is a low level, and it would be sensible for the Government to consider raising it. It is understood that the Government will consult with the NALC about the issue, and I look forward to hearing the result.

  1117
  The third issue is community leadership, and again it is proposed that there be a new duty on all manner of local authorities to promote the social and economic well-being of communities. That will apply to the lowest level of local government. It would be sensible to recognise that that can be achieved by those councils in the lowest category, and again we would hope that the remit of such councils would be properly constituted and understood. I believe that it should be the right of every area, if it so wishes, to have a local council—whether that be a parish, a town or a community council.
  It is pleasing that although every part of my area is now parished, other parts of Gloucestershire, which were traditionally not completely parished—such as the Cotswolds and the Forest of Dean—are now creating parish councils, which seem to be popular. I hope that the Government will welcome and encourage that, and not see it as a threat to other levels of local democracy.
  My fourth point concerns the European charter of local self-government. There was concern, surprise and disappointment among councils that they were not included when the Government decided to ratify the charter. Councils, along with the principal authorities, had looked forward to the signing of the charter by the new Government and to its eventual ratification. They were taken aback when it was not applied to them, and the Government ought to think about the benefits of so doing.
  I would link that with the local councils' welcome for the regionalisation of this country. They feel that they can play a part in helping that process. They would not want to have a formal role within regional development agencies, but some disappointment has been expressed at the fact that they have not always been included in the proposals or action plans for the evolution of the relevant chambers. That is not true in all areas and, in the south-west, there is a representation of local councillors through to the regional chamber. However, that is not always the case.
  There are some real concerns about funding, as well as about the auditing and accounting regimes—certainly about the way in which local councils can borrow, which has been referred to as loan sanctioning. The restriction in total to £6.7 million a year is seen to be unduly restrictive. My largest town council, Stroud, has been seeking to borrow money, quite justifiably, for a particular project, but it is like waiting for Buggins's turn to get the money. That is neither fair nor reasonable, and I hope that the Minister will comment on whether it will be possible to increase the total amount and consider whether that could be shared out fairly.
  The concern among parish and town councils about auditing and accounting is the principal reason for this Adjournment debate. They are concerned, first, about the imposition by regulation of a £5,000 a year spending threshold, above which all local council accounts are subjected to the full audit regime. Secondly, many councils are unhappy with the audit system itself because they consider it to be excessively prolonged, thus increasing fees. Complaints have also been raised at times about a lack of professionalism. Councils do not have the time to do what they want to do to meet the requirements of the Audit Commission.
  It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. McAvoy.]
  Mr. Drew: I undertook a survey and found that many councils were concerned about how the audit system was being applied. Many said that they wanted changes. By pure chance, I was sent some information a couple of days ago by Cotswold district council showing that Adlestrop had a precept of £181 a year and an audit fee of £168; one may well ask what happened to the other £13, but it is a question of precepting for a purpose.
  Local councils have an important role to play. They are well respected in their communities. With proper training and support, the councillors and clerks can serve their populations well. I hope that my hon. Friend will consider ways in which we can further enhance the lower levels of local government and regard them not as an amusing aside but as an important part of our democratic structures.
  7.1 pm
  The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): I congratulate my hon. Friend the Member for Stroud (Mr. Drew) on his success in the ballot, and on raising the subject of the role of parish and town councils. It was apparent from what he said that he has great experience of the operation of local councils, especially in Gloucestershire. The role of town and parish councils is a matter of real concern at a time when everyone in local government is rightly considering the way in which their institutions operate and the role that local authorities, including parish councils, play in the democratic structure.
  The enactment of the Local Government and Rating Act 1997, with full support from the current Government, reflects the valid role that parishes have to play. The implementation of that Act—the first parish-focused legislation in over 25 years, which the previous Government took through Parliament with our support—has enabled communities for the first time to petition for a parish in an unparished area and has returned the power to district councils to undertake reviews of their parish arrangements.
  We have already agreed a number of new parishes and 20 will have been constituted by 1 April. I think that that provides a response to what my hon. Friend said and proves that we see a role for parishes in the democratic structure and that we are already encouraging the creation of more local councils.
  When we were elected in May 1997 we pledged to modernise the country and bring government back to the people; and to create a new Britain for the new millennium—a decent society that serves all its people and not only the few. We are now implementing the most radical improvement to our constitution this century, with devolution for Scotland and Wales; a London Assembly with an elected mayor; and development agencies for the English regions.
  Our better government initiative, along with the comprehensive spending review and our work on freedom of information, has examined how government can function more effectively and openly; but if we are to achieve change and deliver our pledges we need to mobilise all levels of government and society to work together. Local government at every level has a key role to play if people are to have the quality of life that they deserve. That must and should include parishes.

  1119
  Local government is essential to our democracy but it is not as strong as it ought to be. One does not have to look far to see the weaknesses: low turnout at local elections—only 26 per cent. last May—and 2 million absentees from the electoral register. Too few people find local government interesting enough to bother to register or vote. We want to encourage the public to become more involved in local democracy and we hope that parishes will use their role as representatives of their communities to encourage local people to take part and have their say.
  The White Paper "Modern Local Government: In Touch with the People" put in place an ambitious programme of reform for the next 10 years or more. To implement that programme requires action by central Government and local government, local communities, business and the voluntary sector. I hope that parish councils will play their part. They have an important role to play in local decision making and provide a valuable opportunity for local people to take part in managing their environment. That is especially true in rural areas where parish councils are vital in representing, and servicing at the most local level, small and often tightly knit communities.
  My hon. Friend the Member for Stroud referred to the rural White Paper. Thriving rural communities are an integral part of the Government's vision of a fair and decent society. Rural England is changing and we must respond to that change. We have therefore announced plans to produce the rural White Paper this year. It will look at the long-term future for the English countryside and at how a wide range of policies can support rural communities in the future. Work will proceed in tandem with the urban White Paper, recognising that town and country are inextricably linked. Consultation will be an important part of the process, so we will shortly issue a discussion document setting out key themes and inviting comments in advance of the publication of the White Papers. The National Association of Local Councils will of course be one of the consultees and is to help us in ensuring the consultation paper is seen by parish councils. I can assure my hon. Friend that any comments made by parishes will be carefully considered.
  As my hon. Friend the Member for Stroud made clear, there are wide variations between individual local councils, not least in size. While town and parish councils, and their representatives, play a vital representative role both locally and nationally, most parish councils have a limited role in terms of expenditure, functions and staff resources when compared with principal councils. Therefore, few of the changes we are considering for local authorities as a result of our local government White Paper will affect parish councils directly. Indeed, in many ways, because of their very local nature they are already close to their communities and, of course, as was mentioned, parish councils are unique in that every local government elector for such councils has the right to raise any matter affecting parish business at the annual parish meeting. In that respect, I agree that democracy is already more direct than in the case of other tiers of local government.
  Minsters meet the National Association of Local Councils regularly. My hon. Friend the Minister for Local Government and Housing spoke at the NALC conference last year and met with NALC representatives most recently only last month where all the issues raised today were discussed in some detail. I shall therefore cover them only briefly now.
  1120
  I note the comments by my hon. Friend the Member for Stroud on the new ethical framework, but the important thing to note is that local codes of conduct will be drawn up in consultation with local councils. As for best value, we are consulting various local government associations, including NALC, to consider the extent to which local councils should be subject to the best value regime. I am pleased to hear my hon. Friend's comments on the wish of local councils to play a positive role in the development of best value.
  As I have already said, ministerial agreement to a number of new parishes confirms our view that they have a role in community leadership where a parish is wanted by local people. As for the cost of elections, it is a matter for local discretion as to whether a district council chooses to reclaim the cost of a parish by-election from the parish council. I understand that the Home Office has no plans at present to reconsider the existing legislation.
  I do not intend to stray into the planning process, despite the temptation provided by the hon. Member for Tewkesbury (Mr. Robertson), but I note that the Rural Development Commission has provided assistance to parish councils through the production of a software package on village appraisals to aid them and others to understand their local community. That will help them to respond to the real challenges that arise from new planning proposals that affect their communities.
  I am sorry that the reasons why parish councils are not subject to the European charter of local self-government are not fully understood. Rather than rehearse those arguments, I shall write to my hon. Friend to set out more fully the reasons why the Government reached that decision. As for regional chambers, we believe that it is right that it should be for the chamber itself to decide whether parish councils should be members.
  As my hon. Friend is probably also aware, we are investigating the position on loan sanctions as the last two financial years have ended with a considerable balance of unused allocation. We need to be clear for future years about whether there is unmet demand. To that end it has been agreed that all borrowing approval applications will be submitted to my officials until the end of the financial year.
  The new audit arrangements have been in place for only two years. They must be given time to settle down. We recognise that some parish clerks will have had difficulties adjusting to the new requirements, but audits should become clearer and simpler as parish clerks become more familiar with the new regulations. No doubt the Audit Commission will welcome NALC's views on the system in practice.
  It has been said that the introduction of council tax benefit subsidy limitation would be a potential indirect cap on local council spending. That is not the case.
  Although local precepting authorities are outside the scheme, in that they will not make contributions to benefit costs where the local authority sets a council tax above guideline, changes in the local precept may affect the amount by which it exceeds the guideline and, thus, the contribution to costs. The Government believe it right that that cost is met, in part or in full, by the local taxpayer rather than nationally. We expect local precepting authorities to behave responsibly and to take that into account.

  1121
  We have received a number of representations from local authorities about the impact that parish council precepts may have on district budgets with regard to council tax benefit subsidy limitation. We will take them into account along with others before finalising the scheme.
  I am disappointed to hear that there is a reluctance to use the 1972 Act section 137 funding, as that was not our understanding. A number of larger town councils have made use of it, and, of course, the facility is there for all parish councils to use. Certainly a recent study found that the current section 137 arrangements are generally regarded as satisfactory by the vast majority of parish councils, and it is encouraging to see that local councils are increasingly using their section 137 power, and that they are doing so for a wider range of activities.
  Mr. Drew: There is some misunderstanding of exactly how section 137 operates. That is an example of where training and support, especially from principal councils, may be worth while, particularly for small parish councils or parish meetings.
  Mr. Raynsford: I hear what my hon. Friend says, and I shall write to him. I appreciate his concern for more information and training opportunities. The Government
  1122
  are not averse to helping to ensure that those who play a role in local councils are familiar with procedures and given help in understanding the available options.
  I hope that my hon. Friend is assured that the Government see parish and town councils remaining an essential part of the structure of local democracy in our country. I hope the councils will continue to play a key role in many of our towns and villages. For our part, we will continue to consult parishes, through NALC and other local government associations, on the many issues raised by our radical agenda for modernisation.
  I take this opportunity to refute accusations of not listening to parish council views. Ministers have listened to comments from NALC on a number of important recent issues and we meet them regularly to hear parish views.
  Let me assure the House that the Government recognise that, although parish councils, as an integral part of the whole local government system, do not need a separate modernisation exercise from principal local authorities, they do have a vital role. We hope that they will help principal councils to keep in touch with the smallest communities in their areas, and that they will take on board many of the initiatives that we are progressing with the higher tiers of local government.
  Question put and agreed to.
  Adjourned accordingly at thirteen minutes past Seven o ' clock.