Commons Sitting of 17 May 1999

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

    Libraries
    Mr. Shaun Woodward: What plans he has to prevent the closure of local libraries.[83407]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): On 19 February, I wrote to all library authorities to emphasise the importance that the Government attach to libraries, and to underline the point that unjustified closures risk placing authorities in breach of their statutory duties. I have subsequently initiated inquiries of a number of authorities, and shall continue to do so as necessary.
    Mr. Woodward: I am grateful to the Secretary of State for his response. However, does he not recognise that the Minister for the Arts recently said that he saw no justification for cuts in library services in the present financial climate? Yet in my county of Oxfordshire, over the past two years, more than £400,000 has been slashed from the budget for local libraries, resulting in cuts in the number of hours that libraries are open to those who wish to use them, cuts in book-buying ability, to the point that some libraries cannot buy books at all, and cuts recently in mobile library services—two mobile libraries have been removed. Mobile libraries provide a crucial service in a rural area and a crucial service for the elderly. Given the Minister's statement, does not the background that I have described make a complete mockery of the Secretary of State's belief that, somehow, the Government have a positive libraries policy?
    Mr. Smith: All library authorities have a duty under statute to provide a comprehensive and efficient library service. It is precisely because we had concerns about whether 10 authorities were fulfilling their obligations under statute that we have taken action. I am pleased to say that, following the inquiries that we have made of those authorities, many of them have already withdrawn proposals for closure or scaling down of their library services. I very much hope that others will follow.
    Mr. Derek Wyatt: Does my right hon. Friend think that the Public Libraries and
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    Museums Act 1964, which I am proud to say was introduced by a Labour Government, is strong with respect to libraries? If libraries are closed, will he look to amend that Act?
    Mr. Smith: I believe that the statute as it stands is strong enough, but that it has not been clearly enough defined. Nowhere is the definition of a comprehensive and efficient public library service spelled out. That is why I have initiated discussions with the Local Government Association and the Library Association. I wish to ascertain whether we can arrive at a consensus throughout the country on precisely what the interpretation of the statute should be.
    Mr. David Heath: Is it not the case that increasing demands for all library services, particularly IT, are being met with diminishing budgets because of pressure from other service areas? Is it not also the case that book funds throughout the country are being raided to maintain libraries and keep them open? Is there not a case for the right hon. Gentleman to look to match the statutory duty with a specific standard spending assessment element for libraries which is directly related to the level of service provided?
    Mr. Smith: The hon. Gentleman is right to draw attention to the development of IT services in libraries and the extra burden that that is undeniably placing on some library authorities. That is precisely why we have ensured that through the development of the new opportunities fund, which is funded by the lottery, we are making available not only £20 million for the training of librarians and £50 million for the development of digitised content, but £200 million for the development of IT services in libraries themselves. We have recognised that as additional expenditure that libraries will face and we are doing something about it. As for standard spending assessments, the hon. Gentleman will have noticed that this year's revenue support grant settlement is the best for years.

    Sport Governing Bodies
    Mr. Graham Stringer: What representations he has received about the democratic accountability of governing bodies within sport. [83408]
    The Minister for Sport (Mr. Tony Banks): I receive representations on a wide range of issues from, and about, many of the 414 governing bodies of sport in the UK which are, of course, independent and autonomous bodies and are accountable to their members. However, where governing bodies are in receipt of Exchequer funding, they are required to address issues of equity and representation.
    Mr. Stringer: I thank my hon. Friend for that answer. However, I was thinking more about the democratic accountability of international sporting bodies. Given the corruption that has been proved in the International Olympic Committee and the corruption that has been alleged against members of FIFA, can my hon. Friend

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    assure the House that the public money that is going into supporting England's bid to host the 2006 world cup will not be wasted by corrupt practices in FIFA?
    Mr. Banks: I am not responsible for international governing bodies, but I can certainly give my hon. Friend the assurances that he seeks with regard to the 2006 bid. Our bid is based on openness, honesty and merit. We expect all bids to be put forward on those same bases. We would not tolerate anyone putting his case forward on anything other than those bases.
    With regard to the allegations and innuendo that I have been reading in relation to FIFA and President Sepp Blatter, we have no evidence. I would prefer to react when or if we have evidence. I can assure my hon. Friend that were evidence to be put before us, there would be an appropriate response from the Government.
    Mr. Peter Ainsworth: On the subject of accountability, will the Minister tell the House what consultation with the governing bodies took place prior to last week's announcement that team sport would be downgraded in schools?
    Mr. Banks: Of course team sport will not be downgraded in schools. The hon. Gentleman should stop believing the stuff that he reads in newspapers. As he knows, there is a recommendation from the Qualifications and Curriculum Authority with regard to key stage 4. The idea is that team sport will be compulsory from key stage 1 to key stage 3. At key stage 4, where there is a clear indication that team sport lacks popularity among many children, particularly young women—
    Mr. John Bercow indicated dissent.
    Mr. Banks: The hon. Gentleman shakes his head, but he is not a young woman, so he would not know that fact. [Interruption.] I hope the operation is entirely successful.
    We want to make sure that the broadest choice of sport is given to youngsters. Let me make it clear that the Government, the Secretary of State and I are irrevocably committed to the promotion of competitive team sports in schools. If I thought that the Government were going to retreat from the promotion of competitive team sports, I would tender my resignation to the Prime Minister.
    Mr. Ainsworth: The hon. Gentleman had better get on with it. He spins one thing to the teachers, and another to people in sport, but he failed to answer my question. I asked what consultation took place with the governing bodies. I can help him, as we have spoken to the governing bodies. The Football Association, the All England Netball Association, the Rugby Football Union and the England and Wales Cricket Board all say that the news came as a complete shock.
    On the subject of reading newspapers, those bodies, like everyone else, had to find out the information through press reports of a leaked parliamentary answer in advance of that answer being given. Is that a responsible way for the Government to proceed? Before the Minister goes on to comment on the accountability of the sporting bodies, he might like to examine the Government's accountability in this regard.
    Mr. Banks: The recommendation is from the Qualifications and Curriculum Authority and it is now out
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    for consultation. For the first time, the Government have set an aspiration that all children should do two hours of sport every week. It is interesting that David Moorcroft, the chief executive of UK Athletics, said how much he welcomed that.
    I have had discussions about the erroneous and misleading caricature of our policy in the press, and I have had personal discussions with the England and Wales Cricket Board and the Football Association. They know that we are totally committed to team sports. Nothing that the hon. Gentleman can say will stop me making that clear. There is no question of the Government doing anything other than encouraging competitive team sports in our schools and outside them.
    Mr. John Maxton: Is it not a strange anomaly that when the sports councils give lottery money to golf clubs, they insist that the clubs practise gender equality, yet the Royal and Ancient golf club, which controls all golf in this country and much golf throughout the world, discriminates against women in terms of its membership and in terms of entrance into its clubhouse in St. Andrews? What pressure will my hon. Friend apply to ensure that the club obeys the same rules as golf clubs in the rest of the country?
    Mr. Banks: I have to be a little careful when I start treading into Scotland, as hon. Members know. We utterly condemn any discrimination by any governing bodies against women and ethnic minorities. The pressure that we can apply is to withhold funding from governing bodies that do not follow policies of equity. We were able to help to influence the progressive forces in the MCC to admit women to membership.
    In the final analysis, policy is a matter for members of governing bodies, and I am pleased to say that we have a very good working relationship with most governing bodies. Where there are any clear examples or evidence of discriminatory practices by governing bodies, if they are in receipt of Government and Exchequer funding, they will find that withdrawn. However, I am pleased to say how encouraging the attitudes of governing bodies now are. They recognise the need for equity and full representation, and they know that the Government will support them in their advances.
    Mr. Bercow: Why does not the Minister give up the unequal struggle, abandon his bluster and admit that there is no significant problem whatever of governing bodies not being accountable to sportsmen? The problem is that the Government are not accountable to the governing bodies or to those whose interests those bodies seek to promote. Given that, in the past week alone, the England and Wales Cricket Board, the National Playing Fields Association, Sir Bobby Charlton and Darren Gough have all publicly expressed their support for the continuation of compulsory team games, why cannot the Minister bring himself to admit that the decision to abolish that requirement post-14 is crass, insensitive and should be reversed?
    Mr. Banks: Because that is not true—it is as simple and as straightforward as that. At key stage 4, young people aged from 14 to 16 will be given a wide range of sports that they can pursue, including competitive team sports. The hon. Gentleman continues to propagate

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    the lies and misleading propaganda that were in the newspapers, which other people tend to follow, but he will find that the governing bodies and the people he has mentioned trust me far more than they trust him.

    Touring Productions
    Helen Jones (Warrington, North): What steps he is taking to encourage national theatre, opera and ballet companies to put on more touring productions. [83410]
    The Minister for the Arts (Mr. Alan Howarth): We continually make it clear that improving access to the arts is among our highest priorities, and the Arts Council of England shares our commitment. Many of the national companies, including the royal ballet, the Birmingham royal ballet, the Royal Shakespeare Company and the royal national theatre, already tour extensively across the country. Further touring has been supported by the Arts Council through the new audiences programme, which covers the whole of England.
    Helen Jones: I am grateful to my hon. Friend for that reply, but is he aware of the increasing disquiet in areas such as mine about the absence of many touring companies and the feeling that the regions are paying for companies that they never see? Is not it time that some of those companies became truly national rather than London companies and were made to tour as a condition of their grants? Will he put pressure on the Arts Council to bring that about?
    Mr. Howarth: We have increased the budget of the Arts Council touring department by nearly 6 per cent. and my hon. Friend will, of course, be aware that the budget for North West Arts is up 12.8 per cent. this year. She is right to say that increased public funding should bear with it an entitlement to increased access to the arts by all those who contribute funding.
    Among the major companies that have visited the north-west in the past year are the Royal Shakespeare Company, which has been to Ellesmere Port and to Morecambe; the royal national theatre, which has also been to Morecambe; the English national ballet, which has been to the Liverpool Empire and is returning for another week and for two weeks at the Palace theatre in Manchester; and the Birmingham royal ballet, which has also been to Liverpool and is going to Salford.
    I hope that my hon. Friend will agree that Manchester and Salford are not a million miles from Warrington. We will continue to do all we can to ensure that her constituents have the cultural opportunities that they ought to have.
    Mr. Nicholas Soames: The Minister should ignore the dismal whingeing from behind him and we should all rejoice in the scale and breadth of touring that companies undertake across the country, but will he see what he can do to encourage some of the great picture galleries of this country to lend more pictures to other institutions—perhaps to town halls and other places—so that people have the chance to see more of the regional aspect of some of the remarkable national picture collections in Britain?
    Mr. Howarth: The hon. Gentleman is absolutely right. He may be aware of the heritage lottery fund's £7 million
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    allocation for ensuring that there is access to such opportunities, which it will use at its discretion. He will also have noticed that my right hon. Friend the Secretary of State launched the 24-hour museum last week. This new national museum will, using new technology, provide remarkable opportunities for people to see great works of art in amazingly vivid imagery.
    Mr. Andrew Mackinlay: I congratulate my hon. Friend on his reply on production companies, but what strategy do the Government have for making theatre, opera and ballet available to and appreciated by working-class children? There needs to be a strategy and there is not one, and I hope that this radical Government see it as their duty to make theatre, opera and ballet available to kids in the most deprived parts of the United Kingdom. What does he say about that?
    Mr. Howarth: I assure my hon. Friend that that point is absolutely central to our strategy. We have made a commitment to ensuring that the arts play the wonderful part that they can play in education, and we insist on that in all the funding agreements that we have negotiated with the bodies that we fund. We find that those bodies readily welcome that, and share our strategy of ensuring that the arts play a far fuller part in education than they have hitherto.
    Mr. Dafydd Wigley: Given that the Minister represents Newport, he will be well aware of the considerable contribution made by the Welsh national opera, not only by way of touring in Wales, but in a number of centres in England. Can he say whether a draft concordat has been developed with the Executive of the National Assembly for Wales with regard to the future of the funding and organisation of that sort of activity, which clearly is of benefit both sides of the border?
    Mr. Howarth: I join the right hon. Gentleman in his praise for the Welsh national opera. I am pleased that it is jointly funded by the Arts Council of Wales and the Arts Council of England. Yes, my officials are working on the preparation of a draft concordat to take account of the new circumstances in Wales and we look forward to publishing it for consultation.

    Out of School Hours Activities
    Mrs. Sylvia Heal (Halesowen and Rowley Regis): How many schools he estimates will benefit in the first year of the national lottery-funded out of school hours activities. [83411]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): The number of schools that will benefit in the first year of the programme of out of school hours activities under the new opportunities fund will depend on the number of successful applications initially submitted. I hope, however, that many schools and local communities will want to take early advantage of the programme. It provides a good opportunity for the development of activities for pupils in homework, extra learning, arts, music and, I am very pleased to say, sport, including competitive team games.
    Mrs. Heal: While I welcome my right hon. Friend's comments, will he assure the House that the development

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    of the new opportunities fund and the initiatives that it provides will not have an adverse impact on the work of the other lottery distributors?
    Mr. Smith: I can, indeed, give that assurance to my hon. Friend. The number of people playing the lottery has been such that the expectations of the original lottery distributors have not only been met, but are already well on course to be exceeded. I can tell the House today that the money that good causes will receive from the national lottery is, according to the latest estimates, likely to be at least £250 million more than had previously been expected. Those new figures should mean at least £40 million extra each for the arts, heritage, sport and charities—and it could be considerably more.
    Mr. James Gray: Does not the Secretary of State find it odd to be answering questions that should much more properly be answered by the Secretary of State for Education and Employment? Is he doing so because the so-called new opportunities fund removes £3.7 billion from the good causes that should be funded from the lottery, and even if the money from the lottery goes up, it will do so by £3.7 billion less than it would otherwise have gone up? Is he not ashamed of that, and would not he prefer to answer questions on culture, media and sport rather than on education, the environment and health?
    Mr. Smith: We spelled out clearly during the election what we intended to do in terms of the creation of the new opportunities fund, and we have proceeded to do precisely that. We are a Government who believe in fulfilling the promises that we make to the electorate.

    Youth Theatre
    Ms Sally Keeble: What support his Department is providing for children's and youth theatre. [83412]
    The Minister for the Arts (Mr. Alan Howarth): Drama for and by children and young people receives funding provided by my Department through allocations of grant in aid to the Arts Council of England and the regional arts boards.
    Ms Keeble: Is my hon. Friend aware of the Royal, the Derngate and the Masque theatre groups in Northampton, which provide exceptional services in getting young people in my constituency involved in the theatre? Would he consider putting a requirement on the regional arts boards to provide, as part of their three-year deal, financing for new theatre groups, both those that involve young people and those that put on performances for children and young people?
    Mr. Howarth: I share my hon. Friend's enthusiasm for youth theatre. The funding agreement between the Arts Council and the regional arts boards will reflect our commitment to excellence, access and education. The Arts Council and the RABs will want to give the best support they can to youth theatre. I heard about "The Great Angels Bazaar", the Masque's successful production by children about the suffragettes. I am glad that Arts for Everyone is supporting New Perspectives' work with Masque, and that
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    the Derngate has been involved in a new audiences fund project to help young people in Northamptonshire to come to the theatre. I know that my right hon. Friend is looking forward to seeing some of the good things that are happening in the arts in Northamptonshire and in her area on his forthcoming visit to my hon. Friend's constituency.

    Museums (Free Entry)
    Mr. Phil Sawford: What plans he has to extend the provision of free entry for children to those national museums and galleries outside London. [83413]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): Since 1 April, entry for schoolchildren to all national museums and their branches has been free. I am delighted to say that that includes Duxford airfield in Cambridgeshire, the eight national museums and galleries on Merseyside, the zoological museum at Tring, the national railway museum at York, the Tate gallery in St. Ives, Fort Nelson in Portsmouth, and the museum of science and industry in Manchester.
    Mr. Sawford: I thank my hon. Friend for that answer. First, what action is his Department taking to encourage non-national museums to give children free entrance? Secondly, will he accept an invitation from me to visit the excellent Alfred East art gallery and the wonderful award-winning museum in Kettering, neither of which will charge him an entrance fee?
    Mr. Smith: I thank my hon. Friend for that generous invitation. When I have the opportunity to visit Kettering, I shall undoubtedly take him up on that offer. We have put in place a new fund for the designated museums—the 43 pre-eminent regional museums. That is a £15 million fund over the next three years. We have also supported the heritage lottery fund's ambitions by establishing a £7 million access fund. I hope that that will enable museums around the country to follow our example and ensure that children have the best possible access to our great collections.
    Mr. Mike Hancock: I welcome the fact that the museums outside London that the Secretary of State has listed give free entry to school children. Will he widen that list to include the heritage area in Portsmouth, which contains HMS Victory, Warrior and Mary Rose, and the Royal Naval museum? It would benefit enormously from an influx of schoolchildren. More importantly, schoolchildren would learn a great deal about our history, especially our maritime history, if it were included on the list.
    Mr. Smith: The Mary Rose, with its associated exhibitions, is a designated collection. I am sure that the trustees of the Mary Rose collection are making a good application to the Museums and Galleries Commission for the use of some of the funds for designated museums. I am also sure that the hon. Gentleman will exercise his powers of persuasion over his colleagues about precisely what they should bid for.
    Mr. Richard Spring: In a parliamentary written answer after the comprehensive spending review, the Secretary of State announced free

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    access for children this year, for pensioners next year, and for everyone in 2001. Will he confirm that sufficient sums are available to carry out his pledge?
    Mr. Smith: We have provided sufficient funds for the current year to meet the free access for children pledge, which has now been fulfilled, and sufficient funds for next year to ensure that the pledge on pensioners can be carried out, and we have allocated £30 million in the budget for the third year. As we made clear at the time, it is up to the trustees of each national collection to decide whether they want to take up that offer.

    Tourism (Dorset)
    Mr. Robert Walter: What is his assessment of the working time directive's impact on the tourism industry in Dorset. [83414]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): The Government believe that the working time regulations are business friendly for all parts of the United Kingdom. They strike a balance between the need for effective legislation, providing fair minimum standards for workers, and ensuring that businesses are not subject to unnecessary burdens.
    Mr. Walter: The businesses involved in the tourism industry in my constituency will be disappointed by that reply. In North Dorset, tourism is conducted by small commercial businesses and voluntary organisations, which are having imposed on them more and more regulations—of which the working time directive is but one. Will the Minister tell us in a simple, factual way what is the Government's estimate of the extra cost to those businesses of the working time directive and the other Government regulations that have been introduced in the past two years? She has so far failed to answer that question.
    Janet Anderson: As the hon. Gentleman will know, it is difficult to estimate the typical costs, and many businesses have been completely unaffected; but we are aware of the concern that has been expressed in some quarters about possible burdens placed on employers in the maintaining of records for the purpose of the regulations. The record-keeping requirements were, however, designed to be implemented flexibly, and in many cases, existing records can be used. The Government propose shortly to provide supplementary guidance, which will aim to give businesses practical advice.
    Dr. Brian Iddon: Is my hon. Friend aware that during most of the period when the Conservatives were in control, Britain's share of the world tourism industry fell—from 6.7 per cent. in 1980 to 5 per cent. in 1997—and that they did nothing to combat that?
    Janet Anderson: My hon. Friend is right. That is why we produced our strategy for tourism in February this year.
    I remind my hon. Friend that, for the first time in many years, the Secretary of State announced an increase in funds for the British Tourist Authority of £5 million over the next three years, and an extra £2.8 million for the
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    new English Tourism Council over the next two years. That compares very favourably with cuts imposed by the last Government, who reduced the funding of the English tourist board from £25 million to less than £10 million.

    Arts Funding (Scotland)
    Mr. Tam Dalyell: What progress he has made on preparing a draft concordat with the Scottish Executive on the funding of the arts in Scotland. [83416]
    The Minister for the Arts (Mr. Alan Howarth): My officials have been working closely with officials at the Scottish Office in drafting a concordat covering all my Department's areas of responsibility. Good progress has been made, and a final draft will be published shortly. The funding of the arts in Scotland will, however, be a responsibility of the Scottish Executive, and is not therefore an issue for the concordat, other than for joint and cross-border activities.
    Mr. Dalyell: Do not the director of the National Gallery of Scotland and others expect some charity, given their rather immediate funding problems?
    Mr. Howarth: That must be a matter for my ministerial friends in Scotland; but, as I have said, we will as soon as possible present a draft of the new concordat for consideration by all parties.

    Libraries
    Mr. Roger Casale: How the lifelong learning initiative announced by the new opportunities fund will benefit local libraries. [83418]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): The £200 million new opportunities fund stream for community access to lifelong learning will make a substantial contribution to developing the infrastructure for a public libraries information technology network, linking local libraries to each other and to the national grid for learning by 2002.
    Mr. Casale: Does my right hon. Friend agree that, as well as providing a vital educational resource, local libraries provide local communities with a key civic amenity, and a focus for civic engagement and local civic pride? Will he join me in calling on local authorities across Britain£including my local authority, Merton, which is considering the closure of Wimbledon Park library£to take full account both of the educational resource provided by local libraries and their civic importance when undertaking their local library reviews?
    Mr. Smith: I have made precisely that point to library authorities and library professionals on a number of occasions. I would add that the development of information technology resources in public libraries is a vital way of ensuring that we do not develop an underclass of people who have no access to information technology, and to the wealth of new information and resources of knowledge that it makes available. We are determined to ensure, by means of the money that we are putting in, that that does not happen.

    Sporting Projects (Barnsley)
    Mr. Eric Illsley: What steps he is taking to encourage the greater distribution of national lottery money to sporting projects in Barnsley. [83420]
    The Minister for Sport (Mr. Tony Banks): Following the coalfields lottery conference, we are conducting a special investigation into how extra help can be given to lottery applicants in coalfield and former coalfield areas, including Barnsley. More generally, measures introduced in the National Lottery Act 1998 will ensure that lottery funding is distributed more equitably across the country. Barnsley is one of Sport England's priority areas, and is able to apply for extra funding for sporting projects in the area.
    Mr. Illsley: My hon. Friend will be aware that applications from Barnsley, or from the Barnsley area, have been few and far between. In the case of the Dodworth miners' welfare, following the submission of an application, the sponsors were advised to revise the application and increase the amount claimed from the lottery, only for the application to be rejected. Can my hon. Friend give me some idea of when he hopes to publish the findings of the special investigation?
    Mr. Banks: I understand the point. That is precisely why we are conducting special investigations into areas such as Barnsley. The findings are due to be published very shortly. We are critically aware of the fact that areas such as Barnsley have suffered from the lottery in not having a fair distribution of resources. That is something that we are determined to deal with.

  MILLENNIUM EXPERIENCE
  The Secretary of State was asked—
  MILLENNIUM EXPERIENCE

    Archbishop of Canterbury
    Mr. James Gray: What role the Archbishop of Canterbury will have in the events in the Dome on 31 December. [83437]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): The New Millennium Experience Company is discussing the arrangements for the opening celebrations at the dome with a number of interested parties, including the royal household, the Government and Lambeth palace. The nature and scope of the celebrations will be announced in due course.
    Mr. Gray: Having ducked my question on two previous occasions, will the Secretary of State take this opportunity to inform the House whether he agrees that, whatever else it may be, the millennium is the celebration of the 2,000th anniversary of the birth of Jesus Christ; that, at the very least, the Archbishop should be invited to attend the ceremony and, as we do in the House at the beginning of proceedings, to say a prayer; and that the same duty should be asked of the Moderator of the General Assembly of the Church of Scotland, to be undertaken in Scotland?
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    If the right hon. Gentleman will not acknowledge that fact, will he tell us what his input is in those discussions with Lambeth palace and what the Archbishop has said, so far, about what he would like to do at midnight on 31 December?
    Mr. Smith: As I have said consistently, the millennium is an important Christian anniversary and our celebrations should reflect that fact, but it is also important that those celebrations should be inclusive and accessible to people of all faiths and none. That is the spirit in which we have always approached the matter; the same was true of the previous Government. Clearly, it is important that the spiritual significance of the millennium is reflected in the celebrations both during the first weekend of 2000 and throughout the year.
    Mr. Ben Bradshaw: Is my right hon. Friend aware that a number of Christians, including me, are somewhat puzzled by the apparent attempts of the Archbishop of Canterbury to dictate the conditions of his presence at the millennium party, because we were under the impression that Christmas is the Christian festival and that new year's eve is a secular one?
    Mr. Smith: The Archbishop of Canterbury and the leading figures of other branches of the Christian family are closely involved in discussions about preparations for the millennium celebrations, and that is right. Indeed, on the afternoon of 2 January, the first Sunday of 2000, at our proposal, national church services will be held in each of the home countries.
    Mr. Peter Ainsworth: The Secretary of State has to admit that he has a problem on his hands. Is a minute of Christian contemplation too much to ask? If it is, what steps will be taken to avoid an embarrassing boycott by Church leaders? I presume that Ministers wish to avoid the scenario of reluctant Church leaders being prised from their churches and congregations and shunted along the Jubilee line on new year's eve to a secular knees up.
    Mr. Smith: The hon. Gentleman is premature in jumping to conclusions about what will happen on the night of 31 December/1 January. He should wait until the discussions that are under way in a warm and co-operative spirit between all the Churches, leaders of other faiths, the Government, the royal household and the New Millennium Experience Company have reached some conclusions. Then, perhaps, we can have a sensible discussion.

    Millennium Dome (Medical Facilities)
    Ms Claire Ward: If he will make a statement on the provision of medical facilities at the millennium experience. [83438]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): A fully equipped medical centre will be established at the dome. It will be managed and staffed by the local national health service, and wholly funded by the New Millennium Experience Company. The centre will be operational from October 1999, and staffed both during the celebrations on new year's eve and throughout 2000.

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    Plans for the medical centre were agreed following detailed discussions between NMEC, Bexley and Greenwich health authority, Greenwich Healthcare NHS trust, Queen Mary's Sidcup NHS trust, Lewisham Hospital NHS trust, local general practitioners, the London ambulance service and Greenwich council.
    Ms Ward: I thank my hon. Friend for that reply. What will be the ratio of medical staff to visitors? Does she share my concern that, because of the number of people attending the dome, there may be serious medical problems if many of them require medical assistance? Will she assure the House that she will be keeping the facilities under careful check?
    Janet Anderson: I assure my hon. Friend that we shall, of course, be monitoring the situation. As Jennie Page—the NMEC chief executive—said:
    "With more than 12 million people expected to visit the Dome during 2000 and 5,000 staff, we have sought to establish on-site medical care of the highest possible standard. The health and safety of our visitors—including children and senior citizens—is paramount".

    Marketing
    Kali Mountford: What progress is being made with plans to market the millennium experience across the country. [83439]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): The New Millennium Experience Company's marketing strategy incorporates a number of means of promoting the millennium experience, and its associated national programme, across the United Kingdom and worldwide. Among the initiatives currently being undertaken are the development of the "Our Town" story programme, to enable towns across the length and breadth of the United Kingdom to tell their story in the millennium dome; proposals to ensure that 1 million school children will be able to visit the dome for free; and the negotiation of special packages of travel combined with entry tickets, to ensure that people are able, at the cheapest possible price, to get to the dome and the millennium experience.
    Kali Mountford: I thank my right hon. Friend for his answer, and particularly for its focus on children. I do not know whether he has seen a copy of the Huddersfield Daily Examiner, but I hope that he has, as it states that although children are very enthusiastic about the millennium experience, their parents and grandparents are less so. Will he ensure that the millennium experience marketing strategy will examine the effects of that varying enthusiasm, and perhaps focus more attention on encouraging parents and grandparents to help those enthusiastic youngsters to attend?
    Mr. Smith: It just so happens that I have, indeed, seen the Huddersfield Daily Examiner report to which my hon. Friend refers. I was extremely interested to see that pupils at Spring Grove Junior, Infant and Nursery school, in Springwood,
    "all agreed it would be a wonderful experience."
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    The article also helpfully points out that the £57 pound charge for five people on a family ticket—including at least one adult and four children—is less than the £59 that it costs for four people to go to Alton Towers, in Staffordshire.
    We shall be ensuring that the new millennium experience puts specific emphasis on the marketing strategy to attract families. The millennium experience will be a major opportunity for families to have an enjoyable and challenging day out in 2000.
    Mrs. Virginia Bottomley: Does the right hon. Gentleman agree that it is very important for the Government to show some restraint in marketing the millennium experience, and that, by launching the contents at The Peoples Palace—where the Labour party celebrated its general election victory—they have caused great concern to the many people who believe that the millennium celebration should not be party political and that it certainly should not be regarded as the launch pad for the Labour party's next election campaign?
    Mr. Smith: On our part, there is no intention or wish at all to make the celebration party political—which is precisely why the former Deputy Prime Minister sits on the Millennium Commission and is intimately involved in the development and detailed proposals for the dome itself.

    Children's Promise
    Mr. Gareth R. Thomas: If he will make a statement on progress made on the children's promise initiative as part of the millennium experience's national programme. [83442]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): Children's promise is one of the exciting and innovative projects within the millennium experience's national programme of events and activities, many of which are already under way across the UK. Children's promise is supported by Marks and Spencer and aims to encourage as many people as possible to donate the value of their final hour's earnings of 1999 for the benefit of the children of the next millennium. The money raised will be distributed by seven of the UK's major charities that work with children.
    Mr. Thomas: Does my right hon. Friend agree that children's promise is further proof of how wrong the doom and gloom merchants were when they predicted that the millennium experience would not be enjoyed by everyone around the country, but just by those in London? What action is my right hon. Friend taking to promote that excellent initiative?
    Mr. Smith: I am delighted to say that the take-up of children's promise has already far exceeded expectations. Many companies and individuals have signed up to ensure that we give some of our income from the final hours of 1999 to help children in the next millennium. We are also writing to all Members of Parliament to encourage them to set an example by signing up to the idea. I hope that it will be widely taken up on both sides of the House.

  HOUSE OF COMMONS
  The President of the Council was asked—
  HOUSE OF COMMONS

    Modernisation
    Ms Karen Buck: If she will make a statement on what representations she has received on progress made in modernising the House since May 1997.[83447]
    Ms Hazel Blears: If she will make a statement on the steps taken to modernise the working of the House since May 1997. [83452]
    The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): Setting up the Modernisation Committee was a manifesto commitment from the Government. The Committee has reported nine times. The procedure for the scrutiny of EU legislation has been overhauled, new mechanisms for pre-legislative scrutiny are in operation and certain old-fashioned aspects of conduct in the Chamber have been updated. The House will have an opportunity next week to consider the proposal for an experiment involving sittings in Westminster Hall.
    Ms Buck: I thank my right hon. Friend for that answer. Is she aware that there is some disquiet about the minimal increase in this year's office costs allowance? Does she agree that, given the solid progress that has been made on the modernisation of the House, it is time to extend that agenda to look at issues connected with the sufficiency and appropriateness of the office costs allowance, to ensure that Members of Parliament are able to deliver a comprehensive and modern service to their constituents?
    Mrs. Beckett: I understand the anxiety of my hon. Friend and of all hon. Members to deliver the right service to constituents. However, I am not sure that that is a matter for the Modernisation Committee. The recommendation is made by the Senior Salaries Review Body. The recent uprating is a consequence of the implementation of a resolution of the House, carried some time ago, to uprate the office costs allowance by the all items retail prices index. I suspect that the SSRB is the right avenue for anyone wishing to reopen the issue.
    Ms Blears: I am particularly pleased that our modernisation programme is improving the quality of our legislation, particularly through pre-legislative scrutiny.
    On an entirely different matter, last week I had the pleasure of meeting the victorious Labour Members of the Scottish Parliament. They have some radical ideas about how their Parliament will function, particularly in relation to the sitting hours, which I understand may be from 10 am until 6 pm. That is an excellent way of conducting business. Will my right hon. Friend confirm that we shall learn from the Scottish experience to inform our House and take our modernisation prospects even further?
    Mrs. Beckett: I am grateful for my hon. Friend's welcome for pre-legislative scrutiny. I share her view that it will be to everyone's benefit for us to have sounder legislation that should need less amendment as it goes through this place than has become the custom over the past 10 years.
    I note what my hon. Friend says about the new Scottish Parliament and the Welsh Assembly. I am sure that we shall study the experience of those bodies with great interest and we shall no doubt seek to learn what we can from them. However, I fear that the extent to which that experience translates here may be another matter.
    Dr. Julian Lewis: One of the features of the newly modernised House of Commons is the number of times that the Prime Minister is absent from it. In view of the recent revelation that the Prime Minister has attended just one 30-minute meeting of his own Cabinet in the whole of the past month, why does the Modernisation Committee apparently have no plans to hand that part of the Prime Minister's duties permanently to the Deputy Prime Minister?
    Mrs. Beckett: None of the issues that the hon. Gentleman raises is for the Modernisation Committee. It is a matter of fact that of the past few meetings of the Cabinet, one was postponed because of the recess and another because many Cabinet members were away from London for the local elections. The contention is frequently, and wrongly, put by Opposition Members that, in some way, the Prime Minister is neglectful of his duties. I remind the hon. Gentleman that on one of the occasions to which he referred, the Prime Minister was engaged in negotiations in Ireland—something that most hon. Members would think was quite important. The hon. Gentleman's underlying contention is that the Prime Minister does not attend the House regularly. In fact, one aspect of the Government's modernisation is that this Prime Minister attends Prime Minister's Question Time much more regularly than his predecessors.
    Mr. David Heath: In the Modernisation Committee, will the right hon. Lady look again at the procedure for private Members' Bills? If we are to consider antique areas of procedure, that must be one to look at. Can it be right that a Bill, such as that proposed by the hon. Member for Liverpool, Garston (Maria Eagle) last week, can be frustrated by the actions of two—or, at most, three—hon. Members when the vast majority of Members on both sides of the Chamber wish it to proceed? Should not we properly scrutinise private Members' Bills in the expectation that if they receive the approval of the majority of the House, they will reach the statute book?
    Mrs. Beckett: I understand the anxieties expressed by the hon. Gentleman, and I have sympathy with his remarks about that Bill. However, it has always been difficult for private Members' Bills to reach the statute book if they are in some way contentious across the House, or if they raise issues of difficulty. That has been the case under Governments of all colours, and that is why we have procedures that do not make it easy for private Members' Bills to reach the statute book unless there is general consent. It is open to the Modernisation

    637
    Committee to look at the procedures—as others have done—but that has always been the attitude and expectation with regard to private Members' Bills.
    Normally in the past, whatever the colour of the Government or the Opposition, Members have not objected frivolously to private Members' Bills. One of my anxieties is that if we continue to have objections which appear to be for the sake of objecting, it will call into question the way in which the private Member's Bill system operates, which might be unfortunate.
    Mrs. Gwyneth Dunwoody: Will my right hon. Friend look carefully at the modernisation plans, as it is now clear that the lengthening of the hours on the first three days of the week is not only having an effect upon the efforts of individual Members of Parliament, but—since large numbers of Select Committees are losing their members either to Standing Committees or to other parliamentary business that normally has not been held at the same time—is having a deleterious effect upon the work of the House? Any further attempt to shorten the hours artificially, while extending them in reality, would be counterproductive.
    Mrs. Beckett: I am not aware of any proposal to shorten the hours of the House. There is a proposal to offer extra debating time, with which my hon. Friend may or may not be happy, but that will be a matter for the House as a whole to decide. Since hon. Members on both sides ask continually for more opportunities for scrutiny, they will bear that matter in mind.
    Mrs. Virginia Bottomley: The right hon. Lady has commented on the office costs allowance and the Scottish Parliament. Does she plan to recommend a change to the office costs allowance to recognise not only the smaller constituencies of Scottish Members of Parliament, but the fact that they now have more limited responsibilities than those in England?
    Mrs. Beckett: No. It is patently not the case that Scottish Members have less responsibility; there are no two-tier memberships of the House. I am surprised that the right hon. Lady should suggest that that would be desirable.

    House of Lords Reform
    Kali Mountford: What representations she has received on progress made by the royal commission on reform of the House of Lords. [83448]
    The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): I have had no representations on progress, but I understand that the royal commission has received more than 500 written submissions concerning the long-term reform of the House of Lords, from members of the public, Members of Parliament, peers, academics and a range of organisations.
    Kali Mountford: The second Chamber plays an important role in scrutiny, and I hope that it will continue
    638
    to do so, but not in opposition to this House. I notice that the Conservative party has made a submission containing two contradictory options. Can my right hon. Friend assure us that the royal commission will ensure that narrow party interests are not uppermost in its mind, and that an in-built majority will not be maintained in that Chamber in opposition to this one?
    Mrs. Beckett: I share my hon. Friend's view that this House should be the prime House in the legislature. That is clearly the steer that the royal commission has been given. I am aware that the Conservative party has made two different, and to some extent contradictory, proposals, but that is becoming so much par for the course that I am not entirely surprised by it. I certainly strongly share the view that the matter should not be governed by narrow party interests. That is why the Government have said consistently that we do not believe that any one party should have an in-built majority in the House of Lords. To the best of my recollection, I have yet to hear that view echoed by Conservative Members.
    Mr. Nicholas Soames: In view of the ill-judged and unsatisfactory manner in which the Government are conducting their programme of reform of the upper House, does the President of the Council agree that the work with which the royal commission has been charged is extremely onerous and may well lead to its requiring longer to come to a proper, sensible and detailed conclusion, especially as it has received so many important and weighty submissions? Will she assure me that, if the royal commission requires more time to do its work, that time will be forthcoming?
    Mrs. Beckett: I am sorry to hear that the hon. Gentleman thinks that the proposal for reform of the House of Lords is either ill-judged or unsatisfactory. As there is every chance that it will reach the statute book, it seems to me that it will have appeared satisfactory to most people in the country. I share the view that the royal commission's work is important and, in its way, onerous. Should it come to the view that it needs a little more time than the Government originally allotted, it will no doubt make that known. I gently remind the hon. Gentleman that when the royal commission was set up, Conservative Members were desperately anxious that it should report as speedily as possible, so that the proposals could be considered as soon as possible.

    Summer Recess
    Mr. Mike Gapes: What plans she has to introduce a three-month notice period of the dates of the summer recess. [83449]
    The Parliamentary Secretary, Privy Council Office (Mr. Paddy Tipping): The approximate dates of the summer recess are generally well known and do not vary much over the years. The uncertainties that affect parliamentary business make it very difficult for the precise dates to be announced as early as the end of April.
    Mr. Gapes: Is my hon. Friend aware that, in addition to Members of Parliament, there are thousands of staff

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    here—especially those with young children—who would benefit greatly from being able to plan and book holidays some time in advance, when it is more convenient, and perhaps cheaper? Is he also aware that the families of many Members of Parliament live in other parts of the United Kingdom, where the school holidays vary, and that there is a trend towards four-term school holidays in some parts of the country? Can further consideration please be given to giving at least a reasonable period of notice for those with families, to allow them to book their holidays in the summer recess?
    Mr. Tipping: It is of course important to give reasonable notice of the holiday period, and I am sure that my hon. Friend, who has taken a close interest in the matter, will welcome the extra notice that was given for the Easter and Whitsuntide holidays. I join him in thanking the staff of the House and commending their efforts. It is important to treat them and hon. Members
    640
    properly. We are aware of the issue, but he will be aware that a week is a long time in politics, never mind 12 weeks.
    Mr. John Bercow: Would the Minister confirm that even if three months' notice of the dates of the summer recess were introduced, the Government have no intention whatever of allowing a situation in which the Cabinet decides not to sit during the summer recess? Will he confirm that the Government recognise that Parliament being in recess does not justify the Government abandoning their responsibility to the people who put them there?
    Mr. Tipping: The hon. Gentleman will be aware that this is a modernising and progressive Government who work not only when Parliament is open, but all the year round. People across the country are feeling the benefits of the hard work of the Cabinet.

Points of Order
3.31 pm
Mr. Peter Ainsworth: On a point of order, Madam Speaker. You will have noticed the allegation by Mr. Greg Dyke that the Secretary of State for Culture, Media and Sport, in answering my parliamentary question on 10 May, misled the House about discussions between the two of them on whether Mr. Dyke would apply to become the next Director-General of the BBC. Setting aside the question of whether Mr. Dyke is an appropriate person for that job, which is a matter for the governors, I wonder whether you have received any request from the Department for Culture, Media and Sport for a statement to set the parliamentary record straight and to clarify the confusion that exists about what discussions took place between Ministers and one of the Labour party's biggest donors of recent years about the appointment to that important role.
The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): Further to that point of order, Madam Speaker. There has been no misleading of the House, either intentional or unintentional. The matter is clear: in the course of a lengthy meeting on the subject of the European film industry, I inquired in passing of Mr. Dyke whether the newspaper reports were true that he intended to put his name forward for the director-generalship of the BBC. He said at the time that he was still considering the matter and had not yet made up his mind. That was the content of the conversation, and it was reflected in my parliamentary answer and in Mr. Dyke's letter to The Independent on 13 May. To make the position even clearer to those who do not appear to appreciate clarity, I would add that at no stage has Greg Dyke lobbied me in connection with the director-generalship of the BBC, nor have I sought to persuade him to stand. I have not at any stage discussed any individual candidate or candidates for the post with any of the governors of the BBC, nor will I. It is an appointment for the BBC governors alone to make, and that remains firmly the case.
Mr. Brian H. Donohoe: On a point of order, Madam Speaker. I have written to you in connection with the matter that I am about to raise. It concerns the role of Members of the Scottish Parliament in matters that are reserved in this House. Is it possible
642
for you to have an early meeting with your counterpart in the Scottish Parliament to resolve what will become—if not nipped in the bud—a possible problem?
Madam Speaker: I am grateful to the hon. Gentleman for giving me notice of the point that he has raised and I appreciate his concern. However, I must make it clear to him and to the House that it is not for me to arbitrate on relationships between constituents and those who represent them in whichever legislature they may sit. That is a problem that will have to be resolved outside the House by good sense and mutual respect, not by me as Speaker of this House.
Mr. John Swinney: On a point of order, Madam Speaker. Have you had a request today from the new Secretary of State for Scotland to make a statement to the House on the composition of his new ministerial team? Some of us are bewildered that, at the time of substantial devolution of power to the Scottish Parliament, it is necessary to have four salaried Scottish Office Ministers. It is also not clear whether those four salaried Ministers will continue after 1 July and the assumption of full powers by the Scottish Parliament. A statement could clear up the confusion about whether that is a good deal for Ministers or a raw deal for the public finances.
Madam Speaker: No, I have had no request from a Minister to make a statement on that issue. Of course, it is always open to the hon. Gentleman to put questions on the Order Paper in due course and get an answer to his questions.
Mr. Tam Dalyell: On a point of order, Madam Speaker. In view of information that I have submitted to you—and the press reports on the front pages of newspapers that have been submitted to you—on the apparent situation of authority having been given to alert a number of reservists for possible service in the armed forces—not necessarily in Kosovo, but possibly taking the place of people who might be called to go to Kosovo—has there been any request from the Secretary of State for Defence to make a statement on exactly what authority has been given, and to whom?
Madam Speaker: The Secretary of State for Defence has not informed me that he is seeking to make a statement on that issue. In my judgment, it may well be an issue which will come before the House tomorrow, at the appropriate time.

Orders of the Day

  Welfare Reform and Pensions Bill
  As amended in the Standing Committee, considered.
  Ordered,
  That the Welfare Reform and Pensions Bill, as amended, be considered in the following order, namely: New Clauses; amendments relating to Clauses 1 to 6, Schedule 1, Clauses 7 to 16, Schedule 2, Clause 17, Schedule 3, Clauses 18 and 19, Schedule 4, Clauses 20 to 29, Schedule 5, Clauses 30 to 44, Schedule 6, Clauses 45 to 50, Schedule 7, Clauses 51 to 61, Schedule 8, Clauses 62 to 64, Schedule 9, Clause 65, Schedule 10, Clauses 66 to 70, Schedule 11 and Clause 71; New Schedules; amendments relating to Clauses 72 and 73, Schedule 12, Clauses 74 to 76, Schedule 13 and Clauses 77 to 79.
  3.36 pm
  Mr. Iain Duncan Smith: On a point of order, Madam Speaker. It is relevant to the Bill and to the way in which the Government treat the House. Late on Thursday, at the last moment, the Government tabled new clauses and amendments that will add three new subject areas to what is already a very big and complex Bill. You will be aware that on Second Reading and throughout the Bill's consideration in Committee, we complained that the Bill already resembled three to four Bills compressed into one, which has meant that proper scrutiny has always been difficult, and that proper voting intentions could not be properly declared.
  The Government have now compounded that. On Thursday evening, essentially two working days ahead of Report, with little or no notification, they tabled new clauses and amendments on three areas: state maternity allowances, the effect of insolvency on pension rights, and earnings of workers supplied by service companies. At least two of those matters were mentioned in the Budget and are currently out for consultation—but this is way ahead of any return on that consultation—and they refer directly to the Finance Bill.
  Some six Government new clauses and 12 Government amendments were tabled on Thursday night, with no warning, lengthening the Bill. That is an abuse, and it makes it very difficult indeed to deal with the Bill in a decent time.
  Madam Speaker: I am sympathetic to the burdens that are placed on hon. Members in such a situation, but I assure the hon. Gentleman that the usual procedures were carried out. I remind the House that Friday is a proper working day for the House—for some of us, at least. Amendments may be tabled from 9.30 am until 3 o'clock, so there was an opportunity to do so at that juncture.

  Welfare Reform and Pensions Bill
    New Clause 5

      EXTENSION OF ENTITLEMENT TO STATE MATERNITY ALLOWANCE
      `.—(1) In section 35 of the Contributions and Benefits Act (state maternity allowance), for subsections (1) and (1A) there shall be substituted—
      "(1) A woman shall be entitled to a maternity allowance, at the appropriate weekly rate determined under section 35A below, if—

      (a) she has become pregnant and has reached, or been confined before reaching, the commencement of the 11th week before the expected week of confinement; and

      (b) she has been engaged in employment as an employed or selfemployed earner for any part of the week in the case of at least 26 of the 66 weeks immediately preceding the expected week of confinement; and

      (c) (within the meaning of section 35A) her average weekly earnings are not less than the maternity allowance threshold; and

      (d) she is not entitled to statutory maternity pay for the same week in respect of the same pregnancy."

      (2) In subsection (3) of that section—

      (a) for "Schedule 3, Part I, paragraph 3" there shall be substituted "section 35A below"; and

      (b) for "and (c) above" there shall be substituted "above or in section 35A(2) or (3) below".

      (3) After that section there shall be inserted—
      "Appropriate weekly rate of maternity allowance
      35A.—(1) For the purposes of section 35(1) above the appropriate weekly rate is that specified in whichever of subsection (2) or (3) below applies.
      (2) Where the woman's average weekly earnings are not less than the lower earnings limit for the relevant tax year, the appropriate weekly rate is a weekly rate equal to the lower rate of statutory maternity pay for the time being prescribed under section 166(3) below.
      (3) Where the woman's average weekly earnings—

      (a) are less than the lower earnings limit for the relevant tax year, but

      (b) are not less than the maternity allowance threshold for that tax year,

      the appropriate weekly rate is a weekly rate equivalent to 90 per cent. of her average weekly earnings or (if lower) the rate specified in subsection (2) above.
      (4) For the purposes of this section a woman's "average weekly earnings" shall be taken to be the average weekly amount (as determined in accordance with regulations) of specified payments which—

      (a) were made to her or for her benefit as an employed earner, or

      (b) are (in accordance with regulations) to be treated as made to her or for her benefit as a self-employed earner, during the specified period.

      (5) Regulations may, for the purposes of subsection (4) above, provide—

      (a) for the amount of any payments falling within paragraph (a) or (b) of that subsection to be calculated or estimated in such manner and on such basis as may be prescribed;

      (b) for a payment made outside the specified period to be treated as made during that period where it was referable to that period or any part of it;

      (c) for a woman engaged in employment as a self-employed earner to be treated as having received a payment in respect of a week—

      (i) equal to the lower earnings limit in force on the last day of the week, if she paid a Class 2 contribution in respect of the week, or

      (ii) equal to the maternity allowance threshold in force on that day, if she was excepted (under section 11(4) above) from liability for such a contribution in respect of the week;

      645

      (d) for aggregating payments made or treated as made to or for the benefit of a woman where, either in the same week or in different weeks, she was engaged in two or more employments (whether, in each case, as an employed earner or a self-employed earner).

      ol>
      (6) In this section—

      (a) "the maternity allowance threshold", in relation to a tax year, means (subject to subsection (7) below) £30;

      (b) "the relevant tax year" means the tax year in which the beginning of the period of 66 weeks mentioned in section 35(1)(b) above falls; and

      (c) "specified" (except in subsections (7) and (8) below) means prescribed by or determined in accordance with regulations.

      (7) The Secretary of State may, in relation to any tax year after 1999–2000, by order increase the amount for the time being specified in subsection (6)(a) above to such amount as is specified in the order.
      (8) When deciding whether, and (if so) by how much, to increase the amount so specified the Secretary of State shall have regard to the movement, over such period as he thinks fit, in the general level of prices obtaining in Great Britain (estimated in such manner as he thinks fit); and Secretary of State shall in each tax year carry out such a review of the amount so specified as he thinks fit."
      (4) This section applies in relation to the payment of maternity allowance in cases where a woman's expected week of confinement (within the meaning of section 35 of the Contributions and Benefits Act) begins on or after 20th August 2000.'.—[Mr. Bayley.]
      Brought up, and read the First time.
      The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): I beg to move, That the clause be read a Second time.
      Madam Speaker: With this, it will be convenient to discuss Government amendments Nos. 9 to 11.
      Mr. Bayley: When we debated the Bill on Second Reading, my right hon. Friend the Secretary of State for Social Security explained that it is an essential step in our modernisation of the welfare state, and that it takes forward our reforms in four key areas.
      First, the Bill contains a package of measures to keep people in touch with the labour market, including new employment zones and the single gateway. Secondly, it brings disability benefits up to date, to give new opportunities to disabled people who want to work and to provide extra help for those in greatest need. Thirdly, it modernises the system of bereavement benefits to bring fairness and equality to the system. Finally, the Bill is a starting point for our pension reform. It introduces pension sharing on divorce and paves the way for future pensioners to have a more secure retirement.
      Since Second Reading, the Bill has been thoroughly discussed in Committee. In fact, I believe that it has been scrutinised at greater length than any social security Bill in recent history. I pay tribute to my hon. Friends who served on the Committee—indeed, to all hon. Members who were involved with the Committee—for their hard work. Thanks to that, I am confident that the Bill that I am presenting to the House today is an even better piece of legislation.
      In particular, we have improved the Bill by including new reforms to the structure of national insurance, to ensure that work pays and that people keep more of what
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      they earn. We have made a new provision to prevent disabled people from being treated unfairly by the way in which overpaid benefits are recovered.
      We are not stopping there, as we are proposing more improvements today. The first is a reform of maternity benefits that further develops our principle of work for those who can and security for those who cannot. New clause 5 will extend entitlement to maternity allowance to pregnant women on low earnings and increase the basic rate of maternity allowance for self-employed women.
      That is not an isolated reform. We made a manifesto commitment to help families balance work and family life. Since coming to power, we have put in place a range of policies across Government to support families and children. We are providing better financial support for families, including the biggest ever increase in child benefits, a working families tax credit that will guarantee a minimum income for working families earning the national minimum wage of £200 a week and a child care tax credit to help make child care more affordable. From 2001, children's tax credit will be worth £416 a year.
      Today, my hon. Friend the Paymaster General has further improved the working families tax credit and our disabled person's tax credit proposals. She has offered new help to enable disabled people, whose health is deteriorating while they remain at work, to retain their jobs and the provision of increased support for parents of disabled children who seek to work and to benefit from the working families tax credit. Our new Employment Relations Bill sets out a basic framework of family friendly employee rights. We are investing £450 million in our sure start project in England over the next three years to improve the life chances of children in disadvantaged areas. We are delivering our commitment to a national child care strategy that provides families with genuine choices so that they can balance the combination of paid work, education or training and parenting. All that is in stark contrast to the policies of the Conservative Government before the 1997 general election.
      Our reforms to maternity allowance are yet another step forward. At the moment, maternity benefits are focused on pregnant working women who pay national insurance contributions or who earn enough to do so. Statutory maternity pay is paid by employers for up to 18 weeks to women who have worked for them for six months or more, and who earn at least £66 a week—the lower limit for paying national insurance contributions. Maternity allowance is paid by the Benefits Agency for up to 18 weeks to women who cannot get statutory maternity pay. It also supports self-employed women who have worked and paid contributions.
      All working pregnant women are entitled to 14 weeks maternity leave. My right hon. Friend the Secretary of State for Trade and Industry is taking forward measures in his Employment Relations Bill to increase this period to 18 weeks to bring it in line with maternity benefits. That has been widely welcomed, both by employers and other interest groups. However, we believe that the current maternity leave and pay arrangements have a number of serious flaws. To start with, low-paid pregnant working women—those who earn less than £66 a week—have the right to take time off work to have their baby, but receive no financial help to do so. Secondly, around 20 per cent. of working women are potentially excluded from maternity benefits because they do not earn enough to qualify. Thirdly, women whose earnings are more than

      647
      £66 a week but who do not pay national insurance contributions because they earn small amounts from more than one employer are also excluded. Finally, self-employed women currently receive less maternity allowance than employed women—£51.70 instead of £59.55. That is also unfair.
      The reforms in new clause 5 address all those issues. Under the revised arrangements, women will still need to satisfy an employment test and an earnings test to qualify for maternity allowance.
      We are not changing the employment test, but the earnings test for employed earners will now be based on actual earnings rather than payment of national insurance contributions. In future, all mothers-to-be who earn at least £30 a week on average will be entitled to help from maternity allowance. Earnings from all sources, including self-employment, will count towards average weekly earnings.
      Fourteen thousand low-paid women will gain from that improvement. Women whose average weekly earnings are at least equal to the lower earnings limit will receive the standard weekly flat rate of maternity allowance—£59.55 a week. Women who earn between £30 and the lower earnings limit will receive a weekly maternity allowance of 90 per cent. of those earnings.
      3.45 pm
      Mrs. Angela Browning: Before the Minister continues, will he clarify what will be the basis of the calculation of earnings for self-employed women in the year that they claim the benefit? I ask that question because when self-employed people file their accounts with the Inland Revenue, the last set of accounts may be for the previous financial year. Will the accounts for the previous financial year be taken to establish earnings, or will, for example, the previous three years be averaged out, which is not unprecedented for self-employed people in our tax system? What about the woman who becomes pregnant in her first year of self-employment? On what basis will her earnings be calculated?
      Mr. Bayley: The hon. Lady raises an important point. I regret to say that I cannot respond immediately, but I will do so before the debate concludes as it is important for the House to be absolutely clear about how the earnings are to be calculated. Of course, we will retain the existing rules for calculating the earnings of self-employed people. The change is that in the past the self-employed have been unfairly treated because they have received a lower rate of maternity allowance. As a result of our change, self-employed women will now receive the full rate of benefit—£59.55 instead of £51.70, which is an increase of £7.85 a week.
      Also, we are helping self-employed women with low earnings. If they hold a certificate to exempt them from national insurance contributions, they will be treated as having notional earnings of £30 a week and will receive maternity allowance of £27 a week—90 per cent. of £30.
      To summarise, as a result of the changes, low-paid women who earn below the lower earnings limit for national insurance contributions and at least £30 a week will receive maternity allowance of 90 per cent. of their
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      average earnings. Women with more than one low-paying job will be able to add together their earnings to reach the level needed to qualify for maternity allowance.
      Mr. Steve Webb: The Minister mentioned the category of women whose wages are between £30 and the lower earnings limit and we support the extension of the allowance to them. Clearly, that group do not pay income tax or national insurance and, therefore, are largely unknown to the authorities. What will be the Government's take-up strategy to ensure that people claim that new entitlement?
      Mr. Bayley: We will be using similar means to those that we use to ensure take-up at the moment to inform the self-employed of their rights.
      Mr. Webb: What about employers?
      Mr. Bayley: I thought that the hon. Gentleman was talking about the self-employed. Clearly, employers will have a responsibility to pass on information to employees, as they do with existing employees.
      Mr. Duncan Smith: I was intrigued by the Minister's answer. He seemed rather hesitant. Is there some mechanism whereby employers will know clearly that they will have to pass on that information and has he costed the changes that that would entail?
      Mr. Bayley: The basic mechanism for establishing entitlement to maternity allowance is to show a wage slip. Every employer, however large or small, has a legal obligation to provide a wage slip for employees. It will be the passport to maternity allowance for those on low wages, as it has been for those on higher wages.
      To summarise, low-paid women who earn below the lower earnings limit, provided that they earn at least £30 a week, will receive maternity allowance worth 90 per cent. of their average earnings. Women with more than one low-paid job will be able to add together their earnings to reach the level necessary to qualify for maternity allowance. Self-employed women will receive the same basic rate of maternity allowance as employees. Low-earning, self-employed women who are exempted from paying national insurance contributions will qualify for maternity allowance of £27 a week.
      The Labour party has long campaigned for these reforms. Now that we are putting them into practice, they have been warmly welcomed by many voluntary bodies including the Maternity Alliance and the Low Pay Unit. These important changes will enable more women to strike a balance between paid work and parenting. They are fully in line with our strategy on family friendly employment. They will give low-paid mothers-to-be the financial help that they need to take their full entitlement of maternity leave. They will be good for the health and welfare of low-paid mothers and their children. I commend them to the House.
      Mrs. Jacqui Lait: It is a pleasure to join the debate, but I am sorry to have to speak to new clause 5 because, as my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) said, it adds to an already extensive Bill. The Minister listed the

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      Bill's contents, which were sufficient to keep the Standing Committee going for 25 sittings. This is only the first of at least three more significant additions.
      New clause 5 is an unnecessarily hurried addition to our debate. We have complained that the Bill is already far too long but, now, new clause 5 has been tabled at the last moment. My hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) pointed out the difficulties that self-employed women will have. The hon. Member for Carshalton and Surbiton—
      Mr. Webb: Northavon.
      Mrs. Lait: My apologies; there are so many experts on the subject in the Liberal party. The hon. Member for Northavon (Mr. Webb) made a point to which answer came there none. We all know that the consultation has not finished, so why the rush to discuss new clause 5? We are happy to debate it, but cannot help wondering why we must do it today. We had no hint of it in Committee and, my goodness, it was a long Committee. We even sat on Budget day without any such hint. The Chancellor mentioned the proposal, en passant, in the Budget debate, as did the Secretary of State for Social Security, who also mentioned this Bill in that debate, but without putting the two together. No connection between them was made.
      I am not naturally of a conspiratorial turn of mind. I prefer the more random view of life, but I wonder why new clause 5 has suddenly emerged. It is 15 months before its provisions come into effect.
      Mr. Duncan Smith: It is a sop.
      Mrs. Lait: Looking around the Government Benches, I can only agree, that it may be a sop. One or two may just fall for it. I am more inclined to believe that, while it has something to do with the later amendments, it is more likely that the Government desperately hope that any vote on the later amendments takes place at the dead of night.
      The new clause was tabled last thing on Thursday because the Government took one look at the list of amendments that had already been tabled, noticed that the Opposition had not tabled their amendments and panicked. The Secretary of State sent out his messengers like Lars Porsena of Clusium. They went out north and south, east and west. The Chancellor of the Exchequer obliged and decided to let the Secretary of State for Social Services have the honour of proposing the amendment set out in the Budget. The Government are trying desperately to hold off a debate and vote on benefit cuts. However, the debate is taking place before any consultation has finished. I am surprised that the Government should do such a thing. There is much in the Bill to discuss, and we shall make sure that it is discussed.
      Last week, we had a debate, introduced by the Liberal Democrats, on the abuse of Parliament. Those who were present will remember that they were not even effective enough to be able to vote on the motion. However, during the debate, my right hon. Friend the Member for South-West Surrey (Mrs. Bottomley) made an excellent point about the abuses that the House is facing.
      Mr. Dale Campbell-Savours: On a point of order, Madam Speaker.
      Madam Speaker: Does the point of order concern relevance?
      Mr. Campbell-Savours: It does.
      Madam Speaker: I think that the hon. Member for Beckenham (Mrs. Lait) is coming to her point.
      Mrs. Lait: I am indeed, Madam Speaker. However, one of the factors in this debate is the speed with which the new clause was tabled and the lack of consultation.
      We have before us another example of the abuse that the House is suffering. We could easily have discussed the new clause in Committee. It could easily have been laid before the Committee. Once the split among those on the Government Benches became clear, we had to discuss the new clause.
      Part of the abuse of the House is the volume of legislation that is being brought forward by regulation, and the new clause introduces further regulations on maternity allowance. The Minister has denied that the clause would have much impact on business, notwithstanding the fact that all the women involved will need their wage slips. My hon. Friend the Member for Tiverton and Honiton has already pointed out how difficult it will be for self-employed women to produce the information that the Benefits Agency will need to enable it to pay the maternity allowance.
      No Opposition Member suggests that employers should not produce wage slips, but we are wary of the Government's tendency to introduce creeping regulations. It is easy to say that the Benefits Agency will pay out on the basis of wage slips only. However, when there is the slightest opportunity for anybody to query a wage slip, there will be a call to the employer. Suddenly, a case will be built up for the employer to justify. He will be called upon to fill in forms, to verify and to check. There has not been any reaction from employers so far because of the speed with which the new clause was tabled.
      Mr. John Bercow: I am grateful to my hon. Friend because she highlights an important consideration, which is the exponential rise in regulation that this country has had to contend with since 1 May 1997. Has she made any assessment of the likely increase in the net number of regulations that we face as a result of the new clause? Does she think that that is important, given that the Secretary of State for Trade and Industry has already said that the Government have not got it right on regulations?
      4 pm
      Mrs. Lait: I assure my hon. Friend that we would be happy to work that out, but, because of the speed with which the new clause was tabled, it has been impossible to do so yet.
      I am sure that employers' organisations will rapidly make their views clear. No regulatory impact assessment has yet been produced. I hope that the Government will give us an assurance that they intend to produce one, because otherwise we shall oppose the Bill on the basis of the costs to business.

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      Many hon. Members have been lobbied by the Pre-School Learning Alliance, which held a reception in our Dining Room last week. I have visited many playgroups in my constituency. Every single one of them has pointed out to me the difficulties that it is experiencing with Government regulations. Playgroups are paying the minimum wage, but their objection is that the people who run them are turning from good-hearted volunteers who want to help children into unpaid form-filling slaves. They must deal with the working time directive, they will potentially have to deal with the stakeholder pension, as laid out in the Bill, and now they are likely to have to deal with the maternity allowance forms.
      The maternity allowance will affect primarily women who have been out of work, who are desperate to get back into work and who can work only part-time, either because they are not qualified or because they have children. Those are the very women who are likely to find employers less willing to employ them. As the Minister said, about 14,000 women are excluded—14,000 women who could potentially get further jobs, but whom employers are likely to find it difficult to employ. We are speaking of a relatively small sum in the overall total of social security spending.
      Kali Mountford: I am trying desperately to follow the argument, now that we have finally got on to the clause. Is the hon. Lady telling the House that the Conservative party is opposed to extending maternity allowance on the basis of filling in forms?
      Mrs. Lait: If the hon. Lady listened to my earlier points, she would realise that the crucial point is that there is no time for us to consider the proposal, and there has been no consultation. Our concern is that, with the best will in the world, employers will be unable to employ precisely the sort of women whom the hon. Lady is trying to help. The inability to balance the two interests is the focus of our discussion and, probably, our opposition.
      Some 14,000 women are excluded because they have been earning too little. The sum involved is relatively small compared to the overall total of social security spending, but weekend figures from the Library show that the Government's social security control total is spinning out of control. They promised to reduce social security spending, but it is increasing at a rate of 3.2 per cent. a year, which is more than inflation. Hence, the relatively small sum will add to social security control problems.
      I asked the Library to find out why it would take 16 months to introduce the changes. The answer was illuminating. Let us count back from 20 August 2000. Women are eligible for the allowance from the 11th week before the baby is due. It is also payable if the baby is born prematurely. That can be as early as 19 weeks before the expected week of birth. That takes the date back to April 2000. However, if the rules were to come into force in April 2000 to cover women who give birth to premature babies, women could claim from November this year.
      The interesting comment was that November this year is too early for the necessary legislative and administrative arrangements to be put in place. It cannot be too difficult or time consuming for the Benefits
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      Agency to extend a known benefit. Do I detect a concern that the Bill will be delayed either here or in the other place? With the Government's majority, I can hardly believe that, but perhaps that it what they fear.
      As the Minister said, changes to maternity leave are going through the House, so it is not clear what the final pattern will be, but we must look at the interaction of this extended benefit with maternity leave. I should like the vulnerable women who would need to get back into the workplace to be encouraged to do so. We need to ensure that low-paid, self-employed women have the opportunity to have children, if that is what they want.
      The effect of the national minimum wage is that women who work for between eight and three-quarter and 18 and a third hours a week will receive this allowance, which is the point of the figure of £30 to £66 a week.
      Mr. Campbell-Savours: Can the hon. Lady make the position absolutely clear? Is she for or against the extension of the maternity allowance?
      Mrs. Lait: As I have said time and again, the Bill is the wrong place in which to put that allowance without full consultation.
      We want the single mums who need to get back into the workplace, or those who have few qualifications, to be working, and they are the ones who will be working part-time. Even if, as the Government have said, the initial regulation is minimal—because the Benefits Agency carries out the work on the basis of wage slips—and if maternity leave is extended, it will, over time and taking those two together, be much less attractive for employers and charities to employ women who could bear children. [Interruption.]
      The Minister may disagree—he looks at though he does—but small employers have to ask themselves whether they need this hassle. There will be no clear decision, but it will gently emerge that employers will choose to employ mature women or young men, who also need jobs. That could be damaging to the sort of women who everyone in the House would like to get back into the workplace.
      The Government say that they want a flexible, modern work force. The measure will make it much harder for women to get back into that flexible, modern work force. We cannot see the need for the new clause to be rushed through the House. There has not been proper time to consider it and to get the views of interested bodies. Tabling it at the very last moment was not the best way to help women; it is a shoddy attempt to cover up the splits between Labour Members, which shows their contempt for the House. We will oppose the new clause.
      Mrs. Browning: The Minister was kind enough to take an intervention from me specifically on the tax position and the claims of self-employed women. I should like to expand a little on my intervention.
      The Minister will be aware of the position under self-assessment for self-employed people—men and women. For example, a self-employed woman who needed to make a claim for the new benefit during this year would have to rely on her income from her filed accounts for the 1997-98 tax year. People will be looking to file their returns for the present tax year with the Inland Revenue at the end of September, if they want it to

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      calculate the tax liability, or by 31 January next year, if they are doing that themselves. There will also be a period in which the Inland Revenue will examine and agree those returns.
      For self-employed women, we are therefore looking at a time scale in which income would not be immediately available, even to themselves, because it would have to be confirmed by the Inland Revenue. One factor differentiates self-employed women from self-employed men when they first set up a business: the income from the new business is often the second income in the household. Thus, many women start up a business in a modest way, perhaps working from home, so the income that they draw from the business in the first year or two is minimal because they want the business to grow before deriving a bigger income from it. The Minister's colleagues in the Department of Trade and Industry will confirm that pattern.
      Earlier, I asked the Minister about how such women would make a claim under this new provision. I am also concerned that, in the first or second year of a new business, it might be extremely difficult for some women to qualify for the benefit because of the way in which self-employed accounts are prepared. I do not imply that there is any irregularity in their preparation, but the owner of the business will have forgone earnings. To compare the earnings of such a person with those of someone under the PAYE system would be complex.
      When the Minister replies, as he promised that he would, to my specific questions about the tax point and the data that would be taken into account in determining those women's earnings, I hope that he will look carefully at the new way in which tax, particularly under self-assessment, is worked out for new businesses and people setting up as self-employed. He will be aware, that under his party's new deal, many people are being encouraged to become self-employed, and they will be particularly vulnerable to how their first and second-year accounts are treated in terms of their qualifying for the benefit.
      It is a matter of great disappointment that the Government have brought this proposal to the Floor of the House without even thinking through how it will be put into practice for self-employed women. The Labour party is good at launching new measures, but not very good at thinking them through.
      Mr. David Rendel: May I make just a few points on behalf of the Liberal Democrats? We accept the Conservatives' point that the proposal is being rushed through with minimum consultation. As my hon. Friend the Member for Northavon (Mr. Webb) succeeded in pointing out in an intervention, little thought seems to have been given to how the measure will be put into practice. The Minister might do well to think again about his response to my hon. Friend and come up with some clearer plans on how he will ensure that those concerned realise that they may be eligible for new benefits. Simply telling them to look at their pay slips—if they have a pay slip at all—is not good enough.
      None the less, we welcome the new clause. We have been pressing for some time for better and wider maternity benefits, and this is an attempt to provide them. The Government continually tell us that the Bill's aim is to provide more benefits to those who need them most,
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      and we seem to be proceeding a little way down that path. However, as is so often the case with this Bill, it is not the very poorest who will be helped because they earn below the limits covered by the new clause—or perhaps earn nothing at all. A number of mothers will therefore not be affected by the provision, which will give a little more to those who are not quite the very poorest, but who are poorer than those who have been receiving the benefit until now. That is at least a step in the right direction.
      One of the most important things that any child can have is a good start in life, and we can help babies in that respect by reducing the stress on their mothers. Reducing financial stress, both before and immediately after birth, must therefore be of benefit not just to mother, baby and the bonding process, but to the whole of society. The Liberal Democrats welcome the new clause in so far as the Government are at least making a move towards providing those advantages by the extension of this benefit.
      4.15 pm
      Mr. Bayley: I shall begin by responding to the hon. Member for Tiverton and Honiton (Mrs. Browning). I welcomed her intervention because she made an important point. Having listened to her speech, I am now clear that she misunderstands the basis on which maternity allowance is currently paid to self-employed people. The benefit is based not on income, but on national insurance contributions. The national insurance contribution records will permit or deny access to maternity allowance.
      The contributory conditions for self-employed women are unchanged by the new clause. A woman will have had to have paid 26 contributions in the 66 weeks leading up to the birth. What is new is that maternity allowance at the reduced rate will now, for the first time, be available to self-employed women on low earnings who have small earnings exemptions from national insurance contributions for at least 26 weeks before the birth, so they will not have to file accounts to prove earnings. The hon. Member for Tiverton and Honiton is suffering from a misapprehension.
      Mrs. Browning: I am familiar with the contributions aspect, but my understanding is that there will in addition be an earnings threshold at which the benefit would apply. If there is to be an earnings threshold, there will clearly have to be some proof of earnings.
      Mr. Bayley: Hitherto, a self-employed woman has been able to obtain the maternity allowance on the basis of having paid 26 national insurance contributions in the 66 weeks before the birth. Some self-employed women, such as those who are setting up a business for the first time—precisely the women to whom the hon. Lady referred—will not have paid national insurance contributions because their earnings from their business will be too low to require them to pay contributions. If they have applied and qualified for the small earnings exemption for at least 26 weeks in the period leading up to the birth, they will qualify for the £27 rate of maternity allowance that we propose, which is 90 per cent. of the £30 bottom earnings limit that we are introducing for employed people.
      Mrs. Browning: In addition to their national insurance contributions exemption, a mechanism will have to be

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      agreed in advance to establish the exact tax point in the earnings of those women at which the threshold will make them eligible. As I said, often their drawings from their business accounts may be minimal in order to enable their business to grow, and the accounts may show that they plough more back into the business. Will that be taken into account?
      Mr. Bayley: The hon. Lady has raised an important point, but she is making the matter more complicated that it needs to be. We do not need new regulations. People who run their own businesses do not need to submit accounts to qualify for maternity allowance. It will depend on their national insurance record. If people apply for the small earnings exemption from national insurance contributions for 26 weeks before the birth, that would passport them on to a maternity allowance. We do not need a new test of earnings: women who have established their entitlement through the existing national insurance system will now, for the first time, receive maternity allowance.
      The hon. Member for Newbury (Mr. Rendel) asked how we will get the word out. Self-employed people, particularly those who have started up businesses through the new deal, will get support from their mentor. Under the new deal, someone setting up a new business gets a mentor for two years. If the new entrepreneur is a woman who becomes pregnant during those two years, it will be the responsibility of the mentor to explain her rights.
      As for other women who are employed, at present a woman who is earning £66 a week knows how to claim. Now a woman earning £65 a week, who has hitherto been unable to claim, will submit her claim in exactly the same way. The only difference is that now, when women earning £65, £45 or £30 a week claim maternity allowance, they will be told that they qualify rather than that they do not, and will receive benefit.
      Let me tell the hon. Member for Beckenham (Mrs. Lait) that if the Conservatives oppose the new clause, they will perpetuate a two-tier system—indeed, two-tier systems. They will be saying that it is right for the law to provide maternity allowance for women on higher incomes, but wrong for it to provide the allowance for those on lower incomes. That is an absurd attitude. Moreover, the hon. Lady will be saying that it is right for a woman who is employed to receive maternity allowance at a rate of nearly £60 a week, but that those who are self-employed should be paid a lower rate.
      We are correcting those two wrongs. We are enabling all women earning £30 a week or more to receive maternity allowance, which must be a good thing. It is extraordinary that the hon. Lady should suggest that members of her party will vote against the new clause.
      The question that the hon. Lady must answer is the question that some of my hon. Friends posed to her during her speech: is her party in favour of extending maternity allowance to low-paid women or not? Low-paid women already have a right to maternity leave, but those who are so low paid that they are below the lower earnings limit do not receive maternity allowance, and therefore cannot afford to take the leave. Women on higher incomes receive maternity leave, and the allowance enabling them to afford to take it. That is good for their health and the health of the child; but women below the lower earnings limit are denied the same opportunity.
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      If Conservative Members shoot through the Lobby to vote against the new clause, they will be condemning women on lower earnings to a denial of their right to maternity allowance. I should find it extraordinary were that to happen.
      The hon. Lady complained that the Government had tabled the new clause only on Thursday of last week. I can only assume that she has been asleep, not just over the weekend but since 6 May, when the new clause was actually tabled. Moreover, although 11 days' notice may not have been enough for her, the issue was flagged up for her two months ago in the Chancellor's Budget speech. The proposal has not been sprung on the House without warning or prior consideration. In the case of every Bill, new measures are presented as the Bill proceeds; and that is exactly what is happening now.
      The new provision will not impose a burden on business. Under existing provisions, the Benefits Agency checks a percentage of claims with employers to confirm employment, and to confirm that the appropriate national insurance contributions have been paid. We believe that the new scheme will reduce the need for the agency to check claims, because wage slips will constitute an additional verification of employment. The extra burdens on business will therefore be negligible.
      Mr. Bercow: The Minister said, to a fanfare of trumpets, that the new clause would not be burdensome on business. Does he seek to distinguish it from, for example, another measure to which he referred in his opening remarks£the working families tax credit, whose implementation has already been denounced by employers' representatives as distinctly burdensome?
      Mr. Bayley: The hon. Gentleman should listen to what I am saying. Under the new clause, there is no requirement for businesses to file additional returns or answer additional questions. In fact, we believe that the use of wage slips as passports to maternity allowance will somewhat reduce the need for the Benefits Agency to carry out checks. The hon. Gentleman's fears are therefore groundless.
      The argument of the hon. Member for Beckenham that the new provision might deter employers from employing women of child-bearing age is a crassly stupid point. It is a point that her party made when the Equal Pay Act 1970 was introduced—that equal pay should not be introduced for women because employers would not employ women if it were. We know what has happened since the Act has come in. Even though pay may not quite have equalised, the relative earnings of women have increased dramatically, and the number of women in the labour market has continued to grow. The hon. Lady's fear is absolutely groundless.
      The hon. Member for Beckenham said that the provision would affect just 14,000 people. She may have misunderstood something that I said earlier. There are 14,000 employed women on wages that have hitherto been judged to be too low to qualify for maternity allowance. In future, they will qualify; they will get the allowance. That is at the core of what the new clause is about. In addition, however, there are the 13,000 self-employed people who either have never qualified because their earnings were too low, or who have qualified for some allowance; in future, they will qualify

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      to a greater extent because of our decision to pay the self-employed woman who has a baby the same rate of maternity allowance as the employed woman.
      The hon. Member for Beckenham complains on two fronts. She complains that we will not put the measure into effect until 2000 and that we are dragging our feet, yet at the same time, she says that we are abusing our role by introducing the measure so quickly. She cannot have it both ways.
      The Conservative party does not have long to make up its mind. It will have to decide one way or the other how to vote on the measure. It has to decide whether women on low earnings should get the same right to paid time off when they have a baby as women who are on higher earnings. If it believes that they should, it will vote with the Government. If it believes that one should discriminate against women on low pay and against the self-employed, it will vote against. That is the simple question that it has to consider. I hope that it will support the Government's proposal.
      Mr. Duncan Smith: I will not detain the House long because the Government have already done that. I want to make just a few points to the Minister about some of his assertions and allegations.
      Two or three interesting things arise from the debate. First, the Government have presented the proposal not at the start of proceedings on the Bill, but on Report, which means that there is no possibility of understanding from business, or from anyone else who is involved in the matter, what the balance of cost is.
      The Government have produced no cost assessment. We are meant to take the Minister's word for it. It is yet again a great Government trick. It may work with their Back Benchers, who seem to take their word for everything, but the fact is that we cannot possibly accept their word when they say, "Don't worry. We know that the measure will cost no money."
      The question was raised by my hon. Friend the Member for Beckenham (Mrs. Lait), who said that we do not know what effect the measure will have on people employing the very women whom the measure is aimed at, given that the Government have produced no assessment of the extra cost or burden that may come through on the back of it. We have no idea, so the first point is that the Government want everyone simply to take their word for it.
      This is the same Government who have produced a raft of extra costs on business: the national minimum wage, the working time directive, the European works councils and parental leave. When each of those initially came through, the Government said, "Don't worry. There is no extra cost. There will be no problems." On each one, business said, "Rubbish."
      The Government said that there would be no cost at all in relation to the working families tax credit. They even voted down amendments that were tabled by the Conservative party and by the Liberal Democrats. Now we find that those in the other place are up in arms because they realise how much it will.
      The second point was raised by my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning); it is a powerful one, although I do not think that the Minister finally answered it. She was talking about the profits level of £3,770 a year. The point that she was making was that
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      there is a grey area about exactly where the earnings threshold£the earnings assessment£would be. Because money may have been ploughed back into the business, profits may not be high enough to break through, so there is a grey area.
      The Minister did not deal with that point. Certainly I do not feel that the point was clarified in his reply, and certainly the people about whom my hon. Friend the Member for Tiverton and Honiton spoke would not have understood what he meant in trying to deal with it. Although the Minister may be right in his answers to our questions, at this point, it is simply too early to know the right answers. The Government want to rush through the provision even though they have 15 months before it is implemented.
      4.30 pm
      Mrs. Browning: I am grateful to my hon. Friend for again raising the issue with the Minister. The Minister seemed to be under the impression that, once self-employed people opt—based on expectations of their business's profitability—to make national insurance contributions as self-employed people at a certain level, that level will be set in tablets of stone. As we know, once a financial year has ended and a self-employed person's accounts have been approved by the Inland Revenue, and if there has been an NI contribution underpayment, the Inland Revenue will come back to that self-employed person for any shortfall.
      Mr. Duncan Smith: I am grateful to my hon. Friend, who makes the point very well—I hope that my hon. Friends have understood it. She was making the point that we are not questioning whether the Minister was right or wrong in his reply, but saying that, ultimately, he does not yet know the answer to our questions.
      It is incredible that, on Report, a very important provision is being included in the Bill, but Ministers cannot answer our questions. As I said, although Labour Members may accept anything that the Minister says—such as "This is night, not day", or "Tomorrow will be not tomorrow, but the day after"—the Opposition's job is to ask questions. I ask: on balance, will the new clause make it more or less likely that those whom the Government intend to benefit will so benefit? Unless our questions are answered, there is no way in which we can possibly support the new clause.
      The Government talk endlessly about benefiting a specific group of women, but for one year, Ministers will be taking away from those same women £1.6 billion in married couples allowance. Those women will receive not one penny of that money; it will go straight into the Treasury's back pocket.
      Ministers ask us to believe that they are showing a bit of largesse and are really very decent, giving a hard-pressed group of women some extra money—but I do not believe a word of it. The public will not trust the Government on the issue. The Government should not be trusted on it.
      Ministers have 15 months—plenty of time—before implementing the proposals. Why do they not make proper proposals and give us time to consider them? The new clause is simply a sop to their own Back Benchers, to try to buy them off. What a joke.
      Mr. Bayley: With the permission of the House, I should like to answer the additional question asked by

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      the hon. Gentleman and deal with the point, which he reiterated, made by the hon. Member for Tiverton and Honiton.
      First, the hon. Gentleman asked what the cost of implementing the measure will be. The cost to the Government will be £15 million. The cost to employers—for reasons that we have already discussed—will be nothing.
      Secondly, on the point originally made by the hon. Member for Tiverton and Honiton, I shall repeat my earlier reply. This time, however, I hope that the hon. Member for Chingford and Woodford Green might listen to it and understand it. Entitlement to maternity allowance is based not on earnings but on national insurance contributions. The NI contributions that are taken into account are those on an individual's record at the time that person applies for maternity allowance. That is how the system has operated in the past, and how it will operate in the future. The rule is simple, understandable and easy to operate.
      In future, however, self-employed women on lower earnings will benefit from an allowance; previously, they have not so benefited. Self-employed women, regardless of earnings level, will benefit from the same rate of allowance as employed women. That must be a good thing. Employed women on low earnings, who have previously been denied maternity allowance, will be entitled to the allowance and will receive it, so that they are able to take and use their maternity leave. That must be good for the women concerned, for their health and for the health of the children. It is a sensible measure from a Government who want family-friendly employment policies. Labour Members will vote for it. I shall be astonished if Conservative Members vote against it, but that is in their hands.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 365, Noes 130.

      Division No. 177]

      [4.35 pm

      AYES

      Abbott, Ms Diane

      Benn, Rt Hon Tony

      Ainger, Nick

      Bennett, Andrew F

      Ainsworth, Robert (Cov'try NE)

      Benton, Joe

      Alexander, Douglas

      Berry, Roger

      Allan, Richard

      Best, Harold

      Allen, Graham

      Betts, Clive

      Anderson, Donald (Swansea E)

      Blears, Ms Hazel

      Anderson, Janet (Rossendale)

      Blizzard, Bob

      Armstrong, Rt Hon Ms Hilary

      Boateng, Paul

      Ashdown, Rt Hon Paddy

      Borrow, David

      Atherton, Ms Candy

      Bradley, Keith (Withington)

      Atkins, Charlotte

      Bradley, Peter (The Wrekin)

      Austin, John

      Bradshaw, Ben

      Ballard, Jackie

      Brake, Tom

      Banks, Tony

      Breed, Colin

      Barnes, Harry

      Brinton, Mrs Helen

      Barron, Kevin

      Brown, Rt Hon Gordon

      Battle, John

      (Dunfermline E)

      Bayley, Hugh

      Brown, Russell (Dumfries)

      Beard, Nigel

      Browne, Desmond

      Beckett, Rt Hon Mrs Margaret

      Bruce, Malcolm (Gordon)

      Begg, Miss Anne

      Buck, Ms Karen

      Beggs, Roy

      Burden, Richard

      Beith, Rt Hon A J

      Burgon, Colin

      Bell, Martin (Tatton)

      Burnett, John

      Bell, Stuart (Middlesbrough)

      Butler, Mrs Christine

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      Byers, Rt Hon Stephen

      Fyfe, Maria

      Cable, Dr Vincent

      Gapes, Mike

      Campbell, Alan (Tynemouth)

      Gerrard, Neil

      Campbell, Mrs Anne (C'bridge)

      Gibson, Dr Ian

      Campbell, Rt Hon Menzies

      Godsiff, Roger

      (NE Fife)

      Goggins, Paul

      Campbell, Ronnie (Blyth V)

      Gordon, Mrs Eileen

      Campbell-Savours, Dale

      Gorrie, Donald

      Cann, Jamie

      Griffiths, Nigel (Edinburgh S)

      Caplin, Ivor

      Griffiths, Win (Bridgend)

      Casale, Roger

      Grocott, Bruce

      Caton, Martin

      Grogan, John

      Cawsey, Ian

      Gunnell, John

      Chapman, Ben (Wirral S)

      Hain, Peter

      Chaytor, David

      Hall, Mike (Weaver Vale)

      Clapham, Michael

      Hall, Patrick (Bedford)

      Clark, Rt Hon Dr David (S Shields)

      Hancock, Mike

      Clark, Paul (Gillingham)

      Hanson, David

      Clarke, Charles (Norwich S)

      Harman, Rt Hon Ms Harriet

      Clarke, Eric (Midlothian)

      Heal, Mrs Sylvia

      Clarke, Rt Hon Tom (Coatbridge)

      Healey, John

      Clarke, Tony (Northampton S)

      Henderson, Doug (Newcastle N)

      Clelland, David

      Henderson, Ivan (Harwich)

      Clwyd, Ann

      Hepburn, Stephen

      Coaker, Vernon

      Heppell, John

      Coffey, Ms Ann

      Hewitt, Ms Patricia

      Coleman, Iain

      Hill, Keith

      Colman, Tony

      Hinchliffe, David

      Connarty, Michael

      Hodge, Ms Margaret

      Corbett, Robin

      Hoey, Kate

      Corbyn, Jeremy

      Home Robertson, John

      Cotter, Brian

      Hood, Jimmy

      Cousins, Jim

      Hoon, Geoffrey

      Cox, Tom

      Hope, Phil

      Cranston, Ross

      Hopkins, Kelvin

      Crausby, David

      Howarth, Alan (Newport E)

      Cryer, John (Hornchurch)

      Howarth, George (Knowsley N)

      Cummings, John

      Howells, Dr Kim

      Cunningham, Rt Hon Dr Jack

      Hoyle, Lindsay

      (Copeland)

      Hughes, Ms Beverley (Stretford)

      Cunningham, Jim (Cov'try S)

      Hughes, Kevin (Doncaster N)

      Curtis—Thomas, Mrs Claire

      Hughes, Simon (Southwark N)

      Dafis, Cynog

      Humble, Mrs Joan

      Dalyell, Tam

      Hurst, Alan

      Darling, Rt Hon Alistair

      Hutton, John

      Darvill, Keith

      Iddon, Dr Brian

      Davey, Edward (Kingston)

      Illsley, Eric

      Davey, Valerie (Bristol W)

      Jackson, Ms Glenda (Hampstead)

      Davidson, Ian

      Jackson, Helen (Hillsborough)

      Davies, Rt Hon Denzil (Llanelli)

      Jamieson, David

      Davies, Geraint (Croydon C)

      Jenkins, Brian

      Dean, Mrs Janet

      Johnson, Alan (Hull W & Hessle)

      Denham, John

      Johnson, Miss Melanie

      Dismore, Andrew

      (Welwyn Hatfield)

      Dobbin, Jim

      Jones, Barry (Alyn & Deeside)

      Donohoe, Brian H

      Jones, Mrs Fiona (Newark)

      Doran, Frank

      Jones, Helen (Warrington N)

      Drew, David

      Jones, Ms Jenny

      Drown, Ms Julia

      (Wolverh'ton SW)

      Dunwoody, Mrs Gwyneth

      Jones, Jon Owen (Cardiff C)

      Eagle, Angela (Wallasey)

      Jones, Martyn (Clwyd S)

      Eagle, Maria (L'pool Garston)

      Jowell, Rt Hon Ms Tessa

      Edwards, Huw

      Kaufman, Rt Hon Gerald

      Efford, Clive

      Keeble, Ms Sally

      Ellman, Mrs Louise

      Keen, Alan (Feltham & Heston)

      Ennis, Jeff

      Keetch, Paul

      Ewing, Mrs Margaret

      Kelly, Ms Ruth

      Field, Rt Hon Frank

      Kemp, Fraser

      Fisher, Mark

      Kennedy, Jane (Wavertree)

      Fitzsimons, Lorna

      Kidney, David

      Flynn, Paul

      Kilfoyle, Peter

      Follett, Barbara

      King, Andy(Rugby & Kenilworth)

      Forsythe, Clifford

      Kumar, Dr Ashok

      Foster, Don (Bath)

      Ladyman, Dr Stephen

      Foster, Michael J (Worcester)

      Lawrence, Ms Jackie

      Foulkes, George

      Laxton, Bob

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      Lepper, David

      Rapson, Syd

      Leslie, Christopher

      Raynsford, Nick

      Levitt, Tom

      Reid, Rt Hon Dr John (Hamilton N)

      Lewis, Terry (Worsley)

      Rendel, David

      Linton, Martin

      Robertson, Rt Hon George

      Lloyd, Tony (Manchester C)

      (Hamilton S)

      Lock, David

      Roche, Mrs Barbara

      Love, Andrew

      Rooker, Jeff

      McAllion, John

      Rooney, Terry

      McAvoy, Thomas

      Ross, Ernie (Dundee W)

      McCabe, Steve

      Roy, Frank

      McCartney, Rt Hon Ian

      Ruane, Chris

      (Makerfield)

      Ruddock, Joan

      McDonagh, Siobhain

      Russell, Bob (Colchester)

      McDonnell, John

      Russell, Ms Christine (Chester)

      McGuire, Mrs Anne

      Ryan, Ms Joan

      Mclsaac, Shona

      Salter, Martin

      McKenna, Mrs Rosemary

      Sanders, Adrian

      Mackinlay, Andrew

      Sarwar, Mohammad

      Maclennan, Rt Hon Robert

      Savidge, Malcolm

      McNamara, Kevin

      Sawford, Phil

      McNulty, Tony

      Sedgemore, Brian

      MacShane, Denis

      Shaw, Jonathan

      Mactaggart, Fiona

      Sheldon, Rt Hon Robert

      Mc Walter, Tony

      Simpson, Alan (Nottingham S)

      Mahon, Mrs Alice

      Skinner, Dennis

      Mallaber, Judy

      Smith, Rt Hon Andrew (Oxford E)

      Mandelson, Rt Hon Peter

      Smith, Angela (Basildon)

      Marsden, Gordon (Blackpool S)

      Smith, Rt Hon Chris (Islington S)

      Marsden, Paul (Shrewsbury)

      Smith, Miss Geraldine

      Marshall, David (Shettleston)

      (Morecambe & Lunesdale)

      Marshall—Andrews, Robert

      Smith, Jacqui (Redditch)

      Martlew, Eric

      Smith, John (Glamorgan)

      Maxton, John

      Smith, Llew (Blaenau Gwent)

      Meacher, Rt Hon Michael

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

      Meale, Alan

      Southworth, Ms Helen

      Michie, Bill (Shefld Heeley)

      Spellar, John

      Miller, Andrew

      Squire, Ms Rachel

      Moffatt, Laura

      Starkey, Dr Phyllis

      Moonie, Dr Lewis

      Steinberg, Gerry

      Moran, Ms Margaret

      Stevenson, George

      Morgan, Alasdair (Galloway)

      Stewart, David (Inverness E)

      Morgan, Ms Julie (Cardiff N)

      Stinchcombe, Paul

      Morley, Elliot

      Stoate, Dr Howard

      Morris, Ms Estelle (B'ham Yardley)

      Stott, Roger

      Morris, Rt Hon John (Aberavon)

      Strang, Rt Hon Dr Gavin

      Mountford, Kali

      Straw, Rt Hon Jack

      Mowlam, Rt Hon Marjorie

      Stringer, Graham

      Mudie, George

      Stuart, Ms Gisela

      Mullin, Chris

      Stunell, Andrew

      Murphy, Denis (Wansbeck)

      Sutcliffe, Gerry

      Murphy, Jim (Eastwood)

      Swinney, John

      Naysmith, Dr Doug

      Taylor, Rt Hon Mrs Ann

      Oaten, Mark

      (Dewsbury)

      O'Brien, Bill (Normanton)

      Taylor, Ms Dari (Stockton S)

      O'Hara, Eddie

      Temple—Morris, Peter

      Olner, Bill

      Thomas, Gareth (Clwyd W)

      Organ, Mrs Diana

      Thomas, Gareth R (Harrow W)

      Osborne, Ms Sandra

      Timms, Stephen

      Pearson, Ian

      Tipping, Paddy

      Pendry, Tom

      Todd, Mark

      Pickthall, Colin

      Touhig, Don

      Pike, Peter L

      Trickett, Jon

      Plaskitt, James

      Truswell, Paul

      Pollard, Kerry

      Turner, Dennis (Wolverh'ton SE)

      Pond, Chris

      Turner, Dr Desmond (Kemptown)

      Pound, Stephen

      Turner, Dr George (NW Norfolk)

      Powell, Sir Raymond

      Twigg, Derek (Halton)

      Prentice, Ms Bridget (Lewisham E)

      Twigg, Stephen (Enfield)

      Prentice, Gordon (Pendle)

      Vaz, Keith

      Primarolo, Dawn

      Vis, Dr Rudi

      Prosser, Gwyn

      Walley, Ms Joan

      Purchase, Ken

      Ward, Ms Claire

      Quinn, Lawrie

      Wareing, Robert N

      Radice, Giles

      Watts, David

      Rammell, Bill

      Webb,Steve

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      White, Brian

      Winnick, David

      Whitehead, Dr Alan

      Winterton, Ms Rosie (Doncaster C)

      Wicks, Malcolm

      Wise, Audrey

      Wigley, Rt Hon Dafydd

      Wood, Mike

      Williams, Rt Hon Alan

      Worthington, Tony

      (Swansea W)

      Wright, Anthony D (Gt Yarmouth)

      Williams, Alan W (E Carmarthen)

      Wright, Dr Tony (Cannock)

      Williams, Mrs Betty (Conwy)

      Wyatt, Derek

      Willis, Phil

      Tellers for the Ayes:

      Wills, Michael

      Mr. Greg Pope and

      Wilson, Brian

      Mr. Jim Dowd.

      NOES

      Ainsworth, Peter (E Surrey)

      Horam, John

      Amess, David

      Howard, Rt Hon Michael

      Ancram, Rt Hon Michael

      Howarth, Gerald (Aldershot)

      Arbuthnot, Rt Hon James

      Hunter, Andrew

      Atkinson, Peter (Hexham)

      Jenkin, Bernard

      Bercow, John

      Johnson Smith,

      Beresford, Sir Paul

      Rt Hon Sir Geoffrey

      Blunt, Crispin

      Key, Robert

      Body, Sir Richard

      King, Rt Hon Tom (Bridgwater)

      Boswell, Tim

      Kirkbride, Miss Julie

      Bottomley, Peter (Worthing W)

      Laing, Mrs Eleanor

      Bottomley, Rt Hon Mrs Virginia

      Lait, Mrs Jacqui

      Brady, Graham

      Lansley, Andrew

      Brazier, Julian

      Leigh, Edward

      Brooke, Rt Hon Peter

      Letwin, Oliver

      Browning, Mrs Angela

      Lewis, Dr Julian (New Forest E)

      Burns, Simon

      Lidington, David

      Butterfill, John

      Lilley, Rt Hon Peter

      Chapman, Sir Sydney

      Lloyd, Rt Hon Sir Peter (Fareham)

      (Chipping Barnet)

      Loughton, Tim

      Chope, Christopher

      Luff, Peter

      Clappison, James

      Lyell, Rt Hon Sir Nicholas

      Clark, Rt Hon Alan (Kensington)

      MacGregor, Rt Hon John

      Clark, Dr Michael (Rayleigh)

      McIntosh, Miss Anne

      Clifton—Brown, Geoffrey

      MacKay, Rt Hon Andrew

      Colvin, Michael

      McLoughlin, Patrick

      Cormack, Sir Patrick

      Maples, John

      Cran, James

      Maude, Rt Hon Francis

      Curry, Rt Hon David

      Mawhinney, Rt Hon Sir Brian

      Davies, Quentin (Grantham)

      May, Mrs Theresa

      Davis, Rt Hon David (Haltemprice & Howden)

      Moss, Malcolm

      Nicholls, Patrick

      Day, Stephen

      Duncan, Alan

      Ottaway, Richard

      Duncan Smith, Iain

      Page, Richard

      Emery, Rt Hon Sir Peter

      Paice, James

      Evans, Nigel

      Paterson, Owen

      Faber, David

      Pickles, Eric

      Fabricant, Michael

      Randall, John

      Fallon, Michael

      Redwood, Rt Hon John

      Forth, Rt Hon Eric

      Robathan, Andrew

      Fowler, Rt Hon Sir Norman

      Robertson, Laurence (Tewk'b'ry)

      Fraser, Christopher

      Roe, Mrs Marion (Broxbourne)

      Gale, Roger

      Rowe, Andrew (Faversham)

      Garnier, Edward

      Ruffley, David

      Gibb, Nick

      St Aubyn, Nick

      Gill, Christopher

      Sayeed, Jonathan

      Gillan, Mrs Cheryl

      shephard, Rt Hon Mrs Gillian

      Goodlad, Rt Hon Sir Alastair

      Simpson, Keith (Mid-Norfolk)

      Gorman, Mrs Teresa

      Soames, Nicholas

      Gray, James

      Spicer, Sir Michael

      Green, Damian

      Spring, Richard

      Greenway, John

      Stanley, Rt Hon Sir John

      Grieve, Dominic

      Swayne, Desmond

      Gummer, Rt Hon John

      Syms, Robert

      Hague, Rt Hon William

      Tapsell, Sir Peter

      Hamilton, Rt Hon Sir Archie

      Taylor, Ian (Esher & Walton)

      Hammond, Philip

      Taylor, John M (Solihull)

      Hawkins, Nick

      Taylor, Sir Teddy

      Heald, Oliver

      Trend, Michael

      Heathcoat—Amory, Rt Hon David

      Tyrie, Andrew

      Hogg, Rt Hon Douglas

      Walter, Robert

      Wardle, Charles

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      Waterson, Nigel

      Wilshire, David

      Wells, Bowen

      Yeo, Tim

      Whitney, Sir Raymond

      Young, Rt Hon Sir George

      Whittingdale, John

      Tellers for the Noes:

      Wilkinson, John

      Mr. Tim Collins and

      Willetts, David

      Sri David Madel.

      Question accordingly agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 10

      OPTIONAL WORK-FOCUSED INTERVIEWS
      `. After section 2B of the Administration Act (inserted by section 49 above) there shall be inserted—
      "Optional work focused interviews
      2C.—(1) Regulations may make provision for conferring on local authorities functions in connection with conducting work-focused interviews in cases where such interviews are requested or consented to by persons to whom this section applies.
      (2) This section applies to persons making claims for or entitled to—

      (a) any of the benefits listed in section 2A(2) above, or

      (b) any prescribed benefit;

      and it so applies regardless of whether such persons have, in accordance with regulations under section 2A above, already taken part in interviews conducted under such regulations.
      (3) The functions which may be conferred on a local authority by regulations under this section include functions relating to—

      (a) the obtaining and receiving of information for the purposes of work-focused interviews conducted under the regulations;

      (b) the recording and forwarding of information supplied at, or for the purposes of, such interviews;

      (c) the taking of steps to identify potential employment or training opportunities for persons taking part in such interviews.

      (4) Regulations under this section may make different provision for different areas or different authorities.
      (5) In this section "work-focused interview", in relation to a person to whom this section applies, means an interview conducted for such purposes connected with employment or training in the case of such a person as may be prescribed; and the purposes which may be so prescribed include—

      (a) purposes connected with the existing or future employment or training prospects or needs of such a person, and

      (b) (in particular) assisting or encouraging such a person to enhance his employment prospects." '.—[Mr. Andrew Smith.]

      Brought up, and read the First time.
      4.45 pm
      The Minister for Employment, Welfare to Work and Equal Opportunities (Mr. Andrew Smith): I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to discuss the following: Amendment (a) to the proposed new clause, leave out lines 22 and 23.
      Amendment No. 87, in clause 49, page 48, line 40, leave out from beginning to end of line 3 on page 49.
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      Amendment No. 89, in page 48, line 40, leave out `designated authority' and insert 'Secretary of State'.
      Amendment No. 90, in page 48, line 46, leave out `designated authority' and insert 'Secretary of State'.
      Amendment No. 88, in page 49, line 17, leave out from beginning to end of line 22.
      Government amendments Nos. 16, 17, 78, 48, 49, 19, 51, 50 and 52.
      Mr. Smith: Clause 49 supports the introduction of the single work-focused gateway to the benefit system.
      The single gateway will radically change the way in which people access benefits. Under the single gateway, claimants will have an interview and get a personal adviser. They will be treated as individuals, and offered the help that they need to become more independent, where appropriate, through work. The single gateway will also provide a better quality service, by bringing together the relevant services currently operated by the Benefits Agency, the Employment Service and local authorities. The gateway approach will stop people being shunted from pillar to post and it will give them more help, as well as underlining that with rights go responsibilities. After extensive scrutiny in Committee, this part of the Bill received a measure of cross-party support, and I hope that the same will be the case today.
      I shall start by dealing with the Government amendments in this rather large group as they are make minor, technical changes to this provision to ensure that the gateway works in the way intended. I shall then move on to deal with the more substantial issues raised by the Opposition in their amendments.
      New clause 10 and the consequential Government amendment No. 48 will enable local authorities to conduct voluntary work-focused interviews and advice. That has always been the intention. We want local authorities to be able to provide additional help to people who want it—above and beyond the interviews that we will require under clause 49. As it is currently drafted, the Bill only enables local authorities to carry out compulsory interviews. New clause 10 will correct that position.
      Government amendment No. 16 also relates to the role of local authority staff in administering the gateway. It clarifies the definition of "designated authority" in clause 49. It makes it clear that that includes the common arrangement for administering housing benefits in which people are contracted by local authorities to deliver services on their behalf. That change reflects the definition of "local authority" in Clause 63, which enables such staff to participate in the information flows that that clause allows.
      Mr. Duncan Smith: Originally, there were three definitions in clause 16 and now there are four. What or who prompted the right hon. Gentleman to add a definition? There was no mention of the need to do so in Committee, but the extra definition has suddenly emerged on Report.
      Mr. Smith: On looking closely at the provisions of the Bill, we were advised that in order to operate the single gateway as intended—which, as I have said, enjoys a measure of support from the Opposition—it is only sensible to include people who have been contracted to

      665
      supply services in administering housing and council tax benefit on behalf of local authorities, as well as staff employed by local authorities. It is a straightforward provision to ensure that local authorities will act fully within the law when they operate the single gateway in the integrated way that is intended. The change provides consistency, and will ensure that such staff are not excluded from playing a part in the administration of the new programme.
      Government amendment No. 17 is a simple consequential amendment which re-numbers the subsection. Government amendment No. 49 will ensure that local authorities can be paid for their role in helping to deliver the single work-focused gateway and our plans for a modern, integrated social security system. At present, local authorities can deal only with claims for housing benefit and council tax benefit. Clauses 49 and 62, and new clause 10, will extend their statutory powers—enabling local authorities to conduct work-focused interviews, and handle claims and information relating to a range of social security benefits. Existing powers to pay subsidy to local authorities do not cover those additional functions.
      Mr. Duncan Smith: The right hon. Gentleman is now talking about local authorities conducting interviews. Employment agencies are skilled in conducting such interviews. What skills will the staff of local authorities obtain that allow them to talk to people about possibilities in the jobs market? I am somewhat thrown as to how those people, who have never been involved in such work, can suddenly become involved in it.
      Mr. Smith: The hon. Gentleman cannot have been following events quite as closely as his hon. Friends who served on the Committee. It is a central aim of the single work-focused gateway that we stop people being shunted from pillar to post by drawing together in one place, at one point of contact, functions that are at present discharged separately. It is and will be an integrated operation. Therefore, positions for staff operating the single work-focused gateway and personal advisory interviews have been open to application from, and have been applied for by, staff of local authorities as well as those of the Employment Service and the Benefits Agency.
      The hon. Gentleman would do well to remember that many local authorities have initiated one-stop shops and advice services, so it is perfectly reasonable to expect their staff to have relevant experience. The amendment provides, not only that they can play their part in those functions, but that, where subsidy is payable, the powers in the Social Security Administration Act 1992 will be extended so that those local councils can be paid subsidy in respect of those functions.
      Mr. Eric Pickles: The right hon. Gentleman will recall that, in Committee, there were many discussions regarding confidentiality of information and people employed on a contract. I cannot see among the amendments anything that would apply to employees of local authorities the confidentiality provisions that apply to employees of the Employment Service. I am sure that they are included, but I should like an assurance to that effect.
      Mr. Smith: I thought that I had said that equivalent arrangements for sharing information with such staff were
      666
      in the Bill, as amended. However, it is important not only that they can share that information but that there is a legal basis for them to do the work, and that the local council can receive appropriate subsidy in respect of those functions.
      Amendments Nos. 19, 50 and 51 are purely technical. They enable regulations relating to clause 49, new clause 10 and new paragraph 68A to schedule 12 of the 1992 Act to be made within two months of Royal Assent. We want to be able to present regulations to Parliament as soon as possible after that. That will allow staff and the outside world as much time as possible to prepare for the onset of the compulsory phase of the gateway, which, under the Bill, will commence in April 2000. The amendments are simply necessary to ensure that that can happen.
      Amendment No. 52 is a technical amendment, which ensures that the changes introduced by amendment No. 49 will apply in England, Wales and Scotland. Amendment No. 78 expands the definition of a work-focused interview, to clarify that such interviews can deal with future employment or training prospects. It makes it clear that its purposes may also include encouraging people to enhance their employment prospects over time. It spells out our intention to ensure that the interview will be helpful and relevant—not just for those with an immediate prospect of work. The amendment helps to ensure that work-focused interviews will be available to the greatest possible number of people, providing them all with the opportunity to move towards independence.
      As I explained, these are largely technical amendments, which ensure that the policy intention, so thoroughly examined in Committee, can be delivered. I commend them to the House.
      I shall now discuss the Opposition amendments. Amendment (a) attempts to remove subsection (4) from new clause 10. The purpose of that subsection is to ensure that those local authorities within the 12 pilot areas of the single gateway have the additional powers that they need to conduct voluntary work-focused interviews. There is no need for all local authorities to have those powers at this stage. Subsection (4) gives us the ability to ensure that areas not involved in the pilots remain unaffected by the provision.
      5 pm
      Amendment No. 87 would remove our ability to give personal advisers discretion to defer or waive the requirement to take part in a work-focused interview. We need that discretion because the heart of the policy is that staff will be able to make decisions on whether or not an interview is appropriate on a case by case basis and in a way that takes account of the needs and circumstances of the individual.
      Our expectation is that the vast majority of people will have an interview immediately, but advisers will judge whether the help and support they can offer will be of use to the client immediately, or whether intervention might be more effective later. There may be clients—a grieving widow, for example, or a mother who has just given birth—for whom an immediate interview is not appropriate. In other situations, people may benefit from an interview straight away, even if there is no early prospect of work.

      667
      It would completely undermine the policy if we attempted to set out in regulations the precise categories to which that principle applies. We want work-focused interviews to be as helpful as possible. We think that they will provide an excellent opportunity for clients to discuss their situations and the action that they might take. We want to get away from categorising people by some predetermined label.
      Mrs. Browning: I hope to expand on this point later in the debate, but I am concerned by the Government's apparent and remarkable failure to understand the groups who may be required to attend interviews. Many of those who receive severe disablement benefit have lifetime conditions. I am not labelling them, just recognising that they have medical conditions. For many such people, to have to attend an interview straight away would be a major trauma. While the Minister recognises the impact of an interview on someone who has just been bereaved, he does not seem to appreciate that for those who suffer certain types of medical condition, the suddenness of having to appear at an interview would be extremely traumatic.
      Mr. Smith: Recipients of that allowance suffer a wide range of conditions. I do not say that it is appropriate in every case that they should have an interview straight away, but nor is it right to defer the interview in every case. Flexibility and sensitivity to clients are at the centre of our approach on the single work-focused gateway, but we want, as far as possible, to provide an early interview. Those interviews are not just about exploring barriers to employability, although that is important. They also provide people with an opportunity to meet their personal advisers to discuss a wide range of issues to do with their circumstances and their entitlement to benefit.
      We shall see how well the pilots work, but I believe firmly that sensitively and expertly conducted interviews will be welcomed by claimants who will receive more effective support and advice. They will have a point of contact to which to turn for advice, and that point simply does not exist with any constancy at present. The hon. Lady should be cautious about saying that so-and-so should or should not have interview. We intend that people should find the interviews helpful and should welcome the opportunity to have them as soon as is sensible.
      Amendment No. 87 would remove our ability to give personal advisers that discretion to defer or waive the requirement. It would totally undermine the policy if we attempted to be overly prescriptive in regulation in the way in which the hon. Lady appeared to suggest. Staff need discretion to decide whether an interview is appropriate according to the individual circumstances of each claimant.
      Furthermore, and this may further allay the hon. Lady's concern, advisers need to have the discretion to defer the work-focused part of the interview if it becomes apparent during the interview that it is not appropriate, for example if the client is distressed or something about his or her personal circumstances emerges that was not previously apparent.
      Mrs. Browning: The right hon. Gentleman is saying that we should go ahead with the interview and curtail it if it
      668
      causes distress. It is almost 100 per cent. certain that the way in which he intends to make people attend the interview will cause distress to people with certain medical conditions. I ask him to think again. His suggestion shows a remarkable lack of knowledge and sensitivity on his part and on the part of the Government. I am thinking of conditions that might broadly be categorised as mental health problems and developmental disorders.
      Mr. Smith: We are sensitive to the position of people who have those difficulties. Indeed, they were the subject of extensive debate and consideration in Committee. I remind the hon. Lady that clients can be accompanied to the interviews if they want. Of course, the advisers are being carefully trained to undertake the interviews. The whole point of the pilots is to learn from the experience.
      The hon. Lady should be careful about producing yet more regulations that attempt to specify in fine detail matters that must be decided in large measure by professional judgment informed by good experience and sensitivity to the needs of clients. That is the way in which the system will operate.
      The Opposition amendment could have some bizarre consequences, as it would be impossible to identify in regulations every situation in which the interview should be waived or deferred. Therefore, someone with a genuine case for deferral could be made to have the interview straight away if his or her precise circumstance had not been specified in secondary legislation.
      Mrs. Browning: Can the right hon. Gentleman guarantee that the sensitivity and experience will be such that no one from the two categories of people about whom I am concerned—those with mental health problems and developmental disorders—will do a runner or suffer a relapse in their overall mental health when invited to attend such an interview? That is the reality of what happens to such people when they suddenly get that sort of letter.
      Mr. Smith: It is ridiculous for the hon. Lady to ask me to assure her that no one who is invited to attend an interview will ever do a runner. She cannot be well informed about the day to day realities of life within the Benefits Agency and the Employment Service to suggest that a Minister could possibly give such an assurance. I will give her the assurance that people who are suffering from mental illness or other acute difficulties will be treated with sensitivity in the single work-focused interview and, moreover, that the purpose of the interview is to provide them with help, which they are not getting as a result of the way in which the system operates at present.
      Mr. Simon Burns: The right hon. Gentleman says that he envisages and desperately hopes that the system will be sensitive and I in no way disagree. I believe that that is what he is seeking. Given that the National Schizophrenia Fellowship has carried out a review of the client group in question, which suggests that the mental health of 55 per cent. of people with schizophrenia and 65 per cent. of those with depression had worsened as a result of the Government's review of the benefits system, how can he be confident that the

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      change that will be put into operation by the legislation will not have a similar effect on those who sadly suffer from mental illness?
      Mr. Smith: Because we are listening carefully to the groups that represent such people in the design of the single work-focused interviews. From the outset, I proposed organising sessions where we invited representatives from the various groups to test the process to destruction and ask what could possibly go wrong, to ensure that every possible contingency was prepared for in how the process is designed and delivered, and in the training that people receive. One cannot train and prepare people for everything that might happen, but that is the case in the present system. This system will be infinitely better than the anonymous, alienating and sometimes unhelpful way in which many clients are processed now.
      Mr. Burns: The Minister said that the Government were listening carefully to the views of special interest groups. Of that, again, I have no doubt, but it is one thing to listen sensitively and another to act on what one hears. If the Government are listening sensitively, what changes have they made as a result? Why will they not accept the view of all the groups that it would be better to exempt people suffering from mental illness?
      Mr. Smith: I disagree with the hon. Gentleman. He mentioned the National Schizophrenia Fellowship, which is one of the bodies that runs a pilot to help disabled people into work under the new deal for disabled people. Of course, with them and other groups, we will learn from the experience of the new deal for disabled people, which again involves interviews and all the hazards that he noted. They are clearly being dealt with in a way that commands the confidence of the group or it would not be involved.
      Mr. Burns: The Minister said that he disagreed with what I said because he had been working with the NSF. Of that, again, I have no doubt but can he explain the NSF's briefing, dated 17 May, which states:
      "We believe that people with a severe mental illness should be exempted from the compulsory work focused interviews"?
      Mr. Smith: The Government's problem in attempting to act on that would be the definition of "severity". I have already assured the House that where it is inappropriate to hold such an interview, the advisory service will, of course, defer it to an appropriate time. I have also given the assurance that where it becomes apparent during the course of an interview that it would not be right to have the work-focused part of the interview, that part can be deferred. It is not as though such problems cannot arise in the present system when someone goes into a social security office or job centre. The difference is that our proposed arrangements make systematic and sympathetic provision for such people's needs that is not made in the present system.
      Mrs. Browning: I disagree with the Minister. As long as their medical professionals provide them with regular certification, people who receive severe disablement allowance do not go through this inquisitorial process
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      at all. The Minister's arrangements introduce something that a group of people with lifelong disabilities will be exposed to for the first time.
      Mr. Smith: I have always counted the hon. Lady as one of those who, like us, believed in mainstreaming rights for disabled people and giving them a full and equal opportunity to take part in society, yet she erects a definition that would set them apart. We know from evidence and surveys, for example, that 1 million disabled people want to work. They want the dignity of being treated like everyone else. They want that civil right. They want the same opportunities that others enjoy.
      We are talking about an advisory interview. Except for those for whom the jobseeker's allowance is the appropriate benefit, no requirement is being made except that those concerned attend an interview and discuss their circumstances. Help will be available which is not available now. I am surprised that the hon. Lady would deny disabled people that help.
      5.15 pm
      Mrs. Browning: The Minister fails to understand the specific groups of people about whom I am talking. One of the categories consists of those with a lifelong developmental disorder. Many of them are in receipt of the severe disablement allowance. Many of them would like employment, and for most of my adult life I have been active in trying to help them into employment. However, we must face realities. When they receive the letter to attend an interview, and even with somebody to support them, the process will have to be dealt with extremely sensitively. The Minister should make further inquiries about the categories of people that he will invite into an office. If they are set up to fail yet again in their lives, which could well happen, that will have a dramatic effect on their lives.
      Mr. Andy King: The hon. Lady is failing them entirely.
      Mr. Smith: As my hon. Friend says, the hon. Lady appears to be failing them entirely before they start. The Government agree with her about the importance of sensitivity and care. However, if she is saying that by definition disabled people should not have the interview, we shall have to agree to differ. There has been talk, understandably, about people going in for interviews. Where it is better to do so, the interview can and would be held in the prospective claimant's home or in another location of his or her choosing.
      Mrs. Lait: The right hon. Gentleman will know that in Committee, I raised the case of one of my constituents who is a paranoid psychotic. He is in the process of going to the appeal tribunal, and I alluded to that in Committee. I saw him on Friday. His condition is deteriorating by the minute and by the day. He is now being prescribed further drugs to calm him down so that he does no damage to himself or to anyone else. That is because of the stress that has been created by having to go to the tribunal.
      My hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) is making precisely the same point about the single work-focused gateway. I am sure that my

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      constituent would get himself into exactly the same state as he is in now if he, too, was called for interview during that process. Does not the Minister see the point—it was made by the Royal College of Psychiatrists: people with certain mental and developmental disorders deteriorate under the pressure of the form of interview that is proposed?
      Mr. Smith: I understand the point that the hon. Lady is making, and that is why we must be careful. However, that is not a reason for excluding disabled people from the interview.
      Mr. Tony McWalter: Concern about this matter is not confined to one side of the House. I have sought in correspondence with the ministerial team to make many of the points that are now being made by Opposition Members.
      Those of us who think that this is a good Bill which will constitute a significant advance for our country and for many people who have welfare and pension needs may nevertheless take the view that there is a group of people who, when invited to an interview by an authority, will have a condition that is significantly exacerbated by that very offer. I have sought assurances from the ministerial team that sensitivity will involve recognising that some people should have their interview not only deferred, but deferred sine die. If an interview is merely deferred, the additional psychological burden will cause their depression, concern and anxiety to deepen over time. I urge my right hon. Friend to have regard to the fact that unless full medical records are available and those records are used sometimes to defer such interviews sine die, there is a group of people who will unquestionably be affected deleteriously by the Government's proposal.
      Mr. Smith: I take serious note of the points made by my hon. Friend. Of course any medical recommendation in such instances would carry enormous weight. Just as it is appropriate in many circumstances to defer an interview, equally in circumstances where people's condition improves, it can be appropriate and helpful for them later to have the interview.
      Through the Bill and particularly through the single work-focused gateway, we are trying to get away from the practice of categorising people, pigeonholing them and treating them in a particular way in advance, rather than treating them as individuals in the light of their individual needs. We will have a more individually sensitive and responsive system.
      Ms Hazel Blears: Does my right hon. Friend agree that it is vital for us to address people's individual needs, rather than writing them off for years? I have people coming to my surgery who have been put on benefit and simply ignored—given no help, advice or support and not made to feel part of our society. They have been written off and left almost to rot. Is it not important that we make sure that everybody in our society is given help, support, encouragement and, of course, handled with sensitivity? People are part of our society,
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      whatever condition they are suffering from. It is important that the Government recognise their value and their individual contribution.
      Mr. Smith: Very well said. I agree with every word of what my hon. Friend says. It underlines the fact that our proposals for the single work-focused gateway are wholly consistent with our approach to the Disability Rights Commission, the new deal for disabled people and the other measures that we are taking to ensure that disabled people have full opportunities in the mainstream of our society.
      Mrs. Theresa May: If the Minister believes that individuals' needs should be taken into account, should he not accept that there are some individuals whose need is not to be forced to attend an interview? As has been ably set out by my hon. Friends the Members for Tiverton and Honiton (Mrs. Browning) and for Beckenham (Mrs. Lait), there are some people who will be severely affected by the mere fact of receiving a letter requiring them to go to an interview.
      The Minister speaks about sensitivity and individual needs. Will the letters that are sent out be differentiated according to the circumstances of the individual, or will there just be a standard letter, so that someone who falls into one of the categories referred to by my hon. Friend the Member for Tiverton and Honiton would receive the same letter as someone in receipt of jobseeker's allowance? How will the letters inviting people to an interview be worded?
      Mr. Smith: On the hon. Lady's first point, we have not said that everyone must have an interview. We accept both that it may be appropriate to defer the interview, and that in some cases—terminal illness is an obvious case, which we discussed extensively in Committee—it would indeed be inappropriate to suggest any interview in the future.
      With regard to the sensitivity of the letters, in most cases letters will not be necessary. There are two stages to the single work-focused gateway. There is the initial registration and orientation stage—the first approach in making a claim for benefit. At that stage the interview will be arranged, as far as possible within three days. In the case of someone with a mental illness, the first approach for benefit may not even be made by the person himself, but by another member of the family or a social worker. Sensible account will of course be taken of the information given when that first approach is made in deciding whether and how to arrange the interview.
      Mr. Burns: Will the Minister explain the situation of people suffering from schizophrenia or other severe mental illnesses who have a history of violence, but are not in a secure unit or in prison, and who enjoy freedom as a result of the Mental Health Act 1983 and subsequent legislation? Why will they not be exempt, given the difficulties that the strain of such an interview could cause them? He said that some interviews might take place in the interviewee's home. A number of people suffer from mental illness; the interviewer may not know a person's mental history and could be in danger. That is an important point to consider.
      Mr. Smith: Sensible security precautions must be taken, whether the interview takes place in the single gateway

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      centre, somebody's home or somewhere else. At root, our difference concerns not the judgment about what it is right or not right to do in particular circumstances, but the hon. Gentleman's naive expectation that everything can be finely defined in regulations so that we will know who will fall on one side of the line and who will fall on the other. I do not believe that that can be done.
      Mr. Chris Pond: Is my right hon. Friend aware that, like many other Members, I held a consultation meeting about the Bill with local disability organisations? Mine was well attended and they warmly welcomed the proposals on the gateway for two reasons. First, they believe that it is wrong that any category of person should be written off—exempted beforehand—and therefore given no opportunity to build on their abilities, hopes and aspirations. That was a powerful feeling among the people I spoke to.
      Secondly, although some hon. Members have discussed the stresses that might be linked to the requirement to attend an interview, is not considerable stress related to unemployment, to the prospect of having no future in the labour market and being unable to make contributions, and to people finding that they have been written off and isolated from the rest of society?
      Mr. Smith: Yes, indeed; my hon. Friend puts it well. Those who would, let us remember, deny people an interview would cut them off not only from immediate contact, but from the immediate help that could ease their circumstances and which their situation dictates. I start from the presumption that it is a good thing for as many people as possible to have an interview, although I accept that it makes sense to defer the interview for some people or not require them to take part in one.
      Mr. Duncan Smith: I hear what the Minister says, but, given what many of my colleagues have said about the problems in the grey area and the Government's commitment to holding interviews within three to four days of someone becoming eligible for benefit, does he not agree that problems will be created for the individual making the decision about who should or should not attend? Three to four days is a tight time scale; does he still stand by it, in which case does he not recognise what is the problem?
      Mr. Smith: I do, because we are determined that our operation of the system will be more efficient and effective than that with which Conservative Members were content to put up when they were in government.
      Amendments Nos. 88 to 90 would remove the phrase "designated authority" and its definition from clause 49. That term has been introduced to allow certain decisions about the requirement to attend a work-focused interview to be taken not only by the Secretary of State, but by local authority staff or by those contracted to provide services to either. Where a claimant's first point of contact with the benefits system is the housing benefit department, for example, local authority staff will be able decide whether an immediate work-focused interview is appropriate, or whether the requirement should be waived or deferred to a more appropriate time.
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      5.30 pm
      One of the key changes that the single gateway will introduce is that it will streamline the delivery of benefits. We will provide claimants with a better service through a one-stop shop, which will give people a single point of contact for all of their needs.
      The amendments would prevent those working for local authorities from taking decisions in relation to imposing the requirement to attend an interview. All decisions would need to be taken on behalf of the Secretary of State. If the amendments were accepted, we would be left with two choices: we could either exclude local authorities from the single gateway process altogether, which would mean continuing the present inefficient, piecemeal delivery mechanisms, with all their disadvantages for claimants; or we could refer decisions to the Secretary of State while allowing local authorities to retain responsibility for all other aspect of delivery of the single gateway, including conducting the interviews. However, that would be administratively cumbersome and would inevitably lead to delays in processing benefit claims. Moreover, it would run directly counter to the streamlined service that we all want to see provided.
      I appreciate that the Opposition's amendments may have been tabled to probe the Government. They have raised some important points during our debates. However, if enacted, the amendments would be damaging and would prevent us from achieving one of the prime aims of the single gateway initiative—an efficient, integrated service for benefit claimants, which would be better than anything that they have had before. I therefore urge the Opposition to withdraw their amendments.
      Mr. Duncan Smith: This is an important element of the Bill. As I said on Second Reading, when I was last directly involved in the Bill, the trouble is that a provision such as this deserves a Bill of its own. Lumping it together with parts of the Bill with which we disagree has meant that the only option for us is to vote against all of it, which creates problems.
      As we said on Second Reading, we do not have a problem with the idea of the single gateway in principle. After all, it is nothing more or less than a continuation of what we started with the jobseeker's allowance. There is great logic in directly connecting a claimant's interview process and eventual job achievement with the claiming of benefit. We made that clear years ago when we introduced the jobseeker's allowance. The Labour party in opposition opposed the jobseeker's allowance. We are prepared to let bygones be bygones, as Labour Members have now seen sense. They have come round to accepting not only the JSA, but the logic behind it, which is to try to connect those in receipt of benefit with their employment prospects.
      As my hon. Friends made clear in Committee, we have no problem with this provision in principle. We hope that it continues our JSA policy successfully. However, we have tabled amendments because the Government appear to point in two directions at the same time. We agree with the principle that people should be interviewed and should, hopefully, be moved into work unless they have a reasonable reason for not working, in which case they should receive benefit—they may suffer from certain disabilities, as my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) said, or have some

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      other problem, which could be clearly set out. However, the problem in general—I shall proceed to the particular—is that, in conjunction with this provision, the Government have taken a series of measures that will make it more difficult for those people to find employment.
      One of the keys to this whole process is that the gateway, if it is to be successful, must not become a bottleneck. The problem that we face is that the Government have talked about creating a gateway, but at the same time, they have succeeded in dramatically ramping up the costs on business—and there are more such proposals to come. I mentioned some of those costs in the previous debate, and I shall now wrap them up.
      Mr. Andrew Smith: What costs arising from the gateway fall on business?
      Mr. Duncan Smith: If the Minister holds his enthusiasm for a second, he will find that I am talking about costs across the board.
      Mr. Smith rose—
      Mr. Duncan Smith: Hold on; I shall give way in a moment. The Minister must acknowledge that the gateway cannot be dealt with in isolation, because a gateway to employment requires jobs to be found on the other side of the gateway for those who would be employed. Perhaps I have missed something, but the Minister is surely not telling us that the gateway is an isolated idea, and that once people are through the gateway, it does not matter whether they get a job because that is an irrelevance. He is not saying that, is he? No. He is not going to intervene on that point, because that is obviously not what he is saying.
      For a gateway to be successful, there must be employment on the other side—not only the current levels of employment, but increasing employment to deal with the numbers of people who are likely to be made available for work. Just under 1 million lone parents will be looking for jobs, as well as many others to whom my hon. Friends and others have referred. It is wrong and, indeed, impossible to consider the gateway in isolation. Before I deal with the particular amendments that we have tabled, I must examine carefully what the Government are doing on the other side of the fence.
      As a result of the windfall tax, the Government imposed a £5.2 billion cost on industry. That money does not come out of thin air: it must be found in some shape or form, and the cost is likely to find its way through to employment. It is estimated by others, including the Confederation of British Industry and the Institute of Directors, that the Government's first Budget cost business £14.25 billion. Their March 1998 Budget placed a further almost £5 billion-worth of costs on business. The national minimum wage is estimated by most people to cost employers an extra £8 billion, and will increase the cost of taking on employees. The working time directive, which the Government are keen on, will cost business an extra £6.65 billion. The European works councils will cost almost an extra £billion, and the parental leave elements will cost £0.11 billion.
      I have probably missed something; there may be other costs that we have not picked up. [Interruption.] Labour Members may laugh, but they have tenure of employment
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      for up to five years. Many people do not have the same security of employment as Labour Members, although I wonder just how secure that employment will be come the next election.
      Those extra costs have a bearing on this matter, because if employers have to pay an extra £39 billion, they will find it more difficult to provide employment on the other side of the gateway. If there is not a serious and increasing number of jobs available, there will be frustration. People will be brought for interview in the hope of obtaining work, only to find that they hit a barrier on the other side of the gateway. They will have the interview, and nothing further will happen. There is no obligation on them to take work, so the people who come forward in the initial stages will be those with a deliberate and keen desire to find work. Hon. Members make the point time and again that people do not want to be left on the shelf.
      My general point is that the Government cannot have it both ways. They want to ape some of what is going on in the United States. They have examined the Wisconsin programme, and other programmes involving people returning to work. In those cases, people are obliged to take work, whoever they are—including lone parents—but the Government have decided that there is a halfway house. Here, people will not be obliged to take work, but will be obliged to undergo interviews as a first step towards taking work. I know about the exclusions, and I shall deal with them shortly.
      It is not possible, however, to copy only part of a scheme; it is necessary to take both sides into account. In the United States, the cost of employing people has been lowered, while here the Government are intent on raising the cost. The Americans recognise that there must be a balance in the equation: they do not see just one side.
      The Minister asked whether we were concerned about the cost of the programme. As I said earlier, we do not have a problem with the programme in principle. The cost that we are concerned about is outside the problem: the direct cost of the Government's decisions from Budget to Budget, as well as from subject to subject.
      Mrs. Gwyneth Dunwoody: Is the hon. Gentleman really telling us that the Opposition have no problem with the idea of people being interviewed, but have a problem with the idea that people will not be forced to take whatever job is offered to them during the interviews?
      Mr. Duncan Smith: That is not what I am talking about. I am saying that the principle follows the jobseeker's allowance principle. As the hon. Lady knows, jobseekers are obliged to take employment if it is there, and this process follows from that. My point is that, over the next few years, the Government will realise that they have not dealt with the second part of the equation. If new jobs are to be created, industry's costs must fall; if they rise, the jobs cannot be created.
      As was pointed out earlier, there are nearly 1 million lone parents out there, a large proportion of whom will want and need work as a result of the Government's present attitudes. Not enough work will be created for those people, let alone all the others involved. My point is very simple: this is a standard equation.
      Mr. James Gray: May I develop the analogy that my hon. Friend used earlier, in order to

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      help the hon. Member for Crewe and Nantwich (Mrs. Dunwoody)? Am I right in thinking that my hon. Friend means that, if a gate is to work properly, it must be well oiled and easy to open? The costs imposed on business mean that firms will employ fewer people, and in particular, the non-wage costs of the working time directive mean that fewer will be employed. There is no point in entering the gateway if it is not possible to emerge on the other side.
      Mr. Duncan Smith: That is essentially what I am saying, but my answer to the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) was quite simple. I shall explain it once more—again, very simply.
      This may represent a clear dividing line between the two sides of the House, but, whether the Government like it or not, if the cost of employing people is raised, there will be no jobs for them. If we do not believe that, and if a division is created between supply and demand, we shall experience the problem that now exists in Euroland, of which the hon. Lady knows only too well. There, the costs and burdens imposed on business have risen dramatically over the past 18 years or so, which has resulted in probably the highest levels of unemployment that various European countries have experienced since before the war. That has happened simply because those countries have not dealt with the equation to which I refer, whereas, by and large, the United States accepts that there are two sides to it.
      The Government are trying to have it both ways. As was said earlier, the Secretary of State for Education and Employment is now talking about "three strikes and you're out". The Government are using lots of big tough language about getting people into work, but—this is the other side—what happens when the costs bite, as they are already beginning to? How many jobs will be created that are not already there, or likely to be there—jobs that are relevant to the legislation, and that the Government appear to expect?
      Mr. Pond: Is the hon. Gentleman aware that, in recent years, countries in what he describes as Euroland have been rather more successful than us in creating employment, and that the previous Conservative Government left a larger proportion of non-pensioner households with no one in work than was the case in any other EU member state? Is he also aware that, in the United States, increases in the minimum wage were associated with growth in employment in those very sectors? Is it not a fact, therefore, that the Government's employment measures will ensure that, when people come through the other side of the gateway, there will be jobs for them?
      5.45 pm
      Mr. Duncan Smith: With respect, I do not know where the hon. Gentleman has been for the past 10 years. If he honestly thinks that employment in Euroland is better than it is here and that its policies have a fantastic effect, why does he think that his Prime Minister goes over there, lecturing all those countries almost weekly—the hon. Gentleman is off-message on the subject—that it is not good enough and that they have to be more like us? The hon. Gentleman has to realise that he cannot have it both ways. I hope that it does not get back to 10 Downing
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      street and to Millbank that he is off-message. I hope that Hansard does not record it correctly because it is just rubbish.
      We have been more successful at creating jobs here because of the pressure to keep costs down. That lid is now blown off. We will find that it becomes more and more difficult.
      Mr. Frank Field: Does not the truth lie between the two points that have been made? Over the past 20 years, this country has been far more successful in creating jobs than Europe, but our Governments have been far more successful in destroying those new jobs. What is significant about the past two years is that we have not had the economic downturn that practically everyone prophesied.
      About 7,000 people are registered unemployed in Birkenhead. We have not recovered from the loss of a shipyard and a steel mill, which occurred under the previous Government after the foolish way in which they managed the exchange rate. However, even in an area of high unemployment, within a single year, more people come on and off the books than, at any point, are a stock of unemployment.
      Given the extraordinary mobility of numbers moving on and off the books, even in an area such as Birkenhead, is not there everything to be said for the Minister's argument that, if we have a proactive welfare service, one of its tasks is to help those who stay longest in the queue, and who find it most difficult to get jobs, to the front of the queue to take some of the jobs that are there—despite what Governments do as they come and go—so that they are not left languishing at the back? That means, of course, that unless there is an increase in the number of jobs available, some people will have to spend slightly longer in the dole queue than they would otherwise have done. But, even if we take that static—
      Mr. Deputy Speaker: Order. I should say to the right hon. Gentleman that the intervention is getting rather long.
      Mr. Field: To bring a long intervention to a conclusion, surely there is a case for having these work-focused, single gateway interviews to help those who have been in the queue the longest to the front of the queue, and to get the jobs that are available.
      Mr. Duncan Smith: I always enjoy listening to the right hon. Gentleman. I recognise that it was a long intervention, but it was very interesting. The first point that he made was about conditions in Europe and Britain. If he looks at the figures over the past 12 years or so, he will find that, by and large, this country has been successful at producing private sector jobs. In the rest of Euroland, the public sector has been the main area of job creation.
      As the right hon. Gentleman knows, if one gets an imbalance, in the way that those other countries have, it creates more and more costs and fewer and fewer private jobs. In essence, that is what has been going on. We can call someone employed but if, in a year's time, that employment falls through and no one else is able to be employed, that is destroying jobs, not making them.

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      On the other general point that the right hon. Gentleman makes about what we should be doing, I said earlier—I hope that he gives us credit for it—that we are not opposed to the principle of bringing people in.
      He will remember that when he was a Minister, in many discussions I agreed that, regardless of whether one agrees with the jobseeker's allowance, interviews are a continuation of implementing the JSA idea, although perhaps by applying fewer strictures than were applied under the JSA regime.
      Opposition Members generally have said that requiring interviews is the right move, and we do not question it. I am simply concerned that the Government should deal with the other side of the equation, which they have not yet done. If they think that they have dealt with it, they are simply sticking their heads in the sand. The types of people described by the right hon. Member for Birkenhead (Mr. Field) will feel endless frustration if they are not able to find work.
      I accept that the current system has some slack in it. Any of our constituents who have seen the many people who should and could be in work, but are not, will be aware of the slack. However, the issue is greater than simply how to deal with that situation. The programme, if it is to be successful, cannot create only frustration. If it starts causing major frustration, we will simply end up with many people trying, in almost every way, to avoid the process—bringing us back to square one, and requiring us to impose major demands and strictures simply to get people to the first interview.
      The right hon. Member for Birkenhead, when he was a Minister, always made the point that people should, ultimately, see the programme in a positive, not a negative light. I agree with that. I am therefore telling the Government that if people are to regard the programme positively, Ministers will have to strike the right balance, which they have not yet done.
      Ministers cannot have it both ways. They may think that as the economy is performing reasonably well, the cost side of the equation is not a problem, but—as hon. Members will have noted—employment costs are rising dramatically. That will cause big problems for the Government. The right hon. Member for Birkenhead mentioned the robustness of the economy. However, I remind Labour Members—whether they like it or not—that the economy is robust as a direct result of the tough decisions taken, over 18 years, by the previous Government. Many countries in Europe have not taken those decisions, and have consequently had problems. That is the point that I was making to the hon. Member for Crewe and Nantwich. The Government cannot have it both ways. If they want to get the programme right, they will have to get both sides of the equation right. If they want people to look for work, they have to accept that they must reduce employment costs.
      Our amendment (a), deleting subsection (4) of the new clause, is intended to complement our other amendments in this group. We tabled them because we believe that the Government's proposals are rather messy, as some of them will apply in different ways at different times, thereby causing problems.
      In amendment No. 87, we propose removing the provisions allowing massive leeway to the people mentioned in clause 49—but who are specified also in
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      Government amendment No. 16. In the Bill, a tremendously large number of people are given dramatic powers to decide who should attend interviews. As the Minister may know—although he did not attend the debate—I made that point to the Secretary of State on Second Reading, saying that I had deep concerns about the provision.
      I have heard all that the Minister has said today on the matter, and I have avidly read the Committee Hansards to discover the Government's intention in clause 49. As I, my hon. Friend the Member for Tiverton and Honiton and other hon. Members have said, the guidelines—particularly subsection 3(c)—are very vague, and we have a problem with them.
      As farmers know very well, gates exist to control the access of sheep, or whatever, from one field into another, and no sheep should get through a closed gate. The problem with the Government's proposals is that they create a gap in the hedge, allowing a way round the gate. My concern is that the Government have no clear idea of how to address the access issue, which requires further consideration. I hope that the Minister will deal with that in his reply.
      Mr. Andrew Smith: I am a little surprised by the hon. Gentleman's analogy of a gap in the hedge. Is he suggesting that too many people who should have an interview will not have one, because advisers are exercising their discretion in allowing them to defer or waive an interview? Or is he concerned—as some other Conservative Members are—that some people will be required, inappropriately, to have an interview? Is it the one or the other?
      Mr. Duncan Smith: It is both—for reasons that I shall explain, and I hope that the Minister will appreciate. The Government are proposing that the discretion should be exercised more widely, from the Secretary of State to
      "(b) a person providing services to the Secretary of State",
      to
      (c) a local authority",
      and now to
      (d) a person providing services to, or authorised to exercise any function of, any such authority".
      In other words, and as the Minister knows, the discretion will be exercised at a very low level.
      I made two points on Second Reading. The first dealt with a scenario in which an official is under pressure because he or she feels that the target—of three or four days—set for them by the Government is very tight, and a senior official is breathing down his or her neck, saying, "You've got to meet your targets. You've got people stacked up and you're beginning to miss the target, which you've got to stick to, as we are obligated to do by the Secretary of State." The official—particularly a local authority official having to take on the new responsibility—may say, as they often do, sometimes for very good reasons, "We need more staff or greater resources. The Government are asking us to do more than we were established to do. We're trying to get this sorted out, but can't do it."
      Mr. Bercow: I should not want my hon. Friend to neglect one other important consideration before

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      proceeding to his next point. Does he agree that the problem of staff overstretch, which he has just described, could in the future be especially acute because of the provision in the new Benefits Agency rules for interviews, in some unspecified circumstances, to last for up to one hour each? Will not that make it that much more difficult to meet the very burdensome targets that are being proposed?
      Mr. Duncan Smith: My hon. Friend again raises a serious issue—which, I am sure he will appreciate, is part of the reason why I am probing the Government on the matter. Officials will have to operate under the constraints that he mentioned, in addition to the three to four-day time limit. We are therefore beginning to discern a series of almost statutory requirements. I say "almost" because, although they may not be written in tablets of stone, the Minister and Secretary of State have described them and they may easily be cited.
      The official may say, "I'm under pressure. I could easily off load these two or three people for a while and give them a bye. I'm fed up with this lot. We'll get on with dealing with the other people. Now, I can declare myself on target. Yet again, politicians don't provide the resources to meet their requirements." I am worried that the Government's proposals will create pressures on officials and, consequently, an unintended hole through which people may pass.
      The second aspect is that people should know whether the provision applies to them. That is of particular relevance to those who are suffering from disabilities or are chronically sick. My hon. Friend the Member for Tiverton and Honiton made an important point. The Minister accepted that he did not have the absolute answers.
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      Mr. Andrew Smith: I did not.
      Mr. Duncan Smith: All right, the right hon. Gentleman has the absolute answers. Perhaps we can hear them. This is the first time that I have heard a politician being rash enough to say that he has the absolute answers, but we now have a new type of politician. Perhaps this is new Labour.
      With no guidance, those who are not sure what the approach to them will be may expect to be brought in because they think that they fit within the categories, but how are they to judge that? Are they to spend their time worrying whether they will be called in? Can they not be given guidance on whether they fit within the categories? That gap creates the problem. The Government may fall into the trap of letting through people who should not be let through because of the total discretion that will be applied at such a low level and causing worry because, as subsection (4) of the new clause says,
      "Regulations under this section may make different provision for different areas or different authorities."
      There will be different approaches throughout the country. Two people sitting next to each other in the same office may take different approaches. That will not be deliberate, but the gap is a problem. We have tabled our amendments in an attempt to get the Government to face up to the situation and promise to come forward with a clearer picture of the categories. I recognise that they
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      cannot give a comprehensive list, but officials at whatever level should know who is most likely to fit in certain categories and who is less likely to need to come in at certain stages.
      The discretion and the huge variations that it will cause will lead to problems of uncertainty. The vulnerable will be worried and those who are bent on avoiding the issue may find ways to do so—through the gap in the hedge.
      Mrs. Lait: Does my hon. Friend accept that there is a further complication? Most people do not comprehend 100 per cent. of what they are told, particularly when it affects them directly. Medical evidence shows that people usually comprehend only about 10 per cent. Does my hon. Friend agree that the low level of comprehension of what officials tell those who are interviewed will create a further huge area of potential disagreement and argument that would add to the problems of the lack of guidance from the Government on who is eligible?
      Mr. Duncan Smith: I am grateful to my hon. Friend because she has gone to the heart of the issue. The problem is for the Government. I see Labour Back Benchers shaking their heads. I know that they are used to accepting absolutely everything that the Government say. We were in government once and many of us were Government Back Benchers. Sometimes, we used to accept as absolute what the Government told us—[HON. MEMBERS: "Not you."] Well, maybe not, but many did. As many now accept, that all-seeing Government often got it wrong. The new Government do not believe that they get anything wrong, but such arrogance has to be probed.
      Mr. Andy King: Will the hon. Gentleman accept that that is why we are establishing pilots? One is being established in my Warwickshire constituency on 28 June. It will be based in the town hall, with a team of people from across the three agencies. They are currently being trained to deal with people sensitively. That is not arrogance. The Government are moving forward in a way that will give people hope. Why cannot Conservative Members accept that we are giving a good deal to unemployed people?
      Mr. Duncan Smith: I hear the hon. Gentleman and I hope that the Government do as well. However, the hon. Gentleman has missed the point. He accepts that the Government are all-seeing and will be able to establish what they want. I have visited some of the pilots and talked to the officials. Many of them have expressed the same concerns—which I hope they have expressed to the hon. Gentleman—about resourcing, pressure of work and numbers coming through. They are not panicking, but they are worried. Of course they are positive about the programme. Officials want to do what the Government ask of them properly. That is what they are there for and they should be applauded for that. My point is not that they should not be positive—they are invariably positive—but that we should not try to use and abuse that positive attitude and ignore the problems and pressures. With such discretion, the problems may become nightmares in due course, because different officers, even those working next to each other, may take differing views. Who is to check?
      Why not give clearer guidelines for the pilot programmes? Instead of seeing whether it hurts, why not see whether it works? With more clearly defined

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      categories, it will be easier to decide whether the system works. That is a positive way to deal with the issue. With respect to the hon. Member for Rugby and Kenilworth (Mr. King), whom I saw shaking his head earlier, I hope that, in the spirit of constructive debate, he will accept that our points in amendment No. 87 are relevant.
      Amendments Nos. 89 and 90, which would delete the words "designated authority", are part of the same argument about too much variation and too little clarity. The Government must recognise that if there is no clarity, the gap will result in worry and concern, while some of the more defrauding element and those whose intents are not wholly positive or good will deliberately break the system.
      Unless the Government come up with serious answers or are prepared to accept our arguments, we shall vote on the issue. They have failed to recognise their obligation to lower costs while making a gateway, the need to resolve the confusion, the need for clarity and the importance of not allowing differences of attitude or behaviour to resonate throughout the system, creating problems for the most vulnerable. The Government still have much to sort out.
      Mr. Rendel: I am slightly sorry to have to oppose some of what the Tories have said, because there has been agreement between us on many of their amendments and ours. However, I do not accept their amendments in this group. Amendment (a) to new clause 10 would restrict the right of local areas to take decisions in their own way. There may be good reasons why some areas do not want to go along with what happens elsewhere. It has been a long-standing principle of the Liberal Democrats that we would like local authorities to be given, as far as possible, the widest chance to take their own decisions in their own way where there are regional differences that may make that appropriate.
      In the amendments, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) is restricting the opportunities for specific cases to be exempted from the gateway. That would run entirely contrary to many of the amendments that I tabled in Committee, in which I sought to ameliorate some of the potentially unfortunate effects of the single gateway by ensuring that there were widespread exemptions from the difficulties that otherwise might be imposed on someone seeking benefits.
      I cannot go along with the Conservative amendments in this case, and it seems that the new clause will be acceptable. Having said that, it is worth bringing to people's attention, as we did in Committee, some of the problems that the Minister has not addressed properly. Everybody would accept that there are good reasons for doing our utmost to make sure that people who want work—whether they are single parents or people with disabilities who may have had trouble getting work in the past—are given the opportunity to get work.
      The difficulty with the single gateway is not that people are not being given the opportunity to get into work—that is widely accepted—but simply what will happen if they do not attend the interview, and whether that carries certain implications in terms of their benefits. The Government's consistent answer is that, as the interview is for the benefit of the individual, why should he or she not want to come? They say that they are trying to avoid fraudulent reasons for not attending interviews.
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      I quite accept that there are good reasons for doing our utmost to avoid any fraudulent use of the benefits system—we wish to avoid and counter fraud just as much as anyone else—but I still believe that there may be cases where people do not attend interviews for good reasons, which may not be clear to the authorities. It was to avoid that situation that we tabled a number of amendments in Committee, and I am sorry to say that the Government would not accept them.
      The Government have not properly answered the question on the problems that may arise when somebody does not come to an interview for what may be, to them, good reasons—reasons which, if most of us knew them, we might accept as good reasons. However, those reasons may not necessarily be known to the authorities, who then impose some form of cut in benefits or refuse to allow benefits to start for people who do not come to the interview. The Government have still not answered that properly.

      By forcing people to come to interviews by imposing certain sanctions if they do not, the Government are forcing people to do something that is for their own benefit. If it is for their own benefit, surely the Government ought to be able to persuade people of that. If they cannot, it is odd that they should take powers to force somebody—by imposing, or by threatening to impose, benefit sanctions—to do something that is supposedly for their own benefit.
      Unless the Government can be sure that there will be no case in which someone, very properly, does not go to the interview for a good reason that the Government fail to recognise as such, there will still be queries about the single gateway. I do not feel that the Government have allowed for sufficient exemptions. However, the new clause, without the proposed Conservative amendments, will go at least some way towards what I am asking for. Therefore, we support it.
      6.15 pm
      Mr. Burns: As my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) said, the single work-focused gateway is to be welcomed in principle. In no way do I part company from him on that. I agree also with the hon. Member for Newbury (Mr. Rendel) that any sane person would wish to give the maximum opportunity to those who are not in work to find it.
      It is a myth that a disproportionate amount of people who cannot find work are, to use the jargon, scroungers or loafers. They are not—they desperately want to get work to enhance the quality of their lives and to provide for themselves and their families. Given the economic cycle and certain educational circumstances, some need to be assisted to do that.
      I shall focus on those suffering from mental illness. I was perplexed by the Minister's comment that he and the Government were consulting the different disability groups and lobby organisations. As I have said, there is a great difference between listening and acting upon what they have heard, and I am concerned about how carefully the Government have listened. The Minister said that the National Schizophrenia Fellowship fully supported what the Government were doing, and said that it was operating a pilot scheme for the Government.
      Mr. Andrew Smith: It is possible that the hon. Gentleman has misunderstood or misheard me. I said that

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      the National Schizophrenia Fellowship was participating in a pilot scheme for the new deal for disabled people, and that there would be lessons to be learned from that in terms of the advice that we give to people. I did not say that the fellowship fully supported everything that the Government were doing.
      Mr. Burns: The Minister will have to read Hansard in the morning, or perhaps his private secretary will read the galley proofs before Hansard is published. I distinctly heard him say that the NSF supported what the Government were doing. He then went on to say what he has just repeated about the pilot scheme. Yet the briefing from the NSF to Members of Parliament for today's debate states categorically:
      "We believe that people with severe mental illness should be exempted from compulsory work-focused interviews."
      That is clear. There are no grounds for misinterpretation, or for arguing another case. That rather contradicts the impression given by the Minister, and it certainly contradicts the sycophantic intervention from the hon. Member for Gravesham (Mr. Pond). I know that there may be a Government reshuffle, but any sycophant must have an element of self-respect.
      Mr. Duncan Smith: No!
      Mr. Burns: My hon. Friend may be right, and that fact may not enhance the chances of the hon. Member for Gravesham—although, no doubt, he will be a gift to the Whips, who will need people to do the Government's business in future.
      The NSF carried out a survey last year of 660 people suffering from mental illness, and asked about their benefits and the Government's review of the welfare system. The findings are relevant to the comments of a number of my hon. Friends both today and in Committee. The mental health of 55 per cent. of people with schizophrenia and 60 per cent. of those with depression had worsened as a result of the Government's review, according to the survey. One in three people had debts, the majority of which were unpaid electricity, heating and telephone bills. More than half the people in receipt of disability living allowance used the money to pay for food, clothes and bills, so the benefit subsidised their basic necessities. The majority of people who took part in the survey felt that their mental health problems prevented them from working.
      The NSF says:
      "As it stands, the Bill would prevent thousands of people with a severe mental illness accessing the financial support that they require to regain and sustain their mental health. Worse than this, some of the changes will actually create additional barriers and stress which will increase the likelihood of a relapse."
      I urge the Minister to think again. I understand, because of the neatness of his mind and the need to legislate, why he does not want to make too many—if any—exemptions to the broad thrust of the policy, which might allow a coach and horses to be driven through the Government's ultimate aim, but there are certain groups of people who, through no fault of their own, are incapable, because of their mental state, of coping with a system that has been proposed for what I accept are understandable reasons.
      We should consider whether we should make exceptions in certain limited circumstances. I do not think that that would open the floodgates for every special
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      interest group to make a demand. There is an overwhelming case for not putting any additional burden on people who suffer from mental illness.
      The NSF says that clause 49, which is affected by new clause 10 and the subsidiary amendments, will cause problems because people may be persuaded into seeking jobs that they are not ready to take, and that the stressful nature of the interview itself may cause irreparable medical harm and cause relapses among those who have begun on the road to recovery.
      Mr. Gray: Does my hon. Friend agree that the question of who should be exempt from the interviews need not be a value judgment such as he is describing but could be determined according to whether the people's benefits themselves are dependent on the fact that they are not able to work? People on severe disablement allowance and incapacity benefit would then automatically be exempt.
      Mr. Burns: That is an interesting point, and I hope that the Government will consider it.
      What I am about to say is in no way a criticism of those who will carry out the interviews. As the Minister rightly said, they will be given first-class training to make them as well equipped to carry out their work as is humanly possible. Sadly, there is a stigma attached to those with mental illnesses, and a lack of understanding of the problems that they experience and the way in which they respond to circumstances and challenges. However well trained people are, the interviews will be carried out across the whole range of society, and I fear that there could be problems because, through no fault of their own, not all staff at all times will be able to live up to the highest standards of their training.
      Some individuals may be so unwell that, as well as being unable to attend, they are unaware of the impending interview. The Minister sought to allay those fears, and to some extent I have been reassured by what he said on that narrow issue. There will always be the fear, before, during and after the interview, that people with mental illnesses may lose their benefits because they have not been able to answer the questions or cope with the interview properly. The increased tension and concern could contribute to a relapse.
      We should not duck the issue that, because of their condition, some people who are called for interview will not understand at all what it is about. They will be totally confused both in the run-up and during the interview itself. Given all those circumstances, I wonder why the Government are not prepared to reconsider.
      I asked about schizophrenics or others with mental illness who have a history of, or may be prone to, violence, especially if they are tense or under pressure. That could cause grave problems to the individual concerned and, equally importantly, to the officials and staff involved in the interviews or other parts of the process.
      I am bewildered about why the Government are not prepared to budge on what is a very sensitive issue. They certainly say that they want to handle the matter sensitively, and I do not doubt their sincerity, but that is not enough: they should be prepared to think again.
      Mr. McWalter: If we gain an assurance that there will be an explicit input from the medical profession,

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      with support and advice intimately associated with the process, so that those being interviewed can see clearly that the difficulties associated with their mental condition, especially if it is a fluctuating condition, will be fully taken into account, would that not settle many of the hon. Gentleman's doubts?
      Mr. Burns: I am not convinced that it would, although it might settle some of them. The hon. Gentleman's suggestion has merit, and should be considered further, but I fear that it might cover fewer people than he imagines. There is still a great lack of understanding of problems and treatment patterns. The medical opinion on a person could be wrong or could not be relevant at the time. The suggestion would not be a catch-all way of allaying all fears. The Government should consider it, but I do not think that it would be helpful in all that many cases.
      Mrs. Browning: The intervention by the hon. Member for Hemel Hempstead (Mr. McWalter) and the Minister's comments earlier both referred to the point that medical evidence would show whether an interview would be inappropriate. However, officials would have to obtain the permission of the person concerned before accessing those medical records. While that lengthy process was going on, the person would be aware that an interview was pending and that could cause them stress.
      6.30 pm
      Mr. Burns: That is a powerful and important point. Another issue is the civil liberties aspect, given that the medical history of individuals is not normally made available to officials of the Benefits Agency or the Employment Service. The Government should consider that point carefully, because such an approach could cause more problems and complications than the suggestion by the hon. Member for Hemel Hempstead (Mr. McWalter).
      Mrs. Lait: I agree with everything that my hon. Friend has said. Does he agree that some people with fluctuating mental conditions could perform ably at an interview, but, by the time they were fed through the system and went to see an employer, they might have relapsed? That could cause problems and tensions between the Benefits Agency and the employer.
      Mr. Burns: That is a relevant and interesting point, and my hon. Friend is right.
      Mr. Pickles: Does my hon. Friend agree that it would make more sense that the person performing the interview should undergo a personal capacity assessment? The Government's proposals contain no such requirement and they resisted amendments in Committee to include it.
      Mr. Burns: My hon. Friend makes a pertinent point. I fear that the Minister will not be able to answer that point because he was not listening to my hon. Friend. He will be able to read the intervention in Hansard tomorrow and, I hope, will accept the point.
      No one disputes that the ethos behind the Bill is twofold. First, it is to encourage people into work or back into work. Secondly, it is to make savings in the welfare budget.
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      However, the Minister's resistance to giving serious consideration to exemptions to those suffering from severe mental illness contains an irony. Have Ministers considered that, if they force an individual suffering a mental illness to an interview and he or she suffers a relapse, that could cost the state far more in treatment than might be saved by forcing him or her to an interview? It is a supreme irony that what is a cost-cutting, money-saving, Treasury-driven Bill could, in this narrow instance—the Bill may contain other examples—have the opposite effect and cost the state more than it would save.
      The Minister has been reasonable in this debate, although he has not budged an inch. I urge him to listen to all the contributions, from Conservative, Labour and Liberal Democrat Members, and, on reflection, to think again. If he continues on his current course, the Government will bitterly regret it when it becomes apparent how much suffering the Bill will cause to a section of the community who deserve our help instead of the burdens, worries and confusion being placed on their shoulders.
      Mrs. Dunwoody: I wish to ask a few questions of my right hon. Friend the Minister. Who will be asked to give evidence about the state of mind of a person who is to be brought to an interview? At the moment, it is mostly the Department's own doctors who are required to give evidence on physical disability. Will the support of a general practitioner not be regarded as sufficient evidence that an applicant is not fit to be interviewed?
      I am also worried about the calm assumption that those who suffer from some form of mental illness can be easily and rapidly clinically diagnosed. That is not my experience. Especially in cases of recurring clinical depression, people's mental states fluctuate so widely that they can be capable of being coherent at an interview and within a short time become incapable even of being summoned to an interview. I dealt recently with a case in which the mere announcement that a meeting was to be held six weeks later to examine an applicant's case history in detail reduced the person in question to a state that required considerable medical assistance.
      Another difficulty is that some general practitioners ask for extra money if asked to provide any form of certification. They feel, with some justification, that they are doing the work of the Department and they see no reason to expand their existing responsibilities.
      I hope that my right hon. Friend the Minister has considered those points and will be able to provide a coherent answer, because to insist on a particular machinery to achieve a result without having thought about the implications for those who could be damaged by it is not an advance—it is a retreat. Many of the objections that have been raised may be artificial and unnecessary, but by the time we find out, people could already have been damaged. That is not, I believe, the intention of the Bill or of Ministers, but they must be prepared to think of the answers before, not after, the situation deteriorates.
      Mrs. Browning: I declare two unremunerated posts, one as vice-president of the Alzheimer's Disease Society and the other as specialist councillor on the national council of the National Autistic Society. The speeches we have heard so far have raised genuine concerns. I am

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      aware of the problems people have with identifying, within the general framework of legislation, separate groups of people with disabilities. However, by the same token, if legislation contains no recognition of its impact on groups such as those we have been talking about tonight—especially those with mental health problems, including a group I am closely involved with: those with developmental disorders—it becomes a case of using a sledgehammer to crack a nut.
      I repeat to the Minister something that my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) said. Talking about the interviews that people would be required to attend, he asked, "Why wait and see whether it hurts?" Ministers have a duty of care not to introduce legislation when they are unsure whether the process that they are introducing by statute will cause hurt to certain identifiable groups. There is enough knowledge about mental health, especially schizophrenia—as was so ably argued by my hon. Friend the Member for West Chelmsford (Mr. Burns)—and many developmental disorders, to make it possible to predict today that there will be hurt if those groups are subject to the process that the Minister proposes.
      The Minister said that he was surprised by my earlier intervention, because he felt that I had an integrationist approach to employment opportunities for people with disabilities. He is absolutely right, but that does not mean that I do not recognise that although, for those two specific groupings, integration is to be achieved if possible, the process whereby it is achieved is absolutely key to whether integration is a good thing or hurtful and harmful.
      It has been said that some people's response would depend on the day on which they were invited for interview. Much has been said about mental health problems—specifically, schizophrenia—with which I entirely agree, and I endorse what has been said. I shall not develop that further. I want to explore in more depth what happens when people with developmental disorders are interviewed.
      The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) spoke of the impact on a person who was given six weeks' notice to attend an interview. If something suddenly happens to a person within the autistic spectrum disorder grouping that is not part of their usual routine, the magnitude of the distress that they suffer is very different from that suffered by someone with a physical disability.
      I want to draw a distinction. In my constituency, I know of some young people with cerebral palsy who are well qualified and deserve to be in employment for 101 reasons. I would wholeheartedly support a process that would enable them to get into work tomorrow as a result of attending an interview. However, although some people with autistic spectrum disorders have the potential to obtain employment, to be realistic—this is not being unkind to them—they are very few. For many, setting them up to fail—which is what we are contemplating—compounds their distress, and compounds their feelings about themselves and the rest of the world.
      The Under-Secretary of State for Education and Employment, the hon. Member for Barking (Ms Hodge), attended last week's launch of autism awareness week in the House, and we were very grateful to her for doing so, but we still feel that we have to work hard to promote
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      understanding of autism. Many social workers and GPs do not understand the autistic spectrum at all. We are working very hard to fill that gap. I am very worried that the people who will carry out the interview process—and whom my hon. Friend the Member for Chingford and Woodford Green mentioned—would have great difficulty in distinguishing, on paper, which people with autism would be ideal candidates to bring in for interview.
      Mrs. Lait: I realise that my hon. Friend is a true expert on autism. Will she perhaps describe the reaction of some autistic people when their routine is disturbed, and say how badly such a disturbance affects them?
      Mrs. Browning: For the purposes of the debate, I am assuming that those people with autism who are in full-time residential care would not come within the remit of the policy. I am talking about those in the community. Some may be living independently; some may have supported living arrangements. The vast majority of adults in this category would be living with relatives. They are all different. Although certain common features might typify the response of a person with autism, every response will be different.
      Many people with autism, faced with an interview, would do a runner. They would disappear for the day, and would not turn up even if they knew that someone was going to accompany them. Others would simply put the letter in the bin, and it is possible that no one else involved in their case would even know that they had been called for interview. As the Benefits Agency knows, it is not untypical for many of those adults who now receive communications from the Benefits Agency to bin any piece of paper that they find confusing. In their eyes, the problem is solved. They are not looking at it; they need not deal with it any more. Obviously, that is not an ideal way of dealing with the matter.
      6.45 pm
      The Minister said that, in many cases, the interviewer would visit the person's home. The presence of a stranger who has come to talk to a person with autism, and to ask them questions in their own home, could be met with a range of reactions, no matter how experienced the interviewer was. It would not be untypical for an adult with autism to sit with their face to the wall during the interview, instead of looking at the person asking the questions. It is very important to emphasise—because this is what distinguishes autism—that I am not talking about people with a below average IQ. In autism and other conditions, such as Down's syndrome, there is often a high IQ. It is not that people do not have verbal skills. Some have very good verbal skills, but would resist using them and engaging in conversation in a stressful situation, such as an interview.
      Another possible reaction is over-anxiety to please. The person would try to second-guess the interviewer, and try to give the answer that he or she felt that the interviewer wanted. It is very difficult for someone with autism to imagine a situation that is not within their personal experience so, when asked the straightforward question "What sort of work would you like?" it is not unknown for the person with autism to say, "I would like to be an astronaut." Such a case has been recorded. Such a response does not mean that the person is of low IQ; it is

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      simply that they may have seen a film that tells them what an astronaut does. They have understood it, and they have understood it sufficiently to give that answer. I do not know how many vacancies there are for astronauts, but that is not an untypical answer.
      Unless interviewers have a great deal of experience, not just of interviewing, but of asking questions in a specific way, they will not receive a useful answer. The question "How do you feel about this?" is very difficult for a person who cannot conceptualise an answer. It is not simply a case of asking questions in a gentle or non-pressurised way; the work is very specialised.
      In the previous Parliament, when I was Parliamentary Private Secretary at the Department of Employment, I took part, with the then Secretary of State, now Lord Hunt, in a pilot scheme co-funded by the Department of Employment—the supported employment scheme in London for people on the higher functioning end of the autistic spectrum. There was some success. I am not saying that no one on the autistic spectrum is capable of employment. I am simply telling the Minister that autism is different from any other developmental disorder.
      In order to get people with autism into employment and in order for that employment to work—which is the key, as has been said—what happens when they have passed through the gateway is crucial. The people conducting the job interview need coaching. Someone must be present during the interview to be with the person being asked the questions. Once the person is in an appropriate job, they will need someone there to support them—not to do the job, because some people with autism have university degrees and can hold down very high level jobs. I know of several who have worked in the civil service. What I am saying is that someone will need to be in the workplace to sort out communications with other people there. That is invariably the challenge at work for people with autism.
      There is a way around that problem if the Minister recognises not that some groups should be excluded from the opportunity to get into employment, but that a different approach would be the answer. Even if it worked in only one case in a hundred, that would be worth while. I am convinced that the top-down approach of the proposed structure and the compulsoriness of the interviews will make it less likely that more people with autism will become employed.
      Although there has been much welcome emphasis and recognition of autistic spectral disorders among children over the past 10 years, a gap remains in recognition among adults. Adults, often living at home with parents, may be undiagnosed until long after childhood. Some may qualify for benefits such as severe disablement benefit. The Minister has talked of flexibility, and the Government must ensure that conditions misdiagnosed, or not diagnosed at all, are recognised in the benefits system through the gateway.
      For an adult who has never worked, a situation affecting many, the simple physical discipline of holding down a full-time job can be difficult. Has the Minister considered such people? If they were successfully interviewed and it was thought that supported help could be given, the best first stage might not be a paid job, but a process of working towards paid employment through
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      voluntary work. That would certainly mean supported help; we cannot send people with autism out into the wide world. Many would have difficulty in finding their way to the benefits office for the interview on their own and on public transport. Such problems compound their difficulties with getting into work.
      As a former Minister, I fully understand why Ministers are reluctant to make exceptions on the face of a Bill. However, the Minister has an excellent opportunity tonight to reconsider, on the basis of the information that he has heard about specific groups for whom the scheme could have a detrimental outcome despite its overall good intentions. He could consider how to adapt his scheme to accommodate people such as those with either developed mental disorders or mental health problems.
      Those two groups are not, of course, exclusive. One difficulty that faces people with developed mental disorders is that they often have mental health problems on top of the disorders as they become adults. The nature of their conditions may lead to difficulties in adapting to adult life. This is a complex area, especially for those without specialist knowledge who will be asked to make judgments about whether the person sitting in front of them is behaving or reacting as he or she is because he or she has a developed mental disorder or an overlying mental health problem. In adulthood, the two often go together. Considerable expertise is required to unravel the suitable way to take such people forward.
      Dr. Lynne Jones: This morning, I had the pleasure of a visit to Sandwell to see the pilot scheme for the new deal for disabled people. Despite the coincidence of its occurring today, the visit had been fixed up some time ago, and I met a group of people highly committed to helping disabled people not only to get back to work but to make progress towards a life in which they can feel they participate in the community. I had a strong feeling that they were doing an excellent job under the current arrangements, and I urge my Front-Bench colleagues who are devising schemes for the new gateway to listen to the experience of those people.
      I was told that about 4,000 letters had been sent out, and around 400 phone calls came back. Those who sent the letters were at pains to ensure that there was no mention of any Government Department. The logo refers only to the new deal. For disabled people, receiving a letter from a Department is distressing and stressful. Many phone calls came from people who said, "Thank you very much for writing, and the scheme sounds very interesting. If only it had been available 10 years ago, it might have been useful to me, but I do not think that I am able to participate now."
      The people who have responded did so voluntarily, and they are receiving an excellent service. Even so, interviewing people with disabilities such as mental health problems is stressful for staff. I asked one of the team, an occupational psychologist, what her work was. Most of it, she said, was in assisting the team dealing with disabled people. Sometimes it can be extremely stressful if a person who suffers a mental illness needs a lot of time.
      I am concerned that we could, if we are not careful, throw out the baby with the bath water in this new scheme. If teams who interview people have to spend much of their time on enforcement rather than offering a

      693
      good service, the scheme could prove counter-productive. I believe that Ministers are well aware of that fact, and they have talked to the team that I met and to people who have experience on the ground.
      A briefing sent to Labour Members in 1995 pointed out the insecurity that compulsion causes among disabled people. It said that changes from invalidity benefit to incapacity benefit meant
      "more insecurity—both for existing claimants who might become ineligible for any benefit, and for anyone concerned about their long term security should they fall ill."
      It referred also to the difficulty of having one test intended to cope with complex disabilities, particularly mental health disabilities. My Front-Bench colleagues are aware of those issues.
      I shall vote with the Government tonight, largely because of the answer that I received to a recent parliamentary question about compulsion. My hon. Friend the Minister of State, Department of Social Security wrote that the requirement for compulsion
      "will initially affect only the 12 Single Work-Focused Gateway pilot areas and will be introduced in ways that take account of individual circumstances. The evaluation of the pilots will enable us to consider whether to extend this approach more widely."—[Official Report, 31 March 1999;Vol. 328,c.840.]
      The Government are aware of the pitfalls and they will go about the process carefully. In so doing, I urge them to listen to the staff who will have to implement their policies and ensure that they are comfortable with having to implement whatever element of compulsion is eventually decided upon.
      7 pm
      Mr. Andrew Smith: We have had a wide-ranging debate. At one point, I wondered whether some Conservative Members were trying to spin it out a little, but that would have been an unworthy thought.
      The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) spoke for a long time about matters that were tangential to the gateway, but which are none the less important to the economy and, as he said, to the supply of jobs. He did not mention the fact that we now have record levels of employment and, what is more, record levels of vacancies for this stage of the economic cycle. He referred to vacancies, however, and should accept that their number is not totally unrelated to the tough decisions that this Government took in their early months in office—the fact that we made Bank of England operations independent, got the public finances under control, invested wisely in public services and set about raising training and education standards and introducing initiatives such as the new deal. All those have helped to get record numbers into employment.
      Therefore, the House will take with a large pinch of salt the hon. Gentleman's propaganda that somehow there cannot be any jobs out there or that we are damaging prospects for people on the other side of the gateway. Nothing could be further from the truth.
      After all that, we heard that the hon. Member for Chingford and Woodford Green not only supports the single work-focused gateway in principle, but concedes that it does not impose burdens on business. As for his attempted arguments about variation in the Bill and his worry that regulations would apply differently in some areas from others, let me assure him that the only reason
      694
      for that variation between local authorities, which the Opposition amendment would strike out of the Bill, is to operate the single work-focused gateway in the pilot areas without imposing the same requirements on the rest of the country. That is plain common sense for any initiative that is being piloted. It is absurd for the hon. Gentleman to claim that that variation should be struck out of the Bill.
      The hon. Gentleman also went on about the fact that variations between areas would allow greater discretion in some—it was difficult to follow his argument—but that is not the case. There is consistency throughout the pilots. Amendments Nos. 88 to 90 would not deal with that problem, but would merely cut local authorities out of the single gateway, which would be contrary to its central purpose and to the principle that the hon. Gentleman said he supported.
      Mr. Duncan Smith: I do not intend to delay the right hon. Gentleman, but in answer to my arguments all that he has offered so far is that he can assure me—just as he assured my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) in Committee. That does not rub. When individuals are taking decisions and, therefore, varying their decisions on the ground, how much notice will they take of the right hon. Gentleman's assurances? They will have no idea what they mean—they do not mean anything, other than what he thought at the time.
      Mr. Smith: The Bill means what the Bill means and the amendments and the new clause mean what they mean. In attempting to strike out the different provision in some local authority areas, the hon. Gentleman is either asking us not to run the pilots in a number of pilot areas, or he is saying that it somehow makes sense for every local authority member of staff who is operating the single gateway interviews or registration and orientation to refer on to the Employment Service, the Benefits Agency or the Secretary of State. The hon. Gentleman would erect a great mountain of bureaucracy and rigidity around the operation of the single work-focused gateway, which would make it respond less flexibly, sensitively and efficiently to the needs of clients. Therefore, we can dismiss those arguments.
      The hon. Member for Newbury (Mr. Rendel) spoke cogently about why the Conservative amendments did not make sense and why new clause 10 did, so I thank him for his support. However, I cannot go along with his arguments, which amounted to saying that we should simply make the gateway voluntary. Of course, many people would volunteer to take part, but it shows extraordinary naivety about how some people approach the benefits system if he imagines that one could simply leave it to that voluntary principle. Apart from anything else, claimants themselves would not see it as fair and neither would it be so.
      In the Bill, we are effecting a shift of culture—we believe that it is reasonable to do so—so that having an interview will become a normally accepted part of making a claim on the benefits system. The majority of the British public will think that eminently reasonable. Many of them would be staggered if they knew that so many people access the benefits system at the moment without an interview. Most people would see this as a straightforward, reasonable and commonsense measure, which indeed it is.

      695
      I listened carefully to the hon. Member for West Chelmsford (Mr. Burns), who argued with great feeling about the difficulties facing people who suffer from mental illness and schizophrenia. I wholly share his views and those of his hon. Friends, including the hon. Member for Tiverton and Honiton (Mrs. Browning), who spoke on the same subject. Of course, we must be sensitive to the needs of disabled people and those suffering from schizophrenia. The difference between the hon. Members and me is that the Conservative amendment suggests that we can sensibly enshrine exceptions in regulations. The consequences of the amendments would be less flexibility and less ability to respond to individual need. If Conservative Members honestly believe that more regulation—the top-down approach, which the hon. Member for Tiverton and Honiton said that she did not want—is the right way to deal with a situation that calls for such professional sensitivity, they are the ones who need to think again.
      Mr. Burns: If the right hon. Gentleman accepts the argument and agrees with it, but feels that the amendments are defective and would not achieve the aim, surely he could table his own amendments or, if that is not procedurally possible at this stage, do it through guidelines.
      Mr. Smith: If we felt that the Bill needed an amendment, we would have tabled one. The way to get a responsive, flexible and sensitive system is not to attempt rigidly to define exceptions in regulations; it is to offer proper training and sensible and sensitive guidance to those who are working at the front line, and that is what we are doing.
      The bodies that are advising us on the training of personal advisers include not only the Royal National Institute for the Blind and the Royal National Institute for Deaf People but the Mental Health Foundation. Of course, we will take close note of what they say. Like the hon. Gentleman, I have a high regard for the National Schizophrenia Fellowship and other similar bodies that have made representations on the subject. I can assure him and the House that I will make it my business to speak further with those organisations on the way in which guidance is given to front-line staff. We want the legislation to help vulnerable people and not to form some sort of barrier that could worsen their medical condition.
      Mrs. Browning: Will the Minister agree to take advice from the National Autistic Society as well?
      Mr. Smith: Yes, I will.
      Mrs. May: The Minister talked about responsiveness and sensitivity. He said earlier that if in the middle of an interview, it became clear that the interviewee was overstressed, the interview would be stopped. For some people, including those in the groups mentioned by my hon. Friends the Members for West Chelmsford (Mr. Burns) and for Tiverton and Honiton (Mrs. Browning) and by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), the stress of attending the interview, having it stopped and being shown the door could be devastating. What support will be available to such people in that situation? What
      696
      training will personal advisers be given to deal with such circumstances? He said that the individual needs of the interviewee will be taken into account, but the extent to which that is possible will depend on the length of interviews. What targets will personal advisers be set for the number of interviews that they have to hold?
      Mr. Smith: Training for personal advisers and front-line staff will go through all the difficult situations that we can possibly anticipate. We are being guided in this not only by expert opinion in the Department for Education and Employment and Department of Social Security, and by the considerable expertise of staff in the Benefits Agency and the Employment Service in catering for the needs of clients with difficulties, but by outside expertise and recommendations based on that. If the hon. Lady wants to suggest further bodies with evidence, views or experience that we should consider, we will be pleased to hear from them.
      It has been said that it could be stressful for people to get a letter or have an interview but it is not as though people do not encounter that in the present system. An advantage of the single work-focused gateway is that it involves a personal adviser who will have had more training and experience and who will act as a constant point of support. At present, when people with mental illness or other problems inquire about their benefit, they talk to several different people. The new system will offer a constancy of personal support that Opposition Members should recognise as a positive gain over the anonymous, fragmented methods of the past.
      My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) asked who would give evidence of state of mind. We do not expect or require people to turn up with or send medical certificates in respect of why they cannot turn up. A judgment must be made by the personal adviser. Account will be taken of medical evidence where it is supplied, but let us not forget that for most people who claim sickness and incapacity benefits, medical evidence is already supplied.
      We will have to allow for fluctuating conditions. As my hon. Friend the Member for Crewe and Nantwich said, some people will be sufficiently stable to arrange an appointment at the registration and orientation stage, but will be not be up to attending the interview or will attend, but not be capable of rational participation. In such cases, we expect benefit to go into payment and not be suspended until an interview can be undertaken.
      7.15 pm
      Mrs. Dunwoody: My right hon. Friend said that training will be given to civil servants to deal with those problems. Well-trained young social workers have been asked to undertake interviews at home. In one case, a young woman was killed. Will he be careful before sending civil servants into situations of personal risk?
      Mr. Smith: Indeed we shall. I assure the House that close attention is being given to security in the design, organisation and delivery of pilots. That is particularly important where people visit other people's homes or go outside the normal interview location. Equally, security must be a prime consideration in offices in the interests not only of staff, but of other clients.
      We are talking about pilots. As far as possible, we want interviews to take place in a much more welcoming environment than that which characterises many Benefits

      697
      Agency offices. All the experience in the Employment Service since jobcentres started operating in an unscreened environment is that it reduces aggression and tension and the number of incidents. Working in an unscreened environment in the single work-focused gateway requires good security arrangements. I am making it my business to ensure that they are in place so that there is a better experience for all concerned.
      I thank my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones) for her remarks. She spoke warmly of the new deal for disabled people pilot that she visited. I echo her commendation of the energy, commitment and sensitivity of staff in the pilots. Not only are we listening to them now, but as we put the single work-focused gateway into operation, we will continue to listen to that experience as we carry the pilots forward.
      We have heard no good reasons for accepting the Opposition's amendments. I imagine that they were intended to allow a debate, but they would seriously damage the flexibility, sensitivity and effectiveness of the single work-focused gateway. They should be withdrawn or voted down because the single work-focused gateway, as provided for in the Bill, is the way to provide the quality, sensitivity and responsiveness in the access point to the benefit system that the country has needed for a long time. I guarantee that when the pilots start on 28 June, the system will give a much better service to claimants.
      Question put and agreed to.
      Clause read a Second time.
      Amendment proposed to the proposed new clause: (a), Leave out lines 22 and 23.—[Mr. Duncan Smith.]
      Question put, That the amendment be made:—
      The House divided: Ayes 133, Noes 409.

      Division No. 178]

      [7 pm

      AYES

      Amess, David

      Duncan, Alan

      Arbuthnot, Rt Hon James

      Duncan Smith, Iain

      Atkinson, Peter (Hexham)

      Emery, Rt Hon Sir Peter

      Beggs, Roy

      Evans, Nigel

      Bercow, John

      Faber, David

      Beresford, Sir Paul

      Fabricant, Michael

      Blunt, Crispin

      Fallon, Michael

      Body, Sir Richard

      Forsythe, Clifford

      Boswell, Tim

      Forth, Rt Hon Eric

      Bottomley, Peter (Worthing W)

      Fowler, Rt Hon Sir Norman

      Bottomley, Rt Hon Mrs Virginia

      Fox, Dr Liam

      Brady, Graham

      Fraser, Christopher

      Brazier, Julian

      Gale, Roger

      Brooke, Rt Hon Peter

      Gibb, Nick

      Browning, Mrs Angela

      Gill, Christopher

      Burns, Simon

      Gillan, Mrs Cheryl

      Butterfill, John

      Goodlad, Rt Hon Sir Alastair

      Cash, William

      Gorman, Mrs Teresa

      Chapman, Sir Sydney

      Gray, James

      (Chipping Barnet)

      Green, Damian

      Chope, Christopher

      Greenway, John

      Clappison, James

      Grieve, Dominic

      Clark, Rt Hon Alan (Kensington)

      Gummer, Rt Hon John

      Clark, Dr Michael (Rayleigh)

      Hamilton, Rt Hon Sir Archie

      Clifton-Brown, Geoffrey

      Hammond, Philip

      Colvin, Michael

      Hawkins, Nick

      Cormack, Sir Patrick

      Hayes, John

      Cran, James

      Heald, Oliver

      Curry, Rt Hon David

      Hogg, Rt Hon Douglas

      Davies, Quentin (Grantham)

      Horam, John

      Day, Stephen

      Howarth, Gerald (Aldershot)

      698

      Hunter, Andrew

      Roe, Mrs Marion (Broxbourne)

      Jenkin, Bernard

      Rowe, Andrew (Faversham)

      Key, Robert

      Ruffley, David

      King, Rt Hon Tom (Bridgwater)

      St Aubyn, Nick

      Kirkbride, Miss Julie

      Sayeed, Jonathan

      Lait, Mrs Jacqui

      Shephard, Rt Hon Mrs Gillian

      Lansley, Andrew

      Simpson, Keith (Mid-Norfolk)

      Leigh, Edward

      Smyth, Rev Martin (Belfast S)

      Letwin, Oliver

      Soames, Nicholas

      Lewis, Dr Julian (New Forest E)

      Spicer, Sir Michael

      Lidington, David

      Spring, Richard

      Lilley, Rt Hon Peter

      stanley, Rt Hon Sir John

      Lloyd, Rt Hon Sir Peter (Fareham)

      Swayne, Desmond

      Loughton, Tim

      Syms, Robert

      Luff, Peter

      Tapsell, Sir Peter

      Lyell, Rt Hon Sir Nicholas

      Taylor, Ian (Esher & Walton)

      MacGregor, Rt Hon John

      Taylor, Rt Hon John D (Strangford)

      McIntosh, Miss Anne

      Taylor, Sir Teddy

      MacKay, Rt Hon Andrew

      Townend, John

      Maclean, Rt Hon David

      Tredinnick, David

      McLoughlin, Patrick

      Trend, Michael

      Madel, Sir David

      Tyrie, Andrew

      Maples, John

      Viggers, Peter

      Maude, Rt Hon Francis

      Walker, Cecil

      Mawhinney, Rt Hon Sir Brian

      Waiter, Robert

      May, Mrs Theresa

      Wardle, Charles

      Moss, Malcolm

      Waterson, Nigel

      Nicholls, Patrick

      Wells, Bowen

      Ottaway, Richard

      Whitney, Sir Raymond

      Page, Richard

      Whittingdale, John

      Paice, James

      Wilshire, David

      Paterson, Owen

      Woodward, Shaun

      Pickles, Eric

      Yeo, Tim

      Prior, David

      Young, Rt Hon Sir George

      Randall, John

      Redwood, Rt Hon John

      Tellers for the Ayes:

      Robathan, Andrew

      Mr. John M. Taylor and

      Robertson, Laurence (Tewk'b'ty)

      Mr. Tim Collins.

      NOES

      Abbott, Ms Diane

      Blunkett, Rt Hon David

      Adams, Mrs Irene (Paisley N)

      Boateng, Paul

      Ainger, Nick

      Borrow, David

      Ainsworth, Robert (Cov'try NE)

      Bradley, Keith (Withington)

      Alexander, Douglas

      Bradley, Peter (The Wrekin)

      Allan, Richard

      Bradshaw, Ben

      Allen, Graham

      Brake, Tom

      Anderson, Donald (Swansea E)

      Breed, Colin

      Anderson, Janet (Rossendale)

      Brinton, Mrs Helen

      Armstrong, Rt Hon Ms Hilary

      Brown, Rt Hon Gordon

      Ashdown, Rt Hon Paddy

      (Dunfermline E)

      Ashton, Joe

      Brown, Russell (Dumfries)

      Atherton, Ms Candy

      Browne, Desmond

      Atkins, Charlotte

      Buck, Ms Karen

      Austin, John

      Burden, Richard

      Ballard, Jackie

      Burgon, Colin

      Banks, Tony

      Burnett, John

      Barnes, Harry

      Burstow, Paul

      Barron, Kevin

      Butler, Mrs Christine

      Battle, John

      Byers, Rt Hon Stephen

      Bayley, Hugh

      Cable, Dr Vincent

      Beard, Nigel

      Campbell, Alan (Tynemouth)

      Beckett, Rt Hon Mrs Margaret

      Campbell, Mrs Anne (C'bridge)

      Begg, Miss Anne

      Campbell, Rt Hon Menzies

      Beith, Rt Hon A J

      (NE Fife)

      Bell, Martin (Tatton)

      Campbell, Ronnie (Blyth V)

      Bell, Stuart (Middlesbrough)

      Campbell-Savours, Dale

      Benn, Rt Hon Tony

      Canavan, Dennis

      Bennett, Andrew F

      Cann, Jamie

      Benton, Joe

      Caplin, Ivor

      Bermingham, Gerald

      Casale, Roger

      Berry, Roger

      Caton, Martin

      Best, Harold

      Cawsey, Ian

      Betts, Clive

      Chapman, Ben (Wirral S)

      Blears, Ms Hazel

      Chaytor, David

      Blizzard, Bob

      Clapham, Michael

      699

      Clark, Rt Hon Dr David (S Shields)

      Griffiths, Jane (Reading E)

      Clark, Paul (Gillingham)

      Griffiths, Nigel (Edinburgh S)

      Clarke, Charles (Norwich S)

      Griffiths, Win (Bridgend)

      Clarke, Eric (Midlothian)

      Grocott, Bruce

      Clarke, Tony (Northampton S)

      Grogan, John

      Clelland, David

      Gunnell, John

      Clwyd, Ann

      Hain, Peter

      Coaker, Vernon

      Hall, Patrick (Bedford)

      Coffey, Ms Ann

      Hamilton, Fabian (Leeds NE)

      Cohen, Harry

      Hancock, Mike

      Coleman, lain

      Hanson, David

      Colman, Tony

      Harman, Rt Hon Ms Harriet

      Connarty, Michael

      Harvey, Nick

      Corbett, Robin

      Heal, Mrs Sylvia

      Corbyn, Jeremy

      Healey, John

      Corston, Ms Jean

      Heath, David (Somerton & Frome)

      Cotter, Brian

      Henderson, Doug (Newcastle N)

      Cousins, Jim

      Henderson, Ivan (Harwich)

      Cox, Tom

      Hepburn, Stephen

      Cranston, Ross

      Heppell, John

      Crausby, David

      Hesford, Stephen

      Cryer, John (Hornchurch)

      Hewitt, Ms Patricia

      Cummings, John

      Hill, Keith

      Cunningham, Rt Hon Dr Jack

      Hinchliffe, David

      (Copeland)

      Hodge, Ms Margaret

      Cunningham, Jim (Cov'try S)

      Hoey, Kate

      Cunningham, Ms Roseanna

      Home Robertson, John

      (Perth)

      Hood, Jimmy

      Curtis-Thomas, Mrs Claire

      Hoon, Geoffrey

      Dafis, Cynog

      Hope, Phil

      Dalyell, Tam

      Hopkins, Kelvin

      Darling, Rt Hon Alistair

      Howarth, Alan (Newport E)

      Darvill, Keith

      Howarth, George (Knowsley N)

      Davey, Valerie (Bristol W)

      Howells, Dr Kim

      Davidson, Ian

      Hoyle, Lindsay

      Davies, Rt Hon Denzil (Llanelli)

      Hughes, Ms Beverley (Stretford)

      Davies, Geraint (Croydon C)

      Hughes, Kevin (Doncaster N)

      Dawson, Hilton

      Humble, Mrs Joan

      Dean, Mrs Janet

      Hurst, Alan

      Denham, John

      Hutton, John

      Dismore, Andrew

      Iddon, Dr Brian

      Dobbin, Jim

      Illsley, Eric

      Donohoe, Brian H

      Ingram, Rt Hon Adam

      Doran, Frank

      Jackson, Ms Glenda (Hampstead)

      Dowd, Jim

      Jackson, Helen (Hillsborough)

      Drew, David

      Jamieson, David

      Drown, Ms Julia

      Jenkins, Brian

      Dunwoody, Mrs Gwyneth

      Johnson, Alan (Hull W & Hessle)

      Eagle, Angela (Wallasey)

      Johnson, Miss Melanie

      Eagle, Maria (L'pool Garston)

      (Welwyn Hatfield)

      Edwards, Huw

      Jones, Barry (Alyn & Deeside)

      Efford, Clive

      Jones, Mrs Fiona (Newark)

      Ellman, Mrs Louise

      Jones, Helen (Warrington N)

      Ennis, Jeff

      Jones, Ms Jenny

      Ewing, Mrs Margaret

      (Wolverh'ton SW)

      Field, Rt Hon Frank

      Jones, Jon Owen (Cardiff C)

      Fisher, Mark

      Jones, Dr Lynne (Selly Oak)

      Fitzpatrick, Jim

      Jones, Martyn (Clwyd S)

      Fitzsimons, Lorna

      Jones, Nigel (Cheltenham)

      Flynn, Paul

      Jowell, Rt Hon Ms Tessa

      Follett, Barbara

      Kaufman, Rt Hon Gerald

      Foster, Don (Bath)

      Keeble, Ms Sally

      Foster, Michael Jabez (Hastings)

      Keen, Alan (Feltham & Heston)

      Foster, Michael J (Worcester)

      Keen, Ann (Brentford & Isleworth)

      Foulkes, George

      Keetch, Paul

      Fyfe, Maria

      Kelly, Ms Ruth

      Gapes, Mike

      Kemp, Fraser

      Gardiner, Barry

      Kennedy, Jane (Wavertree)

      George, Bruce (Walsall S)

      Khabra, Piara S

      Gerrard, Neil

      Kidney, David

      Gibson, Dr Ian

      Kilfoyle, Peter

      Godman, Dr Norman A

      King, Andy (Rugby & Kenilworth)

      Godsiff, Roger

      King, Ms Oona (Bethnal Green)

      Goggins, Paul

      Kingham, Ms Tess

      Gordon, Mrs Eileen

      Kumar, Dr Ashok

      Gorrie, Donald

      Ladyman, Dr Stephen

      700

      Lawrence, Ms Jackie

      Pickthall, Colin

      Laxton, Bob

      Pike, Peter L

      Lepper, David

      Plaskitt, James

      Leslie, Christopher

      Pollard, Kerry

      Levitt, Tom

      Pond, Chris

      Lewis, Ivan (Bury S)

      Pope, Greg

      Lewis, Terry (Worsley)

      Pound, Stephen

      Liddell, Rt Hon Mrs Helen

      Powell, Sir Raymond

      Linton, Martin

      Prentice, Ms Bridger (Lewisham E)

      Lloyd, Tony (Manchester C)

      Prentice, Gordon (Pendle)

      Llwyd, Elfyn

      Primarolo, Dawn

      Lock, David

      Prosser, Gwyn

      Love, Andrew

      Purchase, Ken

      McAllion, John

      Quinn, Lawrie

      McAvoy, Thomas

      Radice, Giles

      McCabe, Steve

      Rammell, Bill

      McCafferty, Ms Chris

      Rapson, Syd

      McCartney, Rt Hon Ian

      Raynsford, Nick

      (Makerfield)

      Reid, Rt Hon Dr John (Hamilton N)

      McDonagh, Siobhain

      Rendel, David

      Macdonald, Calum

      Robertson, Rt Hon George

      McDonnell, John

      (Hamilton S)

      McFall, John

      Robinson, Geoffrey (Cov'try NW)

      McIsaac, Shona

      Roche, Mrs Barbara

      McKenna, Mrs Rosemary

      Rooker, Jeff

      Mackinlay, Andrew

      Rooney, Terry

      Maclennan, Rt Hon Robert

      Ross, Ernie (Dundee W)

      McNamara, Kevin

      Rowlands, Ted

      McNulty, Tony

      Roy, Frank

      MacShane, Denis

      Ruane, Chris

      Mactaggart, Fiona

      Ruddock, Joan

      McWalter, Tony

      Russell, Bob (Colcester)

      Mahon, Mrs Alice

      Russell, Ms Christine (Chester)

      Mallaber, Judy

      Ryan, Ms Joan

      Marsden, Gordon (Blackpool S)

      Salter, Martin

      Marsden, Paul (Shrewsbury)

      Sanders, Adrian

      Marshall, David (Shettleston)

      Sarwar, Mohammad

      Marshall-Andrews, Robert

      Savidge, Malcolm

      Martlew, Eric

      Sawford, Phil

      Maxton, John

      Sedgemore, Brian

      Meacher, Rt Hon Michael

      Shaw, Jonathan

      Meale, Alan

      Sheldon, Rt Hon Robert

      Merron, Gillian

      Short, Rt Hon Clare

      Michael, Rt Hon Alun

      Simpson, Alan (Nottingham S)

      Michie, Bill (Shefld Heeley)

      Singh, Marsha

      Michie, Mrs Ray (Argyll & Bute)

      Skinner, Dennis

      Milburn, Rt Hon Alan

      Smith, Rt Hon Andrew (Oxford E)

      Miller, Andrew

      Smith, Angela (Basildon)

      Moffatt, Laura

      Smith, Miss Geraldine

      Moonie, Dr Lewis

      (Morecambe & Lunesdale)

      Moore, Michael

      Smith, Jacqui (Redditch)

      Moran, Ms Margaret

      Smith, John (Glamorgan)

      Morgan, Alasdair (Galloway)

      Smith, Llew (Blaenau Gwent)

      Morgan, Ms Julie (Cardiff N)

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

      Morley, Elliot

      Snape, Peter

      Morris, Ms Estelle(B'ham Yardley)

      Soley, Clive

      Morris, Rt Hon John (Aberavon)

      Southworth, Ms Helen

      Mountford, Kali

      Spellar, John

      Mowlam, Rt Hon Marjorie

      Squire, Ms Rachel

      Mudie, George

      Starkey, Dr Phyllis

      Mullin, Chris

      Steinberg, Gerry

      Murphy, Denis (Wansbeck)

      Stevenson, George

      Murphy, Jim (Eastwood)

      Stewart, David (Inverness E)

      Naysmith, Dr Doug

      Stinchcombe, Paul

      Norris, Dan

      Stoate, Dr Howard

      Oaten, Mark

      Stott, Roger

      O'Brien, Bill (Normanton)

      Strang, Rt Hon Dr Gavin

      O'Hara, Eddie

      Straw, Rt Hon Jack

      Olner, Bill

      Stringer, Graham

      O'Neill, Martin

      Stuart, Ms Gisela

      Öpik, Lembit

      Stunell, Andrew

      Organ, Mrs Diana

      Sutcliffe, Gerry

      Osborne, Ms Sandra

      Swinney, John

      Pearson, Ian

      Taylor, Rt Hon Mrs Ann

      Pendry, Tom

      (Dewsbury)

      Perham, Ms Linda

      Taylor, Ms Dari (Stockton S)

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      Taylor, Matthew (Truro)

      White, Brian

      Temple-Morris, Peter

      Whitehead, Dr Alan

      Thomas, Gareth (Clwyd W)

      Wicks, Malcolm

      Thomas, Gareth R (Harrow W)

      Wigley, Rt Hon Dafydd

      Timms, Stephen

      Williams, Rt Hon Alan

      Tipping, Paddy

      (Swansea W)

      Todd, Mark

      Williams, Alan W (E Carmarthen)

      Tonge, Dr Jenny

      Williams, Mrs Betty (Conwy)

      Touhig, Don

      Willis, Phil

      Trickett, Jon

      Wills, Michael

      Truswell, Paul

      Wilson, Brian

      Turner, Dennis (Wolverh'ton SE)

      Winnick, David

      Turner, Dr Desmond (Kemptown)

      Winterton, Ms Rosie (Doncaster C)

      Turner, Dr George (NW Norfolk)

      Wise, Audrey

      Twigg, Derek (Halton)

      Wood, Mike

      Twigg, Stephen (Enfield)

      Woolas, Phil

      Tyler, Paul

      Worthington, Tony

      Vaz, Keith

      Wright, Anthony D (Gt Yarmouth)

      Vis, Dr Rudi

      Wright, Dr Tony (Cannock)

      Walley, Ms Joan

      Wyatt, Derek

      Ward, Ms Claire

      Wareing, Robert N

      Tellers for the Noes:

      Watts, David

      Mr. Mike Hall and

      Webb, Steve

      Mrs. Anne McGuire.

      Question accordingly negatived.
      Clause added to the Bill.

    New Clause 11

      EXCESSIVE PENSION CONTRIBUTIONS MADE BY PERSONS WHO HAVE BECOME INSOLVENT
      '. For sections 342A to 342C of the Insolvency Act 1986 there shall be substituted—
      "Recovery of excessive pension contributions
      342A.—(1) Where an individual who is adjudged bankrupt—

      (a) has rights under an approved pension arrangement, or

      (b) has excluded rights under an unapproved pension arrangement,

      the trustee of the bankrupt's estate may apply to the court for an order under this section.
      (2) If the court is satisfied—

      (a) that the rights under the arrangement are to any extent, and whether directly or indirectly, the fruits of relevant contributions, and

      (b) that the making of any of the relevant contributions ("the excessive contributions") has unfairly prejudiced the individual's creditors,

      the court may make such order as it thinks fit for restoring the position to what it would have been had the excessive contributions not been made.
      (3) Subsection (4) applies where the court is satisfied that the value of the rights under the arrangement is, as a result of rights of the individual under the arrangement or any other pension arrangement having at any time become subject to a debit under section 23(1)(a) of the Welfare Reform and Pensions Act 1999 (debits giving effect to pension-sharing), less than it would otherwise have been.
      (4) Where this subsection applies—

      (a) any relevant contributions which were represented by the rights which became subject to the debit shall, for the purposes of subsection (2), be taken to be contributions of which the rights under the arrangement are the fruits, and

      (b) where the relevant contributions represented by the rights under the arrangement (including those so represented by virtue of paragraph (a)) are not all excessive contributions, relevant contributions which are represented by the rights under the arrangement
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      otherwise than by virtue of paragraph (a) shall be treated as excessive contributions before any which are so represented by virtue of that paragraph.

      (5) In subsections (2) to (4) "relevant contributions" means contributions to the arrangement or any other pension arrangement—

      (a) which the individual has at any time made on his own behalf, or

      (b) which have at any time been made on his behalf.

      (6) The court shall, in determining whether it is satisfied under subsection (2)(b), consider in particular—

      (a) whether any of the contributions were made for the purpose of putting assets beyond the reach of the individual's creditors or any of them, and

      (b) whether the total amount of any contributions—

      (i) made by or on behalf of the individual to pension arrangements, and

      (ii) represented (whether directly or indirectly) by rights under approved pension arrangements or excluded rights under unapproved pension arrangements,

      is an amount which is excessive in view of the individual's circumstances when those contributions were made.
      (7) For the purposes of this section and sections 342B and 342C ("the recovery provisions"), rights of an individual under an unapproved pension arrangement are excluded rights if they are rights which are excluded from his estate by virtue of regulations under section 12 of the Welfare Reform and Pensions Act 1999.
      (8) In the recovery provisions—
      "approved pension arrangement" has the same meaning as in section 11 of the Welfare Reform and Pensions Act 1999;
      "unapproved pension arrangement" has the same meaning as in section 12 of that Act.
      Orders under section 342A
      342B.—(1) Without prejudice to the generality of section 342A(2), an order under section 342A may include provision—

      (a) requiring the person responsible for the arrangement to pay an amount to the individual's trustee in bankruptcy,

      (b) adjusting the liabilities of the arrangement in respect of the individual,

      (c) adjusting any liabilities of the arrangement in respect of any other person that derive, directly or indirectly, from rights of the individual under the arrangement,

      (d) for the recovery by the person responsible for the arrangement (whether by deduction from any amount which that person is ordered to pay or otherwise) of costs incurred by that person in complying in the bankrupt's case with any requirement under section 342C(1) or in giving effect to the order.

      (2) In subsection (1), references to adjusting the liabilities of the arrangement in respect of a person include (in particular) reducing the amount of any benefit or future benefit to which that person is entitled under the arrangement.
      (3) In subsection (1)(c), the reference to liabilities of the arrangement does not include liabilities in respect of a person which result from giving effect to an order or provision falling within section 22(1) of the Welfare Reform and Pensions Act 1999 (pension sharing orders and agreements).
      (4) The maximum amount which the person responsible for an arrangement may be required to pay by an order under section 342A is the lesser of—

      (a) the amount of the excessive contributions, and

      (b) the value of the individual's rights under the arrangement (if the arrangement is an approved pension arrangement) or of his excluded rights under the arrangement (if the arrangement is an unapproved pension arrangement).

      (5) An order under section 342A which requires the person responsible for an arrangement to pay an amount ("the restoration amount") to the individual's trustee in bankruptcy must provide for the liabilities of the arrangement to be correspondingly reduced.
      (6) For the purposes of subsection (5), liabilities are correspondingly reduced if the difference between—

      (a) the amount of the liabilities immediately before the reduction, and

      (b) the amount of the liabilities immediately after the reduction,
      is equal to the restoration amount.

      (7) An order under section 342A in respect of an arrangement—

      (a) shall be binding on the person responsible for the arrangement, and

      (b) overrides provisions of the arrangement to the extent that they conflict with the provisions of the order.

      Orders under section 342A: supplementary
      342C.—(1) The person responsible for—

      (a) an approved pension arrangement under which a bankrupt has rights,

      (b) an unapproved pension arrangement under which a bankrupt has excluded rights, or

      (c) a pension arrangement under which a bankrupt has at any time had rights,

      shall, on the bankrupt's trustee in bankruptcy making a written request, provide the trustee with such information about the arrangement and rights as the trustee may reasonably require for, or in connection with, the making of applications under section 342A.
      (2) Nothing in—

      (a) any provision of section 159 of the Pension Schemes Act 1993 or section 91 of the Pensions Act 1995 (which prevent assignment and the making of orders which restrain a person from receiving anything which he is prevented from assigning),

      (b) any provision of any enactment (whether passed or made before or after the passing of the Welfare Reform and Pensions Act 1999) corresponding to any of the provisions mentioned in paragraph (a), or

      (c) any provision of the arrangement in question corresponding to any of those provisions,

      applies to a court exercising its powers under section 342A.
      (3) Where any sum is required by an order under section 342A to be paid to the trustee in bankruptcy, that sum shall be comprised in the bankrupt's estate.
      (4) Regulations may, for the purposes of the recovery provisions, make provision about the calculation and verification of—

      (a) any such value as is mentioned in section 342B(4)(b);

      (b) any such amounts as are mentioned in section 342B(6)(a) and (b).

      (5) The power conferred by subsection (4) includes power to provide for calculation or verification—

      (a) in such manner as may, in the particular case, be approved by a prescribed person; or

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      (b) in accordance with guidance—

      (i) from time to time prepared by a prescribed person, and

      (ii) approved by the Secretary of State.

      (6) References in the recovery provisions to the person responsible for a pension arrangement are to—

      (a) the trustees, managers or provider of the arrangement, or

      (b) the person having functions in relation to the arrangement corresponding to those of a trustee, manager or provider.

      (7) In this section and sections 342A and 342B—

      "prescribed" means prescribed by regulations;

      "the recovery provisions" means this section and sections 342A and 342B;

      "regulations" means regulations made by the Secretary of State.

      (8) Regulations under the recovery provisions may—

      (a) make different provision for different cases;

      (b) contain such incidental, supplemental and transitional provisions as appear to the Secretary of State necessary or expedient.

      (9) Regulations under the recovery provisions shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.".—[Mr. Timms.]
      Brought up, and read the First time.
      The Minister of State, Department of Social Security (Mr. Stephen Timms): I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Michael Lord): With this, it will be convenient to discuss the following: Government new clause 12—Excessive pension contributions made by persons who have become insolvent: Scotland.
      Government amendments Nos. 29, 53 to 62 and 66 to 77.
      Mr. Timms: One of the main themes of our programme for welfare reform is that people should be encouraged to save for retirement if they can. However, when a person is made bankrupt, any pension arrangements that he has may be jeopardised. In some cases, pension rights can be seized by a trustee in bankruptcy and all the pension savings lost.
      The existing clause 11 will ensure that in future, if a person becomes bankrupt, any rights that he has in approved pension arrangements will be protected. The protection will apply to occupational pensions, personal pensions and in due course to stakeholder pensions. I acknowledge the support that Opposition Members gave to that principle in Committee. However, we cannot give absolute protection to pension savings. There needs to be some safeguard to prevent people who are falling into bankruptcy—[Interruption.]
      Mr. Deputy Speaker: Order. Conversations are breaking out throughout the Chamber. The House ought to listen to the Minister who is addressing the House.
      Mr. Timms: Thank you, Mr. Deputy Speaker.
      There must be safeguards to prevent people who are falling into bankruptcy from deliberately seeking to put assets into their pension in order to avoid their legitimate

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      obligations to creditors. We need to strike a balance between safeguarding pension savings and the rights of creditors. New clauses 11 and 12 provide that safeguard. Their purpose is to prevent people from using an approved pension arrangement deliberately to put money beyond the reach of creditors.
      Under the provisions in the new clauses, if a trustee in bankruptcy believes that excessive contributions have been made to a pension, he will be able to apply to a court for an order to recover the amount of those excessive contributions.
      Mr. Nick Hawkins: Will the Minister explain why "excessive" is not defined?
      Mr. Timms: What is or is not excessive will be for a court to determine. I shall set out in a moment the issues that the court will have to address.
      If the application is successful, the pension scheme will be required to pay a sum to the trustee in bankruptcy. That sum will then form part of the bankrupt's estate so that it can be used for the benefit of creditors.
      The question that the court will have to address in considering whether there have been any excessive contributions is whether the making of any of those contributions has unfairly prejudiced the creditors. In coming to a view on that question, the court will be directed by the clauses to consider two matters in particular: first, whether any of the contributions were made for the purpose of putting assets beyond the reach of creditors; and secondly, whether the total amount of contributions was excessive in view of the individual's circumstances when they were made.
      As the House will know, we have consulted on these proposals. A number of the responses were concerned about how a court would decide on excessive contributions, and it might be useful if I deal with some of those points. One particular concern was whether ordinary, standard contributions to a pension required by the rules of the scheme could ever be regarded as excessive. In the vast majority of cases, we would not expect a court to rule that they were excessive.
      I can assure the House that the measure is designed as a deterrent, and is aimed at that small group of people who might try to defeat their creditors. We would expect only a handful of cases each year to be taken to court.
      In addition to the new clauses, there are various related amendments. The most important is amendment No. 68, which is a further amendment to the Insolvency Act 1986. As I said, new clauses 11 and 12 allow for excessive contributions to a pension to be recovered for the benefit of creditors. However, the legislation also needs to deal with the situation when the pension is shared, under other provisions contained in the Bill.
      If a couple divorce, they will be able to share the pension as a result of the pension-sharing measures in the Bill. Following the pension share, the pension scheme member may become bankrupt. Under the new clauses, a court could find that the bankrupt's pension is to some extent made up of excessive contributions, moneys that properly ought to have been available for creditors. Normally the court would make an order to recover the full amount of the excessive contributions from the pension rights of the bankrupt, but that may not be
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      possible because of the pension-sharing arrangement, and insufficient resources remain in the bankrupt's fund for that purpose.
      Where a bankrupt's pension has been shared between the divorcing spouses, amendment No. 68 sets out how the provisions on the recovery of excessive contributions from the former spouse's pension share of the bankrupt's pension will apply.
      Let me make a few general remarks. First, like the new clauses, the amendment is intended as a deterrent. Without it, some couples who are going through a divorce may be tempted to manipulate the system. Some link between the measures in the Bill on pension sharing and the protection of pensions on bankruptcy is therefore necessary. Secondly, however, we anticipate that the number of cases falling under the amendment will be pretty small.
      Mr. Webb: The Minister has just described how the pension-sharing rules and the rules on pensions in bankruptcy will interact. I understand from the Secretary of State's private office that the notes on the new clauses are being prepared by the Department and will be available for their lordships' consideration, but not for this House. As someone who knows little of these matters, I think that it would have been helpful if those notes had been available before today's debate.
      Mr. Timms: I entirely accept the hon. Gentleman's point. I hope the explanation that I am giving, which is fairly detailed, will be helpful to the House and will clarify the position.
      Thirdly, current bankruptcy law contains a longstanding provision to allow a divorce settlement to be overturned when there is evidence that the settlement deprives creditors of assets to which they should be entitled. I understand that those matters are referred to in insolvency law as transactions at undervalue or preferences.
      The amendment follows that approach by providing that excessive contributions can be recovered from the pension share of the former spouse, but only when there is evidence that the pension-sharing order or agreement was at undervalue or amounted to a preference, unfairly depriving creditors of assets. It builds on existing provisions in insolvency law allowing divorce settlements to be reviewed.
      I shall set out how the amendment will work. Let us assume that a couple divorce and, as part of the settlement, share the pension. A year later, the pension scheme member becomes bankrupt. The trustee in bankruptcy will use the provisions in the new clauses to ask the court to examine the contributions made to the pension of the person who has become bankrupt.
      The court will come to a view about any excessive contributions and, if appropriate, will issue an order for an amount of excessive contributions to be recovered, for the benefit of the creditors. However, as a result of the pension share, there might be insufficient rights in the bankrupt's pension to recover the full amount of the excessive contributions. At that point, the provisions in the amendment come into play.
      Under the amendment, the trustee in bankruptcy will be able to apply to a court for an order to make a recovery of the balance of the excessive contributions from the

      707
      former spouse's pension share. As a first step, the court will have to consider whether there is evidence that the divorce settlement generally has the effect of putting assets beyond the reach of creditors. If it finds that there is no evidence of that, the matter can go no further. First call for excessive contributions will always be on the bankrupt's share of the pension. Only if there is a balance of excessive contributions not covered by the bankrupt's share will any recovery be made from the share of the former spouse.
      If a court finds that all the conditions are met and that it is appropriate that some excessive contributions should be recovered from the former spouse's pension share, it will be able to make an order under the amendment. It will make such an order as it thinks fit for restoring the position to what it would have been if the bankrupt had not transferred those excessive contributions to the former spouse's pension share. The likely outcome is that the court will order that a sum representing the excessive contributions should be paid by the former spouse's pension scheme to the trustee in bankruptcy.
      Hon. Members may have noticed that the amendment extends only to England and Wales and that there is no equivalent for Scotland. The policy is that the provision should apply equally to Scotland, and we shall table an amendment to deal with that at a later date. The amendments I mentioned at the beginning of my remarks are minor changes, consequential on those I have described.
      Sir Robert Smith: Will the Minister clarify why the Government were unable to introduce the legislation for Scotland so that the House of Commons could have debated it?
      Mr. Timms: It was simply a question of preparing the drafting and getting the work done in time, but we will shortly introduce the appropriate measures. I have no doubt that they will receive thorough scrutiny.
      Mr. Clifford Forsythe: I did not hear the Minister mention Northern Ireland. Will he tell the House the position in that regard?
      Mr. Timms: I think that the provisions I have described refer to Northern Ireland as well, but I shall check and come back to the hon. Gentleman if I am not correct. He is absolutely right to raise that point with me.
      The purpose of amendments Nos. 66, 73, 76 and 77 is to ensure that income payment orders can still be made, despite the provisions in clauses 11 and 12. I apologise for this being a little confusing, but I am referring to clauses 11 and 12, which are already part of the Bill. My earlier remarks were about new clauses 11 and 12. The numbering is coincidental.
      The amendments make it clear that there is a distinction between pension rights and the income deriving from those rights. Although pension rights are to be protected, the income deriving from such rights may be subject to an income payment order, but only for the period of the bankruptcy, which is normally three years.
      708
      7.45 pm
      The purpose of amendments Nos. 54 to 60 is to specify in more detail how unapproved pension rights would be protected from seizure by the trustee in bankruptcy. In other words, the bankrupt will need to make the application, and it will be for the courts to decide whether rights in an unapproved pension arrangement should be treated as if they were rights in an approved arrangement, and so protected. The amendments include provision for the trustee in bankruptcy and the bankrupt to reach an out-of-court agreement that unapproved rights should fall outside the bankrupt's estate—a practical measure, designed to reduce court costs.
      Amendments Nos. 53, 61 and 62 deal with another aspect of pensions and bankruptcy—the position of pensions which have been shared following divorce. These technical amendments are necessary to ensure that the provisions we are making for pension sharing on divorce work in harmony with those for pensions on bankruptcy.
      Miss Anne McIntosh: Can the Minister explain at what stage of divorce proceedings a party should put in a bid for pension sharing under the new provisions?
      Mr. Timms: These provisions concern what happens if bankruptcy occurs after a pension share; they do not concern the procedure for pension sharing itself. A number of new clauses and amendments, which we shall come to later, deal with the Bill's pension-sharing provisions. These matters concern bankruptcy subsequent to a pension share being arranged, when the question whether excessive contributions have been made—and what can be done if they have—arises.
      The amendments make it clear that, in the period between the making of a pension-sharing order or agreement and the discharge of the resulting liability by the trustees of the pension scheme, the pension credits awarded to a former spouse are to be treated as if they were rights held by a former spouse.
      Where the trustees of a pension scheme have discharged a pension-sharing order, the pension credit will have become pension rights belonging to the former spouse. The amendments will ensure that, for the purposes of the bankruptcy provisions, a pension credit which the trustees have not yet discharged will be treated in the same way. The bankruptcy provisions refer to the protection of pension rights, and these amendments are necessary to make it clear that a pension credit, once awarded, is a right.
      Finally on this large group of amendments, in Committee we agreed to look into a point that was raised by Conservative Members. My hon. Friend the Under-Secretary agreed to take it away for consideration, in response to the hon. Member for Grantham and Stamford (Mr. Davies), and amendment No. 29 arises out of that.
      As currently drafted, clause 11(9) safeguards the trustees when they have taken decisions before the date of the Inland Revenue's decision on tax approval, but will not know what decision the Inland Revenue has made until they receive notification of it. As such, it is quite possible that the trustees may have made a decision about the bankrupt's pension in the interim. For example, they

      709
      may have bought him an annuity. It was never our intention that trustees could be held liable for decisions made in good faith during that interim period. The amendment, therefore, will extend the protection afforded to trustees until the date on which they receive the notification from the Inland Revenue.
      I return to the question that was asked about Northern Ireland, and I can give the hon. Member for South Antrim (Mr. Forsythe) an answer. Although there is separate legislation for Northern Ireland, it normally follows the legislation applying to Great Britain, but it will be for the Northern Ireland Assembly to decide what to do on this particular matter.
      The protection and enhancement of pension savings is a key part of our policy. In cases of bankruptcy, though, we must also have regard to the rights of creditors. It would be wrong if people who become bankrupt could use pensions deliberately to put money beyond the reach of creditors. There must be some form of protection against that, which is what these measures seek to achieve. Necessarily, too, there needs to be some linkage with the new measures on pension sharing in the Bill.
      I believe that the arrangements we are proposing are fair, building as they do on existing arrangements, and I commend them to the House.
      Mr. Quentin Davies: It would be churlish not to acknowledge that the Government have adopted an amendment that I put forward in Committee. They did not tell me that they would do so, but I am glad that they have. It is represented in amendment No. 29. We must be grateful for that—it is a rare event when the Government accept that anybody else may have a useful contribution to make to a piece of legislation. It is only fair to give them credit where it is due, however rare such occasions are.
      However, if the Minister thought that that concession would spike my guns and that I would be terribly nice to him for the rest of the proceedings, I must disappoint him. Although the bulk of the amendments are of a routine, technical nature, three substantive issues arise out of the long list of new clauses and amendments. They arise in relation to amendment No. 68 and new clauses 11 and 12, and they reflect a sorry state of affairs.
      All this is a pretty bad business. The Minister did not tell us that amendment No. 68 drives a coach and horses through a principle of which I thought the Government were proud. We might discuss that principle later this evening when we deal with pension sharing. It is that, once a pension share has been effected, it becomes the unconditional property of the beneficiary of that share—of the recipient of the pension credit, to use the terms in the Bill. Clearly, that provision has now been modified substantially by the amendment on insolvency. If it can be altered in this context, perhaps it can be altered in others, too, and it will be possible for courts subsequently to review pension sharing and make retrospective changes. That fundamentally alters the whole concept that has been sold to the House.
      I find it thoroughly unsatisfactory that the Minister should bring forward this provision in relation to England, but not to Scotland. He simply says that the provision in relation to Scotland can be dealt with in another place. We know how these things work out. In practice, when the Bill comes back to this place the provision in relation
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      to Scotland will not have been given proper scrutiny. It will not have gone through a Committee stage in this place. After all, the House of Commons is supposed to be the primary legislature in this country. The provision will be debated in detail only, if at all, in the other place—a Chamber which the Government say is thoroughly unsatisfactory and undemocratic. It is contemptuous to treat Scotland in that way. The people of Scotland are entitled to feel more than a little aggrieved at the frivolity with which they have been treated.
      That stricture applies to the whole treatment of pension sharing and insolvency in relation to pensions, as they are dealt with in the Bill. It is absurd that the Government should sell the Scottish people the idea that they now have, for the first time since 1707, a legislature of their own. The Scots have always had a fine legal system. It is one of the oldest systems of Roman law in constant, steady existence, yet the Scottish Parliament will not be allowed to discuss those matters. Scots law is different from ours. Scotland has its own company and family law, yet it will be unable to take decisions on pension sharing and insolvency as they apply to pensions because, those matters will be dealt with in Westminster in the way that we have just discovered—they will not be brought before this House at the same time as the corresponding English legislation.
      The reality that we now see emerging explodes the fact that, for their own slightly squalid reasons, the Labour party has decided to sell a pup to the Scottish people. Now that it is confident of having become the largest party in the Scottish Parliament, although it did not achieve the absolute majority that it wanted, we are seeing how genuine is the Government's commitment to the idea of Scottish legislative devolution, and how thin, superficial and bogus are the concerns expressed by the Government for the Scottish people' s right to have a greater and more direct say in their own legislation.
      That brings me to the two new clauses, which are the substantive elements in this string of new clauses and amendments—new clauses 11 and 12. New clause 12 is the Scottish counterpart to new clause 11, and what I just said in relation to the Scottish Parliament's rights in this area applies very much to that. I shall say no more about that, but will focus on new clause 11, which is the heart of the matter. What is so unsatisfactory about this evening's proceedings is that there is a double insult to Parliament in how the Government have dealt with this issue.
      As the Liberals pointed out, the new clause has been introduced with no explanatory notes. It is a significant new addition to the Bill and it has been introduced at the last minute with no explanations and minimum opportunity for anybody in the House to understand what the Government's contentions are, to consult outside bodies, to take legal advice, and to do the job that we are all sent here to do, which is to ensure that legislation is scrutinised properly. The Government obviously do not want us to do that and are trying to undercut Parliament's responsibility and diminish its role. It should be clearly recorded that that is the effect of the procedure that they have adopted this evening.
      The second abuse is that the new clause is in no sense a technical strengthening of the Bill. It is in no sense incremental, building on what is already in the Bill. It is not explanatory, making it clear to citizens what the changes in the law are about. All such changes can be made after the Committee stage. This new clause is a

      711
      thoroughly new approach, negating the substance of clauses 11 and 12 as they stand in the existing Bill, which passed Second Reading and its Committee stage. The Government had neither the courtesy nor the straightforwardness to admit that. They are trying to smuggle through a substantial and substantive change in the Bill by introducing it the very last moment, with a minimum of fanfare, in the hope that the Opposition would not notice. They badly miscalculated there.
      Mr. Webb: As I have already said, I regard myself as ignorant in these matters. I have been trying to weigh how to advise my colleagues to vote. My concern about the hon. Gentleman's opposition to the new clause is whether he has an alternative strategy for preventing people from putting money into pension funds to avoid their creditors. Is there another way of doing this?
      Mr. Davies: The hon. Gentleman asks a reasonable question. Yes, we do have an alternative strategy. It is the one in the Bill, which has already been read and which we went through in Committee and with which we agreed. That is what happens if we do a deal with the Government. We debate a legislative proposal made by the Government in good faith and agree that it is a sensible proposal to recommend to Parliament. Then what happens? We find a few weeks later that a surreptitious attempt has been made at the last minute, in the hope that no one will notice, fundamentally to change the essence of the agreed Bill. I wonder what is the point of having a Committee stage at all. Bills are thoroughly debated, we come out with an agreed text and then, after the Committee stage, the Government make a fundamental change.
      I shall explain to those who have had no chance to mug up on these matters exactly where the differences lie. Clauses 11 and 12 provide for a separate treatment of approved and unapproved pension schemes. That distinction is absolutely key, for a reason that I shall explain later. The former have been approved by the Inland Revenue in accordance with section 14 of the taxes legislation, which means that the amounts to be put into those pension schemes, whether they are occupational, personal, money purchase or final salary schemes, are limited by Revenue rules. However, any amount of money can be put into unapproved schemes, because the Revenue has not approved them so there are no constraints. There is much greater scope for putting in large amounts of money, so the issue of excess contributions may arise.
      8 pm
      The Bill as drafted, as debated in Committee, and as agreed between the Government and the Opposition, made a clear distinction, for the purposes of insolvency, between approved and unapproved pension schemes. The new clause abolishes that distinction and provides that both approved and unapproved schemes should be subject to the same regime. That is a fundamental difference.
      Secondly, clause 11 of the Bill as originally drafted makes it clear that there is absolute protection for approved schemes in the event of bankruptcy, as there always has been for occupational schemes that are set up under trusts. In trust law, assets held in the trust to the
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      benefit of the pensioner are not deemed to be the assets of the individual, so they have always been protected. That is an old canon of English law, which was continued for approved schemes in the Bill as it was passed in Committee. That is no longer the case, because approved schemes are now to be open to clawback from trustees in bankruptcy, and I presume that that includes occupational pension schemes which previously always had absolute protection.
      In the new clause, the Government are surreptitiously, without having the straightforwardness to tell the House what they are doing, not only failing to give greater protection to pension schemes in the event of bankruptcy, which was their announced intention when they introduced the Bill, but are withdrawing an existing protection. They cannot do much more of a U-turn than that, and doing it surreptitiously does not make it more attractive.
      Thirdly, under clause 12 as originally drafted and agreed in Committee, there was an assumption that there would be protection for unapproved schemes. The formula was that if there were any doubt, the court would take a view on what would be reasonably required to meet the needs of the pensioner and his family—I am quoting the Bill almost verbatim—and would balance that against what sums in the unapproved scheme would be available for seizure by the trustee in bankruptcy. There was a presumption that there was at least a hard core of protection for an unapproved scheme, but that protection has also gone.
      The House deserves an explanation of this U-turn. It is unsatisfactory to go through the legislative process and to find that the Government are doing a somersault and changing substantially or reversing the whole thrust of the Bill—which has been debated in good faith and has gone through Committee stage—without telling us why they have changed their mind. The Minister, far from being straightforward and telling us why they have changed their mind, has pretended that the Government's actions have been on a continuum and there has not been a clear break with the Bill as originally drafted.
      The Minister will have to concede that there has been a change, so perhaps he will tell us what pressure the Government were under to change their mind. What high-powered lobbying has taken place behind the scenes? Why have they changed their mind, or do they legislate with such frivolity that they do not know what is in their mind from one moment to the next? In March, by the simple turn of the kaleidoscope, they are likely to give us one answer to our question, and then in May, they will give us another. No doubt, in June or July, when the Bill goes to the other place, they will have a third answer. That is a hopeless way to legislate, and the Government's behaviour is a disgrace to the House of Commons.
      The Government's behaviour places the Opposition in a quandary. What do we do about this? We thought that we had an agreement on these two clauses, but the Government, without consulting us and without having the honesty to tell us straightforwardly what they are doing, have run away from that agreement and have done something completely different. That is not the way in which the Conservative party behaves. We think through proposals carefully, and as the Opposition we make an effort to take our legislative tasks seriously. We try to ensure that we consider legislation with basic thoroughness, and that our statements have a modicum of

      713
      consistency from one stage to the next. We would ill serve Parliament if we behaved in accordance with any other principles. I am sad that the Government do not share our principles. Our position is exactly as I set out in Committee a few weeks ago: we must address this anomaly.
      At present, before any of these provisions have been enacted, occupational pension schemes are protected from bankruptcy because they are set up under trust law. Following the Landau case, there was considerable doubt whether other forms of pension arrangement—approved or unapproved—were so protected. We consider it a thoroughly unsatisfactory state of affairs for there to be legal discrimination between a particular category of pension—occupational pension schemes—and other types of pension scheme, including personal pensions, the Government's proposed stakeholder pensions, their new proposals for leases, or any other sensible scheme that may come up with. If they use their majority to introduce less than sensible schemes, no doubt such schemes would also be included.
      We should not discriminate between different forms of pension scheme in the matter of their protection from bankruptcy. That anomaly needed to be removed, and we thought that we had agreed in Committee a method of removing it: that is, the original provision in the Bill. The Government are now running away from that without telling the country or the House. That is the salient point, and if I repeat it often enough, perhaps I shall shame the Minister into explaining why the Government have changed their mind, because they owe the House an explanation.
      There is a logic for some degree of protection for pensions in the event of insolvency. It is in the interests of taxpayers, because if someone's total assets are taken away, including those on which his livelihood in retirement may depend, the taxpayer may become the bearer of the residual liability to keep him. That is not a desirable state of affairs. If pension contributions have been made in good faith, within the Revenue rules, out of past earnings that are not the cause of the bankruptcy, it is reasonable to protect them.
      Our position is exactly the same as the one we took in Committee, and it will be exactly the same next week, next month and next year. We do not believe in somersaults: that is no way in which to legislate. It is particularly worrying when it is a reflection of such an arrogant Government who think that they can get away with anything and do not need to think through their legislative proposals properly.
      The Government should go back to the original clauses 11 and 12. New clause 11 is entirely superfluous and extremely dangerous. It removes the important distinction between approved and unapproved schemes. As a result, it makes a nonsense of the new phrase that enters our legal vocabulary for the first time: the concept of "excessive contributions". That is absurd because, by definition, if a pension scheme is approved by the Revenue, contributions cannot be excessive. That is what approval means.
      Mr. Bayley indicated assent.
      Mr. Davies: The Minister is nodding. If contributions to an approved scheme cannot, by definition, be excessive, they cannot be subject to clawback on the ground that they
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      have been excessive. I therefore feel that clause 11 should remain, as should the distinction between approved and unapproved schemes.
      If the Minister still wants to introduce the idea that there can be excessive contributions in the case of an approved scheme, as suggested in new clause 11, he must tell us why the Inland Revenue's rules allow excessive contributions to be made in the first place. As we know, over the years the Inland Revenue has examined with enormous care what constitutes reasonable pension provisions that people might make in relation to their salaries, or that employers might make on their behalf. There is a limit to the amount that an employer can contribute to a pension scheme—15 per cent.—and age-related limits to the amount that an individual can contribute to his personal pension. Indeed, the Government are considering further limits in the context of stakeholder pensions—a flat-rate allowance per annum.
      Presumably, the new clauses and amendments were tabled because, by definition, they were reasonable and not excessive. When changes have needed to be made, they have been made. The last Conservative Government, for example, decided that it was a good idea to cap the amount that could be paid into a pension scheme at a certain level of earnings, so that the proportion of earnings that could be tax-sheltered, and subject to a tax credit when paid into a pension scheme, would come to an end—at, if I remember rightly, an income of around £90,000 a year at present. That amount is indexed, and will rise year by year.
      Then there is the issue of carry-back. It is possible for people to catch up on years when they have made no contribution—no pension provision—and are unable to do so, up to a period of six years. Again, the Revenue has considered what is reasonable in such circumstances. It would certainly not be reasonable to say that there could be no such provision, and that all pension provision must be made in the current period. For one thing, that is not the way in which individuals work—especially the self-employed, whose earnings fluctuate from year to year. Furthermore, it would not be reasonable if the aim of new clause 11 is to protect creditors in bankruptcy.
      The Minister may be about to use the carry-back rules as an example of the way in which so-called excess contributions can be accumulated in the case of an approved scheme. If so, I must tell him that that is one of the perversities and foolishnesses into which he has a habit of falling through not thinking the issues through enough. He should consider what would happen if the principle were applied, and trustees were able to claw back amounts that had been paid into a pension scheme relating to previous years under the carry-back provisions. In fact, it would be necessary to ensure that everyone made the maximum pension contributions in the current year—which would mean that they would have to take more cash out of their businesses at the point in the cycle when their earnings were relatively lower than they would be at the present time.
      At present, the great advantage of the carry-back proposal is that it enables people to smooth the cashflow that they have in their businesses so that in difficult times, they need make no pension provision, knowing that they can make such provision subsequently. By smoothing their cashflow in that way, they reduce the likelihood of going broke in bad times. If the Minister creates a major deterrent for anyone wishing to use the carry-back

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      proposal by forcing all business men who want to make pension provisions to do so in the current year, he will create a perverse effect by depriving businesses of cashflow that they would otherwise have in difficult times. He will make them more vulnerable to failure.
      A provision that is being sold on the basis that it will protect creditors in bankruptcy will, in fact, cause more bankruptcies. That is pretty stupid. It is not the stupidest thing that the Government are doing, or even the stupidest thing that they are doing in this Bill; but it is pretty far down the scale of stupidity.
      8.15 pm
      Mr. Webb: Surely we are dealing here with priorities. Who will have the prior claim on the assets of a firm that has gone bankrupt? The hon. Gentleman seems to be saying that firms that are about to go bankrupt should be able to salt away what little money is left in years of retrospective pension contributions, rather than the creditors, who may themselves be small businesses on the brink of bankruptcy, having a prior claim.
      Mr. Davies: No; I am saying that if people are given an opportunity to make tax-sheltered contributions to a pension scheme, which we have always had in this country—or, at least, have had for so long that we cannot remember when we did not—they will do so as far as they can. Let us suppose that they are told that they need not do that every year on a regular basis: that they can still make full contributions up to the Revenue limits, and can smooth those contributions over time. If they find that at certain junctures they do not have the necessary cashflow to make the requisite contributions, they can do so later out of greater earnings.
      Otherwise, self-employed people might be liable for a fixed charge on their cashflow. They would say to themselves every year, "If I want to receive the benefit, I must take the money out now and put it in my pension scheme. I cannot leave it in the company; if I do, I shall have lost the chance of tax relief for ever." People would bring forward their pension contributions, and businesses would be deprived of cashflow, at times when it would be more logical to defer such contributions, in the interests of the health of business and thus in the interests of creditors.
      I do not know whether that will be one of the Government's excuses. I have racked my brains wondering how such a stupid proposal could be presented, and racked my brains again wondering why the Government are doing so in a way that I have already described as insulting to the House of Commons. It breaches what I would like to think of as elementary good faith between Government and Opposition in Committee. I like to think that, in Committee, the Government do not have in their back pocket, and will not subsequently produce, a proposal that negates everything implied in the clauses that are being dealt with.
      Surely, if we are to create a sensible balance, we must first ensure that no distinctions are made between different sorts of pension schemes in relation to tax and insolvency rules. The same rules should operate for everyone. As we agreed in Committee, the original Bill removed the anomaly created by the Landau case.
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      Secondly, we must make a clear distinction between approved and unapproved schemes. Where the Revenue has determined that a level of pension contribution is reasonable, by definition it must be reasonable; otherwise, Parliament made a mistake in authorising the rules in the first place.
      Thirdly—this is in clause 12 of the Bill, as passed in Committee—we should exercise more scepticism in relation to unapproved schemes, which may well provide opportunities for excessive amounts to be salted away. In those instances, there should be a provision for clawback, where necessary. Fourthly, we should ensure that there is a clear formula for determining the extent to which the clawback can take place, or the criteria by which the excess can be defined. Clause 12 says, basically, that a man may keep what is necessary for his own upkeep and that of his family; beyond that, the court may look to any excess contributions. That criterion, however, is missing from the new clause, which is open-ended.
      One of the many unfortunate consequences of accepting the new clause—which I hope the House will not do tonight—would be the creation of considerable uncertainty in an area in which I thought we were moving towards greater clarity.
      Mr. Webb: As I have said, I did not have the privilege of serving on the Committee that considered the Bill, so I apologise in advance for not having followed the detailed discussion on clauses 11 and 12 in the original Bill. However, my understanding is that those clauses provided for pension funds to be more secure in the event of bankruptcy, which seems, obviously, a step in the right direction. What appears to be represented in new clauses 11 and 12 is a recognition that that provision could be abused by excessive sheltering within pension funds immediately in anticipation of bankruptcy.
      It seems that a balance has to be struck between providing the protection that we would want for someone's pension assets when that person becomes bankrupt, and allowing that to become abused, so a lot hinges on the definition of "excess contributions". I may not have been paying full attention, but the Minister said that he was going to indicate what the criteria for excess contributions to be used by the courts were going to be. I did not emerge with a clear understanding of what those were.
      The hon. Member for Grantham and Stamford (Mr. Davies) queried whether contributions up to Inland Revenue limits, for example, could ever be regarded as excessive, either for a given year, or retrospectively. I should be grateful if the Minister would deal with that specific point. Indeed, the hon. Member for Surrey Heath (Mr. Hawkins) asked precisely that question and, I believe, wants to develop that point.
      I have some sympathy with the hon. Member for Grantham and Stamford with regard to the process by which we have arrived at new clauses 11 and 12. It is unacceptable that the Minister has been forced into a position of saying. "We did not have time to do the Scottish bits." That is not an acceptable way in which to put legislation before the Houses of Parliament. To be frank, it is worrying that we find ourselves in this situation in the first place.
      The new clauses that we are about to discuss relate to another last-minute Government attempt to close a tax loophole. My concern with all measures introduced in

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      haste is that they are not good legislation. Fast legislation is seldom good legislation, particularly in complex sectors such as pensions, taxation and insolvency.
      Therefore, I seek some reassurance from the Minister. 1 should be interested to know the parentage of the new clauses. How long have they been thought about? Where did they come from, essentially? Did the Government publish clause 11 and 12, receive representations from the people whose job it is to get round such clauses that they could get round, and realise that they needed to plug the loophole? How do they manage to find people whose job it is to get round such clauses who are willing to tell them that they have found a loophole, so that the Government can close it?
      I am intrigued to know the process by which we arrived at the new clauses. I hope that the Minister will be up-front with us, as he was in admitting that the Government had not got round to writing the Scottish bits. I hope that he will tell us how we came to have what is a sticking-plaster clause, which was put on so late in the process.
      On balance, we are reassured by the Minister's comment that, each year, only a handful of cases would fall foul of the new clause. Again, it will be interesting to know the basis of his belief that it will be a minority sport. He asserted that that was his estimate, but did not provide us with any basis for believing that.
      Mr. Quentin Davies: On experience, I think that the hon. Gentleman is wrong and is rash to rely on the assurances that he has just quoted. On the contrary, the open-endedness of new clause 11 could result in an enormous amount of litigation and avoidable gratuitous legal costs.
      Mr. Webb: I am grateful to the hon. Gentleman. I seek robust assurances from the Minister, which he will be held to, no doubt, by the electorate, among others, that vast swathes of legislation and litigation will not arise from the new clause.
      We understand the principle that the Minister clearly and simply expressed, but we have reservations about the definition of "excess", about whether contributions up to the limit would ever be regarded as excessive, and about whether the measure blows a hole in the protection that is being put around pension funds. In particular, Liberal Democrats are keen to know where the new clause comes from, and why the Government had not thought of it in advance; I presume that the matter was not raised in Committee.
      Therefore, I hope that the Minister can assure the House that the measure is carefully thought through, not rushed, and does not blow a hole in the principle that my hon. Friends have already accepted.
      Mr. Forsythe: I seek a little clarification from the Minister following what he said about including Northern Ireland in the Bill.
      The Bill refers specifically to Northern Ireland in a number of places. In clause 78(4), paragraphs (a) to (j) refer to Northern Ireland. In clause 78(5), paragraphs (a) to (d) do so. At the end of the Bill, where we have items that are to be deleted, a part refers to it.
      I do not wish to go out of order but, speaking on the general principle of the question and about whether the measure applied to Northern Ireland, the Minister gave a
      718
      general answer, which I understood that he would take advice about, that the Assembly would deal with the matter.
      I know that Scotland has not been included in the measure, and that has a devolved Administration in place. The same thing applies to Wales. Leaving aside the merits, or otherwise, of the discussion, as Northern Ireland does not yet have an Assembly in place to be able to bring laws in, I ask the Minister to think again. Perhaps he would take advice again about how the measure would apply to Northern Ireland, and why only some parts would apply.
      Mr. Hawkins: I am glad to have the opportunity to raise some particular concerns about the new clauses and amendments. The hon. Member for Northavon (Mr. Webb) referred to my intervention on the Minister. As well as adopting the sensible concerns that were expressed by my hon. Friend the Member for Grantham and Stamford (Mr. Davies), the Front-Bench spokesman, I say that my concern about the new clauses is that they get away from certainty, particularly where a marriage breaks down. I hope that the Minister will take seriously the concern of those who have conducted ancillary relief cases in the courts, that anything that removes the opportunity for the court to bring certainty at the conclusion of the litigation arising from a marriage is a dangerous matter.
      As well as having conducted family law cases in the courts for a number of years, I am deputy chairman of the all-party group on insurance and financial services. I am concerned at anything that waters down the distinction between approved and unapproved pension schemes, which is what my hon. Friend the Member for Grantham and Stamford suggested was happening. He posed the question how that came about: how it was that the Government should introduce and apparently agree in Committee the original clauses 11 and 12, and suddenly try to row back from them. The hon. Member for Northavon said that he wanted to know about the provenance of the new clause.
      The Minister will tell us in his reply whether he knows the answer to that question. However, my guess is that a bureaucrat somewhere in the Inland Revenue, at a very late stage, woke up to the implications of the original, and agreed, clauses 11 and 12, and suddenly said, "This is an opportunity for us to water down the distinction between approved and unapproved pension schemes." I guess, and fear, that that is the provenance of the sudden and undiscussed new clauses, which are undermining the original agreement in Committee.
      I think that it would be very unwise for the Government to pursue passage of new clauses 11 and 12 and their consequential amendments. If they do pursue them, they will be creating a time-bomb for courts dealing with ancillary relief cases when they have to deal with the sometimes very complex financial arrangements arising from a divorce.
      The Minister tried very quickly to gloss over the fact that, in certain cases, the trustee in bankruptcy will be able to go back to the spouse who did not originally have the pension scheme—in most cases, the wife—and perhaps to claw back, even from the wife, pension contributions for the trustee in bankruptcy if it is deemed by an ex post facto judgment that those pre-divorce pension scheme contributions were in some way excessive.

      719
      8.30 pm
      Unless the Minister is prepared to give the courts some guidance on how excessive contributions are to be defined, how are courts to decide the matter? The decision will not be at all easy for the courts, who are always anxious to protect the rights of both spouses after a divorce. Perhaps not many other hon. Members have dealt with very complex ancillary relief cases, as I did for a number of years. I am well aware that anything to do with the unscrambling of pension relief in ancillary relief cases arising from a divorce is already an exceptionally complex task for courts to perform.
      The one thing that courts always attempt to do is to provide certainty. As Hon. Members on both sides of the House will know, and as we have always said, when there is a divorce, the objective should be to achieve a clean break. The Government are now opening the scope for the trustee in bankruptcy, after all the pension contributions have been assessed, to come back and say, "I want to claw back some contributions that I think are excessive." The trustee may even be able, on divorce, to claw back some of the pension contributions made—in the typical case—by the husband from the wife's share of the estate. That may serve the objectives of some minor pettifogging official in the Revenue, but it is not the type of thing that courts want to be wrestling with. The Government, exceptionally unwisely, are opening a whole new can of worms.
      As my hon. Friend the Member for Grantham and Stamford said, the Government should have left intact the clear, understood and long-established distinction between approved and unapproved schemes, not try to water down the distinction or row back from what was agreed in Committee, simply to satisfy the desire of some official in the Revenue.
      Mr. Timms: I am pleased to assure the House that there has been no U-turn or somersault. Consequently, some of the strictures that we have heard have been inappropriate.
      I should like first to answer the question of the hon. Member for Northavon (Mr. Webb) on how the new clauses arose. As we have heard, the Pensions Act 1995 contained a statutory protection for occupational pensions in the event of bankruptcy. However, as a safeguard against abuse, section 95 of that Act provided that a court could order that contributions should be recovered from the pension fund if it could be shown that they were excessive. Therefore, that approach was a feature of the 1995 Act. However, the section was never commenced because it was technically defective.
      Subsequently, along came the Landau judgment—which we have heard about—highlighting the disparity between occupational and personal pensions. In its judgment, the High Court found that, in bankruptcy, pension rights in a retirement annuity contract vested in the trustee, thereby calling into question the security of rights in personal pensions. It is, indeed, the case that very many personal pensions are being seized in bankruptcy—hence the need for the original clauses 11 and 12, which were welcomed by Opposition Members.
      Therefore, since 1995, the intention has been that there should be such protection from abuse.
      The hon. Member for Grantham and Stamford (Mr. Davies) sometimes demonstrated a rather loose grasp on some of the Green Paper's detail. Nevertheless, I do not
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      think that it would be unkind to draw his attention to paragraph 49, on page 74 of the Green Paper, which states:
      "At the same time we need to prevent people from using a pension scheme to put money deliberately beyond the reach of their creditors. There will therefore be a mechanism to allow a court to order that excessive contributions paid into the scheme can be recovered from the pension fund".
      The Government have, therefore, always intended that there should be such a provision. The Green Paper made it clear that we would attempt to make such provision, and our intention was restated in the consultation document "Strengthening the Pensions Framework", which was published the day after publication of the Green Paper.
      Mr. Quentin Davies: Does the hon. Gentleman remember paragraph 48, on page 74—which he has just quoted—of the Green Paper, which states:
      "We therefore propose that all tax-approved private pension rights"—
      which, of course, means approved schemes—
      "should be exempt from the bankruptcy process, thus falling outside the jurisdiction of the trustee in bankruptcy"?
      That intention was duly enshrined in clause 11—which is now being reversed by new clause 11. The Minister can hardly deny that that is a somersault or a U-turn; he may choose whichever term he likes.
      Mr. Timms: It is neither. The following paragraph says that there needs to be a safeguard, as there was in the 1995 Act.
      The consultation period began on 16 December and concluded on 12 February. We have taken account of the results of that consultation in the new clauses and amendments. I assure the hon. Member for Northavon that we have pursued the issue carefully. Our intention has been clear since the publication of the Green Paper. We have consulted carefully and taken account of what was said to us. The new clauses and amendments are the result of that careful process.
      Mr. Davies: The hon. Gentleman talks about representations. Were the decisive representations—no doubt powerful, clever, effective lobbying—from lawyers and accountants specialising in insolvency? Insolvency practitioners are the only category of humanity to be greatly advantaged by the Government's U-turn this evening. Without the new clauses and amendments, the Bill would give complete security to members of approved schemes. There would be no ambiguity about their protection. Now all pensions—approved and unapproved—are up for grabs. The Government seem to have fallen for the representations—no doubt the biggest ones—from those with a direct commercial interest in such confusion in the legal system.
      Mr. Timms: The hon. Gentleman still has not grasped the point that I am urging on him. The 1995 Act contained a provision to safeguard against the same problem. We all agree that pensions should be protected from bankruptcy, but there has always been a requirement to guard against the possibility of people abusing that protection by making unduly large contributions to keep the money out of reach of their creditors. That would be a clear abuse. The previous Government introduced legislation to deal

      721
      with that, although sadly it was technically defective. We have followed along the same lines, but we are doing it properly.
      Mr. RendelI am getting a bit confused about the timing. We have heard time and again of the Government producing legislation before the end of the consultation period. In this case, the Government announced what they were going to do in a Green Paper and went through a consultation process that finished as early as February, yet in May we still do not have the legislation for Scotland before us even on Report. What on earth has gone wrong?
      Mr. TimmsThis is a technically complex matter and it has taken us some time to finalise the details. However, I assure the hon. Gentleman that our proposals fully reflect our very careful consultation.
      The hon. Member for Northavon asked for some assurances about the number of cases likely to arise. The experience of the Insolvency Service in dealing with bankruptcies shows that, in the stages before bankruptcy, most people do not have the money available to put into pension funds. Cases in which bankrupts seek to defeat their creditors in the period leading up to bankruptcy are the exception. There is clear evidence that the measures will not be needed in a large number of cases, but there will be some, so we need safeguards. The purpose of the measures is to deter.
      The hon. Members for Northavon and for Grantham and Stamford asked whether contributions could be regarded by a court as excessive if they were within the Inland Revenue rules. The answer is yes, that is possible. Clearly, someone making pension contributions must have regard to other debts and duties to creditors. It is possible—although not very likely—that a court could take the view that contributions were excessive if bankruptcy was approaching. I hope that that has clarified the point.
      The hon. Member for Grantham and Stamford asked for further clarification of the circumstances in which a court would regard contributions as excessive. As I have said, a court would need to take a view, first, on whether any contributions were made for the purpose of putting assets beyond the reach of creditors, and, secondly, on whether the total amount of contributions was excessive in view of the individual's circumstances when they were made. Again, the court would need to take a view on that. We are happy to leave the matter to the courts.
      The hon. Member for South Antrim (Mr. Forsythe) asked about the scope of the legislation in Northern Ireland. As he said, there are a number of references to Northern Ireland in the Bill. The majority of measures apply throughout Great Britain because they mainly deal with social security and pensions matters. Northern Ireland has a separate body of social security legislation and, in future, will be able to legislate separately on most social security and pensions matters.
      It will be for the new Assembly to decide whether to replicate the measures in the Bill to achieve parity in Northern Ireland. Our expectation is that the measures will be mirrored in Northern Ireland, but that will be a matter for the Assembly to decide. Some matters covered in the Bill are not dealt with separately in Northern Ireland because they do not come under the heading of social security legislation, and the hon. Member for South Antrim referred to some. However, it will be within the ability of the Assembly to amend those that do.
      722
      My right hon. Friend the Secretary of State for Northern Ireland was here when the hon. Gentleman raised that matter. I was pleased that she came in at that moment, and she will have heard his points.
      The amendments make the distinction between approved and unapproved schemes, and we are not blurring those distinctions. Given that we all agree that pensions savings should be protected in the event of bankruptcy—no one, either today or in Committee, has challenged that view—the question is whether there should be protection, and safeguards against the abuse of that protection. If people make large contributions into their pension scheme specifically to avoid and defeat their creditors when they know that bankruptcy is coming, should the legislation provide safeguards against such abuse? The previous Government took the view in the Pensions Act 1995 that it should—we take that view also. I would have thought that there would be consensus on that matter. On that basis, I commend the new clauses to the House.
      Mr. Duncan SmithI do not intend to detain the House, and I shall make a couple of brief points. I have never heard such a lot of nonsense from a Minister since coming to this House. We have a ridiculous position, with the Government including this measure late in the Bill. It was not proposed in Committee, but suddenly they have said that they must put it in as a matter of urgency. We have heard that the consultation was over by February, and now the Minister has admitted to the hon. Member for Newbury (Mr. Rendel) that excessive contributions might have been made under the Inland Revenue rules.
      There is confusion, and the Minister has hardly resolved anything. He admits that the Government have not had time to produce provisions for Scotland. I do not know what they have been doing all this time. It is an absolute outrage that the Bill is in a mess on Report and the Government cannot answer the questions, when the measures could have been included and properly discussed in Committee. That failure by the Government is an outrage.
      8.45 pm
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 415, Noes 138.

      Division No. 179]

      [8.45 pm

      AYES

      Abbott, Ms Diane

      Battle, John

      Adams, Mrs Irene (Paisley N)

      Bayley, Hugh

      Ainger, Nick

      Beard, Nigel

      Ainsworth, Robert (Covtry NE)

      Beckett, Rt Hon Mrs Margaret

      Alexander, Douglas

      Begg, Miss Anne

      Allan, Richard

      Beith, Rt Hon A J

      Allen, Graham

      Bell, Martin (Tatton)

      Anderson, Donald (Swansea E)

      Bell, Stuart (Middlesbrough)

      Anderson, Janet (Rossendale)

      Benn, Rt Hon Tony

      Armstrong, Rt Hon Ms Hilary

      Bennett, Andrew F

      Ashdown, Rt Hon Paddy

      Benton, Joe

      Ashton, Joe

      Bermingham, Gerald

      Atherton, Ms Candy

      Berry, Roger

      Atkins, Charlotte

      Best, Harold

      Austin, John

      Betts, Clive

      Ballard, Jackie

      Blears, Ms Hazel

      Banks, Tony

      Blizzard, Bob

      Barnes, Harry

      Blunkett, Rt Hon David

      Barron, Kevin

      Boateng, Paul

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      Borrow, David

      Dobbin, Jim

      Bradley, Keith (Withington)

      Donohoe, Brian H

      Bradley, Peter (The Wrekin)

      Doran, Frank

      Bradshaw, Ben

      Dowd, Jim

      Brake, Tom

      Drew, David

      Breed, Colin

      Drown, Ms Julia

      Brinton, Mrs Helen

      Dunwoody, Mrs Gwyneth

      Brown, Rt Hon Gordon

      Eagle, Angela (Wallasey)

      (Dunfermline E)

      Eagle, Maria (L'pool Garston)

      Brown, Russell (Dumfries)

      Edwards, Huw

      Browne, Desmond

      Efford, Clive

      Buck, Ms Karen

      Ellman, Mrs Louise

      Burden, Richard

      Ennis, Jeff

      Burgon, Colin

      Ewing, Mrs Margaret

      Burnett, John

      Field, Rt Hon Frank

      Burstow, Paul

      Fisher, Mark

      Butler, Mrs Christine

      Fitzpatrick, Jim

      Byers, Rt Hon Stephen

      Fitzsimons, Lorna

      Cable, Dr Vincent

      Flynn, Paul

      Campbell, Alan (Tynemouth)

      Follett, Barbara

      Campbell, Mrs Anne (C'bridge)

      Foster, Don (Bath)

      Campbell, Rt Hon Menzies

      Foster, Michael Jabez (Hastings)

      (NE Fife)

      Foster, Michael J (Worcester)

      Campbell, Ronnie (Blyth V)

      Foulkes, George

      Campbell-Savours, Dale

      Fyfe, Maria

      Canavan, Dennis

      Gapes, Mike

      Cann, Jamie

      Gardiner, Barry

      Caplin, Ivor

      George, Andrew (St Ives)

      Casale, Roger

      George, Bruce (Walsall S)

      Caton, Martin

      Gerrard, Neil

      Cawsey, Ian

      Gibson, Dr Ian

      Chapman, Ben (Wirral S)

      Godman, Dr Norman A

      Chaytor, David

      Godsiff, Roger

      Clapham, Michael

      Goggins, Paul

      Clark, Rt Hon Dr David (S Shields)

      Gordon, Mrs Eileen

      Clark, Paul (Gillingham)

      Gorrie, Donald

      Clarke, Charles (Norwich S)

      Griffiths, Jane (Reading E)

      Clarke, Eric (Midlothian)

      Griffiths, Win (Bridgend)

      Clarke, Rt Hon Tom (Coatbridge)

      Grocott, Bruce

      Clarke, Tony (Northampton S)

      Grogan, John

      Clelland, David

      Gunnell, John

      Clwyd, Ann

      Hain, Peter

      Coaker, Vernon

      Hall, Mike (Weaver Vale)

      Coffey, Ms Ann

      Hall, Patrick (Bedford)

      Cohen, Harry

      Hamilton, Fabian (Leeds NE)

      Coleman, Iain

      Hancock, Mike

      Colman, Tony

      Hanson, David

      Connarty, Michael

      Harman, Rt Hon Ms Harriet

      Corbett, Robin

      Harvey, Nick

      Corbyn, Jeremy

      Heal, Mrs Sylvia

      Corston, Ms Jean

      Healey, John

      Cotter, Brian

      Heath, David (Somerton & Frome)

      Cousins, Jim

      Henderson, Doug (Newcastle N)

      Cox, Tom

      Henderson, Ivan (Harwich)

      Cranston, Ross

      Hepburn, Stephen

      Crausby, David

      Heppell, John

      Cryer, John (Hornchurch)

      Hesford, Stephen

      Cummings, John

      Hewitt, Ms Patricia

      Cunningham, Rt Hon Dr Jack

      Hill, Keith

      (Copeland)

      Hinchliffe, David

      Cunningham, Jim (Cov'try S)

      Hodge, Ms Margaret

      Cunningham, Ms Roseanna

      Hoey, Kate

      (Perth)

      Home Robertson, John

      Curtis-Thomas, Mrs Claire

      Hood, Jimmy

      Dafis, Cynog

      Hoon, Geoffrey

      Dalyell, Tam

      Hope, Phil

      Darling, Rt Hon Alistair

      Hopkins, Kelvin

      Darvill, Keith

      Howarth, Alan (Newport E)

      Davey, Valerie (Bristol W)

      Howarth, George (Knowsley N)

      Davidson, Ian

      Howells, Dr Kim

      Davies, Rt Hon Denzil (Llanelli)

      Hoyle, Lindsay

      Davies, Geraint (Croydon C)

      Hughes, Ms Beverley (Stretford)

      Dawson, Hilton

      Hughes, Kevin (Doncaster N)

      Dean, Mrs Janet

      Humble, Mrs Joan

      Denham, John

      Hurst, Alan

      Dismore, Andrew

      Hutton, John

      724

      Iddon, Dr Brian

      Marshall-Andrews, Robert

      Illsley, Eric

      Martlew, Eric

      Ingram, Rt Hon Adam

      Maxton, John

      Jackson, Ms Glenda (Hampstead)

      Meacher, Rt Hon Michael

      Jackson, Helen (Hillsborough)

      Meale, Alan

      Jenkins, Brian

      Merron, Gillian

      Johnson, Alan (Hull W & Hessle)

      Michael, Rt Hon Alun

      Johnson, Miss Melanie

      Michie, Bill (Shefld Heeley)

      (Welwyn Hatfield)

      Michie, Mrs Ray (Argyll & Bute)

      Jones, Barry (Alyn & Deeside)

      Milburn, Rt Hon Alan

      Jones, Mrs Fiona (Newark)

      Miller, Andrew

      Jones, Helen (Warrington N)

      Mitchell, Austin

      Jones, leuan Wyn (Ynys Môn)

      Moffatt, Laura

      Jones, Ms Jenny

      Moonie, Dr Lewis

      (Wolverh'ton SW)

      Moore, Michael

      Jones, Jon Owen (Cardiff C)

      Moran, Ms Margaret

      Jones, Dr Lynne (Selly Oak)

      Morgan, Alasdair (Galloway)

      Jones, Marlyn (Clwyd S)

      Morgan, Ms Julie (Cardiff N)

      Jones, Nigel (Cheltenham)

      Morley, Elliot

      Jowell, Rt Hon Ms Tessa

      Morris, Ms Estelle (B'ham Yardley)

      Kaufman, Rt Hon Gerald

      Morris, Rt Hon John (Aberavon)

      Keeble, Ms Sally

      Mountford, Kali

      Keen, Alan (Feltham & Heston)

      Mowlam, Rt Hon Marjorie

      Keen, Ann (Brentford & Isleworth)

      Mudie, George

      Keetch, Paul

      Mullin, Chris

      Kelly, Ms Ruth

      Murphy, Denis (Wansbeck)

      Kemp, Fraser

      Murphy, Jim (Eastwood)

      Khabra, Piara S

      Naysmith, Dr Doug

      Kidney, David

      Norris, Dan

      Kilfoyle, Peter

      Oaten, Mark

      King, Andy (Rugby & Kenilworth)

      O'Brien, Bill (Normanton)

      King, Ms Oona (Bethnal Green)

      O'Hara, Eddie

      Kingham, Ms Tess

      Olner, Bill

      Kirkwood, Archy

      O'Neill, Martin

      Kumar, Dr Ashok

      Öpik, Lembit

      Ladyman, Dr Stephen

      Organ, Mrs Diana

      Lawrence, Ms Jackie

      Osborne, Ms Sandra

      Laxton, Bob

      Pearson, Ian

      Lepper, David

      Pendry, Tom

      Leslie, Christopher

      Perham, Ms Linda

      Levitt, Tom

      Pickthall, Colin

      Lewis, Ivan (Bury S)

      Pike, Peter L

      Lewis, Terry (Worsley)

      Plaskitt, James

      Liddell, Rt Hon Mrs Helen

      Pollard, Kerry

      Linton, Martin

      Pond, Chris

      Livsey, Richard

      Pope, Greg

      Lloyd, Tony (Manchester C)

      Pound, Stephen

      Llwyd, Elfyn

      Powell, Sir Raymond

      Lock, David

      Prentice, Ms Bridget (Lewisham E)

      Love, Andrew

      Prentice, Gordon (Pendle)

      McAllion, John

      Primarolo, Dawn

      McAvoy, Thomas

      Prosser, Gwyn

      McCabe, Steve

      Purchase, Ken

      McCafferty, Ms Chris

      Quinn, Lawrie

      McCartney, Rt Hon Ian

      Radice, Giles

      (Makerfield)

      Rammell, Bill

      McDonagh, Siobhain

      Rapson, Syd

      Macdonald, Calum

      Raynsford, Nick

      McDonnell, John

      Reid, Rt Hon Dr John (Hamilton N)

      McFall, John

      Rendel, David

      McGuire, Mrs Anne

      Robertson, Rt Hon George

      McIsaac, Shona

      (Hamilton S)

      McKenna, Mrs Rosemary

      Robinson, Geoffrey (Cov'try NW)

      Mackinlay, Andrew

      Roche, Mrs Barbara

      Maclennan, Rt Hon Robert

      Rooker, Jeff

      McNamara, Kevin

      McNulty, Tony

      MacShane, Denis

      Mactaggart, Fiona

      McWalter, Tony

      Mahon, Mrs Alice

      Mallaber, Judy

      Mandelson, Rt Hon Peter

      Marsden, Gordon (Blackpool S)

      Marsden, Paul (Shrewsbury)

      Marshall, David (Shettleston)

      725

      Rooney, Terry

      Taylor, Rt Hon Mrs Ann

      Ross, Ernie (Dundee W)

      (Dewsbury)

      Rowlands, Ted

      Taylor, Ms Dari (Stockton S)

      Roy, Frank

      Taylor, Matthew (Truro)

      Ruane, Chris

      Temple-Morris, Peter

      Ruddock, Joan

      Thomas, Gareth (Clwyd W)

      Russell, Bob (Colchester)

      Thomas, Gareth R (Harrow W)

      Russell, Ms Christine (Chester)

      Timms, Stephen

      Ryan, Ms Joan

      Tipping, Paddy

      Salter, Martin

      Todd, Mark

      Sanders, Adrian

      Touhig, Don

      Sarwar, Mohammad

      Trickett, Jon

      Savidge, Malcolm

      Truswell, Paul

      Sawford, Phil

      Turner, Dennis (Wolverh'ton SE)

      Sedgemore, Brian

      Turner, Dr Desmond (Kemptown)

      Shaw, Jonathan

      Turner, Dr George (NW Norfolk)

      Sheldon, Rt Hon Robert

      Twigg, Derek (Halton)

      Short, Rt Hon Clare

      Twigg, Stephen (Enfield)

      Simpson, Alan (Nottingham S)

      Tyler, Paul

      Singh, Marsha

      Vaz, Keith

      Skinner, Dennis

      Vis, Dr Rudi

      Smith, Rt Hon Andrew (Oxford E)

      Walley, Ms Joan

      Smith, Angela (Basildon)

      Ward, Ms Claire

      Smith, Rt Hon Chris (Islington S)

      Wareing, Robert N

      Smith, Miss Geraldine

      Watts, David

      (Morecambe & Lunesdale)

      Webb, Steve

      Smith, Jacqui (Redditch)

      White, Brian

      Smith, John (Glamorgan)

      Whitehead, Dr Alan

      Smith, Llew (Blaenau Gwent)

      Wicks, Malcolm

      Smith, Sir Robert (W Abdns)

      Wigley, Rt Hon Dafydd

      Snape, Peter

      Williams, Rt Hon Alan

      Soley, Clive

      (Swansea W)

      Southworth, Ms Helen

      Williams, Alan W (E Carmarthen)

      Spellar, John

      Williams, Mrs Betty (Conwy)

      Squire, Ms Rachel

      Willis, Phil

      Starkey, Dr Phyllis

      Wills, Michael

      Steinberg, Gerry

      Wilson, Brian

      Stevenson, George

      Winnick, David

      Stewart, David (Inverness E)

      Winterton, Ms Rosie (Doncaster C)

      Stinchcombe, Paul

      Wise, Audrey

      Stoate, Dr Howard

      Wood, Mike

      Stott, Roger

      Woolas, Phil

      Strang, Rt Hon Dr Gavin

      Worthington, Tony

      Straw, Rt Hon Jack

      Wright, Anthony D (Gt Yarmouth)

      Stringer, Graham

      Wright, Dr Tony (Cannock)

      Stuart, Ms Gisela

      Wyatt, Derek

      Stunell, Andrew

      Tellers for the Ayes:

      Sutcliffe, Gerry

      Mr. David Jamieson and

      Swinney, John

      Jane Kennedy.

      NOES

      Amess, David

      Clark, Rt Hon Alan (Kensington)

      Ancram, Rt Hon Michael

      Clark, Dr Michael (Rayleigh)

      Arbuthnot, Rt Hon James

      Clifton-Brown, Geoffrey

      Atkinson, Peter (Hexham)

      Colvin, Michael

      Beggs, Roy

      Cormack, Sir Patrick

      Bercow, John

      Cran, James

      Beresford, Sir Paul

      Curry, Rt Hon David

      Blunt, Crispin

      Davies, Quentin (Grantham)

      Body, Sir Richard

      Davis, Rt Hon David (Haltemprice

      Boswell, Tim

      & Howden)

      Bottomley, Peter (Worthing W)

      Day, Stephen

      Bottomley, Rt Hon Mrs Virginia

      Donaldson, Jeffrey

      Brady, Graham

      Duncan, Alan

      Brazier, Julian

      Duncan Smith, lain

      Brooke, Rt Hon Peter

      Evans, Nigel

      Browning, Mrs Angela

      Faber, David

      Burns, Simon

      Fabricant, Michael

      Butterfill, John

      Fallon, Michael

      Cash, William

      Forsythe, Clifford

      Chapman, Sir Sydney

      Forth, Rt Hon Eric

      (Chipping Barnet)

      Fox, Dr Liam

      Chope, Christopher

      Fraser, Christopher

      Clappison, James

      Gale, Roger

      Gibb, Nick

      726

      Gill, Christopher

      Paice, James

      Gillan, Mrs Cheryl

      Paterson, Owen

      Goodlad, Rt Hon Sir Alastair

      Pickles, Eric

      Gorman, Mrs Teresa

      Prior, David

      Gray, James

      Randall, John

      Green, Damian

      Redwood, Rt Hon John

      Greenway, John

      Robathan, Andrew

      Grieve, Dominic

      Robertson, Laurence (Tewk'b'ry)

      Gummer, Rt Hon John

      Roe, Mrs Marion (Broxbourne)

      Hague, Rt Hon William

      Rowe, Andrew (Faversham)

      Hamilton, Rt Hon Sir Archie

      Ruffley, David

      Hammond, Philip

      St Aubyn, Nick

      Hawkins, Nick

      Sayeed, Jonathan

      Hayes, John

      Shephard, Rt Hon Mrs Gillian

      Heald, Oliver

      Simpson, Keith (Mid-Norfolk)

      Heathcoat-Amory, Rt Hon David

      Smyth, Rev Martin (Belfast S)

      Hogg, Rt Hon Douglas

      Soames, Nicholas

      Horam, John

      Spicer, Sir Michael

      Howarth, Gerald (Aldershot)

      Spring, Richard

      Hunter, Andrew

      Stanley, Rt Hon Sir John

      Jack, Rt Hon Michael

      Streeter, Gary

      Jenkin, Bernard

      Swayne, Desmond

      Key, Robert

      Syms, Robert

      King, Rt Hon Tom (Bridgwater)

      Tapsell, Sir Peter

      Laing, Mrs Eleanor

      Taylor, Ian (Esher & Walton)

      Lait, Mrs Jacqui

      Taylor, Rt Hon John D (Strangford)

      Lansley, Andrew

      Taylor, Sir Teddy

      Leigh, Edward

      Thompson, William

      Letwin, Oliver

      Townend, John

      Lewis, Dr Julian (New Forest E)

      Tredinnick, David

      Lidington, David

      Trend, Michael

      Loughton, Tim

      Trimble, Rt Hon David

      Lloyd, Rt Hon Sir Peter (Fareham)

      Tyrie, Andrew

      Luff, Peter

      Viggers, Peter

      Lyell, Rt Hon Sir Nicholas

      Walter, Robert

      MacGregor, Rt Hon John

      Wardle, Charles

      McIntosh, Miss Anne

      Waterson, Nigel

      MacKay, Rt Hon Andrew

      Wells, Bowen

      McLoughlin, Patrick

      Whitney, Sir Raymond

      Madel, Sir David

      Whittingdale, John

      Major, Rt Hon John

      Willetts, David

      Maples, John

      Wilshire, David

      Mates, Michael

      Woodward, Shaun

      Mawhinney, Rt Hon

      Sir Brian

      May, Mrs Theresa

      Yeo, Tim

      Moss, Malcolm

      Young, Rt Hon Sir George

      Nicholls, Patrick

      Tellers for the Noes:

      Page, Richard

      Mr. Tim Collins and

      Mr. John M. Taylor.

      Question accordingly agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 12

      EXCESSIVE PENSION CONTRIBUTIONS MADE BY PERSONS WHO HAVE BECOME INSOLVENT: SCOTLAND
      `. For sections 36A to 36C of the Bankruptcy (Scotland) Act 1985 there shall be substituted—
      "Recovery of excessive pension contributions
      36A.—(1) Where a debtor's estate has been sequestrated and he—

      (a) has rights under an approved pension arrangement, or

      (b) has excluded rights under an unapproved pension arrangement,

      the permanent trustee may apply to the court for an order under this section.
      (2) If the court is satisfied—

      (a) that the rights under the arrangement are to any extent, and whether directly or indirectly, the fruits of relevant contributions, and

      (b) that the making of any of the relevant contributions ("the excessive contributions") has unfairly prejudiced the debtor's creditors,

      the court may make such order as it thinks fit for restoring the position to what it would have been had the excessive contributions not been made.
      (3) Subsection (4) applies where the court is satisfied that the value of the rights under the arrangement is, as a result of rights of the debtor under the arrangement or any other pension arrangement having at any time become subject to a debit under section 23(1)(a) of the Welfare Reform and Pensions Act 1999 (debits giving effect to pension-sharing), less than it would otherwise have been.
      (4) Where this subsection applies—

      (a) any relevant contributions which were represented by the rights which became subject to the debit shall, for the purposes of subsection (2), be taken to be contributions of which the rights under the arrangement are the fruits, and

      (b) where the relevant contributions represented by the rights under the arrangement (including those so represented by virtue of paragraph (a)) are not all excessive contributions, relevant contributions which are represented by the rights under the arrangement otherwise than by virtue of paragraph (a) shall be treated as excessive contributions before any which are so represented by virtue of that paragraph.

      (5) In subsections (2) to (4) "relevant contributions" means contributions to the arrangement or any other pension arrangement—

      (a) which the debtor has at any time made on his own behalf, or

      (b) which have at any time been made on his behalf.

      (6) The court shall, in determining whether it is satisfied under subsection (2)(b), consider in particular—

      (a) whether any of the contributions were made for the purpose of putting assets beyond the reach of the debtor's creditors or any of them, and

      (b) whether the total amount of any contributions—

      (i) made by or on behalf of the debtor to pension arrangements, and

      (ii) represented (whether directly or indirectly) by rights under approved pension arrangements or excluded rights under unapproved pensions arrangements,

      is an amount which is excessive in view of the debtor's circumstances when those contributions were made.
      (7) For the purposes of this section and sections 36B and 36C ("the recovery provisions"), rights of a debtor under an unapproved pension arrangement are excluded rights if they are rights which are excluded from his estate by virtue of regulations under section 12 of the Welfare Reform and Pensions Act 1999.
      (8) In the recovery provisions—

      "approved pension arrangement" has the same meaning as in section 11 of the Welfare Reform and Pensions Act 1999;

      "unapproved pension arrangement" has the same meaning as in section 12 of that Act.

      Orders under section 36A
      36B.—(1) Without prejudice to the generality of section 36A(2) an order under section 36A may include provision—

      (a) requiring the person responsible for the arrangement
      to pay an amount to the debtor's permanent trustee,

      728

      (b) adjusting the liabilities of the arrangement in respect of the debtor,

      (c) adjusting any liabilities of the arrangement in respect of any other person that derive, directly or indirectly, from rights of the debtor under the arrangement,

      (d) for the recovery by the person responsible for the arrangement (whether by deduction from any amount which that person is ordered to pay or otherwise) of costs incurred by that person in complying in the debtor's case with any requirement under section 36C(1) or in giving effect to the order.

      (2) In subsection (1), references to adjusting the liabilities of the arrangement in respect of a person include (in particular) reducing the amount of any benefit or future benefit to which that person is entitled under the arrangement.
      (3) In subsection (1)(c), the reference to liabilities of the arrangement does not include liabilities in respect of a person which result from giving effect to an order or provision falling within section 22(1) of the Welfare Reform and Pensions Act 1999 (pension sharing orders and agreements).
      (4) The maximum amount which the person responsible for an arrangement may be required to pay by an order under section 36A is the lesser of—

      (a) the amount of the excessive contributions. And

      (b) the value of the debtor's rights under the arrangement (if the arrangement is an approved pension arrangement) or of his excluded rights under the arrangement (if the arrangement is an unapproved pension arrangement).

      (5) An order under section 36A which requires the person responsible for an arrangement to pay an amount ("the restoration amount") to the debtor's permanent trustee must provide for the liabilities of the arrangement to be correspondingly reduced.
      (6) For the purposes of subsection (5), liabilities are correspondingly reduced if the difference between—

      (a) the amount of the liabilities immediately before the reduction, and

      (b) the amount of the liabilities immediately after the reduction,
      is equal to the restoration amount.

      (7) An order under section 36A in respect of an arrangement—

      (a) shall be binding on the person responsible for the arrangement; and

      (b) overrides provisions of the arrangement to the extent that they conflict with the provisions of the order.

      Orders under section 36A: supplementary
      36C.—(1) The person responsible for—

      (a) an approved pension arrangement under which a debtor has rights,

      (b) an unapproved pension arrangement under which a debtor has excluded rights, or

      (c) a pension arrangement under which a debtor has at any time had rights,

      shall, on the debtor's permanent trustee making a written request, provide the permanent trustee with such information about the arrangement and rights as the permanent trustee may reasonably require for, or in connection with, the making of applications under section 36A.
      (2) Nothing in—

      (a) any provision of section 159 of the Pensions Schemes Act 1993 or section 91 of the Pensions Act 1995

      729
      (which prevent assignation and the making of orders which restrain a person from receiving anything which he is prevented from assigning),

      (b) any provision of any enactment (whether passed or made before or after the passing of the Welfare Reform and Pensions Act 1999) corresponding to any of the provisions mentioned in paragraph (a), or

      (c) any provision of the arrangement in question corresponding to any of those provisions,

      applies to a court exercising its powers under section 36A.
      (3) Where any sum is required by an order under section 36A to be paid to the permanent trustee, that sum shall be comprised in the debtor's estate.
      (4) Regulations may, for the purposes of the recovery provisions, make provision about the calculation and verification of—

      (a) any such value as is mentioned in section 36B(4)(b);

      (b) any such amounts as are mentioned in section 36B(6)(a) and (b).

      (5) The power conferred by subsection (4) includes power to provide for calculation or verification—

      (a) in such manner as may, in the particular case, be approved by a prescribed person; or

      (b)in accordance with guidance—

      (i) from time to time prepared by a prescribed person, and

      (ii) approved by the Secretary of State.

      (6) References in the recovery provisions to the person responsible for a pension arrangement are to

      (a) the trustees, managers or provider of the arrangement, or

      (b) the person having functions in relation to the arrangement corresponding to those of a trustee, manager or provider.

      (7) In this section and sections 36A and 36B—

      "the recovery provisions" means this section and sections 36A and 36B;

      "regulations" means regulations made by the Secretary of State.

      (8) Regulations under the recovery provisions may contain such incidental, supplemental and transitional provisions as appear to the Secretary of State necessary or expedient."'.—[Mr. Andrew Smith.]
      Brought up, read the First and Second time, and added to the Bill.

    New Clause 15

      EARNINGS OF WORKERS SUPPLIED BY SERVICE COMPANIES ETC.
      `. After section 4 of the Contributions and Benefits Act there shall be inserted—
      "Earnings of workers supplied by service companies etc
      4A—(1) Regulations may make provision for securing that where—

      (a) an individual ("the worker") in any specified circumstances personally performs, or is under an obligation personally to perform, services for the purposes of a business carried on by another person ("the client"), and

      (b) the performance of those services by the worker is (within the meaning of the regulations) referable to a contract between the client and a third party,

      relevant payments or benefits are, to the specified extent, to be treated for the purposes of the applicable provisions of this Act as earnings paid to the worker in respect of an employed earner's employment of his (where they would not be such earnings apart from the regulations).
      (2) Subsection (1) above applies—

      (a) whether or not the client is a person with whom the worker holds any office or employment; and

      (b) whether or not there is any contract between the third party and the worker.

      (3) Regulations under this section may, in particular, make provision—

      (a) for the worker to be treated for the purposes of the applicable provisions of this Act, in relation to relevant payments or benefits, as employed in employed earner's employment by the client;

      (b) for the client to be treated for those purposes as the secondary contributor in respect of any earnings which are treated as paid to the worker in connection with relevant payments or benefits;

      (c) for determining—

      (i) any deductions to be made, and

      (ii) in other respects the manner and basis in and on which the amount of earnings that the worker is to be treated as having been paid for any period is to be calculated or estimated, in connection with relevant payments or benefits;

      (d) for apportioning payments or benefits of any specified description, in such manner or on such basis as may be specified, for the purpose of determining the part of any such payment or benefit which is to be treated as a relevant payment or benefit for the purposes of the regulations;

      (e) for disregarding for the purposes of the applicable provisions of this Act, in relation to relevant payments or benefits, an employed earner's employment in which the worker is employed (whether by the third party or otherwise) to perform the services in question;

      (f) for otherwise securing that a double liability to pay any amount by way of a contribution of any description does not arise in relation to a particular payment or benefit or (as the case may be) a particular part of a payment or benefit;

      (g) for securing that, to the specified extent, two or more connected persons (within the meaning of section 839 of the Income and Corporation Taxes Act 1988) are treated as a single person for any purposes of the regulations;

      (h) (without prejudice to paragraph (g) above) for securing that a contract made with a person other than the client is to be treated for any such purposes as made with the client;

      (i) for excluding or modifying the application of the regulations in relation to such cases, or payments or benefits of such description, as may be specified.

      (4) Regulations under this section may make provision for securing that, in applying any provisions of the regulations, any term of a contract or other arrangement which appears to be of a description specified in the regulations is to be disregarded.
      (5) Any regulations made in pursuance of subsection (3)(i) above may be framed by reference to—

      (a) any certification procedure which may be established by the Treasury for the purposes of that provision, or

      (b) such certification procedure established by the Inland Revenue as may be specified;

      and any regulations made in pursuance of section 2(2) above or section 7(2) below may also be framed by reference to any certification procedure such as is mentioned in paragraph (a) or (b) above.
      (6) In this section—
      "the applicable provisions of this Act" means this Part of this Act and Parts II to V below;
      "business" includes any activity carried on—

      (a) by a government department or public or local authority (in the United Kingdom or elsewhere), or

      (b) by a body corporate, unincorporated body or partnership;

      "relevant payments or benefits" means payments or benefits of any specified description made or provided (whether to the third party or the worker or otherwise) in connection with the performance by the worker of the services in question;
      "specified" means prescribed by or determined in accordance with regulations under this section;
      "third party" includes—

      (a) any person with whom the worker holds any office or employment, and

      (b) any body corporate, unincorporated body or partnership of which the worker is a member.

      (7) Any reference in this section to the performance by the worker of any services includes a reference to any such obligation of his to perform them as is mentioned in subsection (1)(a) above.
      (8) Regulations under this section shall be made by the Treasury with the concurrence of the Secretary of State.
      (9) If, on any modification of the statutory provisions relating to income tax it appears to the Treasury to be expedient to modify any of the preceding provisions of this section for the purpose of assimilating the law relating to income tax and the law relating to contributions under this Part of this Act, the Treasury may with the concurrence of the Secretary of State by order make such modifications of the preceding provisions of this section as the Treasury think appropriate for that purpose."'.—[Mr. Timms.]
      Brought up, and read the First time.
      9 pm
      Mr. TimmsI beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Alan Haselhurst)With this, it will be convenient to discuss the following: Government new clause 16—Earnings of workers supplied by service companies etc: Northern Ireland.
      Government amendments Nos. 108, 109, 111, 112, 107 and 110.
      Mr. TimmsWhere businesses hire workers through an intermediary, such as a service company, rather than employing them directly, it is possible to disguise what would otherwise be treated as employment. In that way, they can reduce the national insurance that they would otherwise pay, or even eliminate it entirely. That is clearly wrong.
      The service companies are given an unfair advantage over businesses who have their staff on the payroll, and there is a growing loss of revenue to the national insurance fund, which has to be made good by workers and employers who pay their fair share. There are around 50,000 service companies, and their numbers are increasing.
      That is why, in his Budget statement this year, my right hon. Friend the Chancellor of the Exchequer announced that he would close the loophole, and that the national insurance and tax rules would be changed from April 2000. New clause 15, and the amendments that go
      732
      with it, will make the necessary change to national insurance legislation. The clause gives the Inland Revenue the powers to make sure that those who disguise employment will pay the same contributions as if they employed their workers direct. New clause 16 provides the same powers for Northern Ireland.
      Parallel changes will be made to tax law in next year's Finance Act to ensure that businesses will also be required to operate pay-as-you-earn. However, we need to ensure that the appropriate revenue is collected with the least burden to business. In April, the Inland Revenue sent draft guidance on how the proposal will work to all who had expressed interest in the Budget announcement and to their representative associations. The Revenue will shortly meet representatives of those bodies. Their feedback will be valuable in finalising the regulations that result from this clause.
      In the meantime, I will explain how we intend the power to work. The new clause will allow the Revenue to draw up tests, set out in regulations, which it can use to examine the relationship between a business and a hired worker. The key element of the test will be the degree of control the employer has over the worker. This uses the control test already successfully used to determine whether an employment agency should be treated as the employer for the purposes of liability to pay class 1 N1Cs.
      The question to be asked is:
      "Has the employer ongoing control over what tasks the worker does or how they are carried out?"
      If the answer is yes, the arrangement will be caught by the new rules and any earnings will be subject to class 1 contributions. Alternatively, where a worker is engaged to complete a job and has total control over the manner in which the task is undertaken and the way in which it is achieved, the relationship will be outside the scope of the new rules.
      It may be helpful if I give two examples illustrating the scope of these new rules. First, a doctor comes to work in the United Kingdom for two years. She is engaged by a hospital through a UK service company. The consultant in charge directs the doctor as to what work she should do, has ultimate clinical responsibility for the patients and can supervise the doctor in the performance of her duties. This arrangement should be caught by the new rules. Responsibility for paying class 1 NICs and introducing PAYE would lie with the hospital.
      In the second example, an information technology engineer employed by a medium-sized manufacturing company decides to go it alone, leaving employment to set up his own IT consultancy. A few weeks later, the former employer engages the consultant to undertake a millennium bug health check on all the computer company's systems. The consultant negotiates a fixed fee providing a specified service to a pre-determined deadline. The company has no on-going right of control over exactly what is done by the consultant or how it is done. The new rules will not apply in that case.
      The measure is intended to remove a significant fiscal disadvantage faced by businesses that employ their workers directly. The clause will ensure that where a worker is engaged by a business through a third party, such as a service company, and that relationship has the characteristics of employment, any payments made by

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      the business to the third party for the worker's services will be regarded as the worker's earnings for national insurance purposes.
      Mr. Christopher Chope:In the first example, would the hospital be responsible for sickness pay for that worker in the event that he or she fell sick?
      Mr. TimmsThe hospital will certainly be responsible for paying national insurance for the worker. My assumption is that the answer to the hon. Gentleman's question is yes. If, on further reflection, that turns out not to be the case, I will return to the matter.
      The new clause is not intended to remove the benefits that many businesses derive from the use of employment agencies for a supply of labour. Demands for workers can fluctuate, depending on the order book. Employment agencies have a crucial role in helping business cover such fluctuations.
      Under existing legislation, the agency that supplies the worker, and not the client, is liable for any tax and national insurance payable on the worker's earnings. The worker is regarded as an employee of the agency, which must set up a pay-as-you-earn arrangement and ensure that the necessary class 1 contributions are deducted for any earnings, as well as paying those secondary class 1 contributions as an employer. We have no wish to reverse that arrangement and the clause will not do so.
      Indeed, subsection (3) allows exemptions from the provision to deal with that issue. For example, if the worker is regarded for income tax purposes as employed by a "certified" agency, and the services are performed by the worker in the course of that employment, the clause does not bite. A business need seek confirmation only that a worker is supplied from a certified agency to be assured that it is not liable for any tax and national insurance on that worker' s earnings.
      The Inland Revenue will be responsible for running the certification scheme.
      Mr. Desmond Swayne: What confidence can the House have that the regulations will work in the way in which the Minister described, given that new clause 15 (9) states that any change to income tax provisions may trigger the complete rewriting of the new clause?
      Mr. Timms:We need to ensure that the tax and national insurance rules are in line. The subsection to which the hon. Gentleman referred would allow us to ensure that the two are absolutely aligned. The reduction of burdens on business, and ensuring that we have one system rather than two for businesses to deal with, have been our objectives in changing the way in which national insurance is administered.
      The essence of the certification scheme is that the agency that supplies the worker will take responsibility for setting up pay-as-you-earn arrangements and paying class 1 national insurance contributions for all the workers on its books. As well as established agencies, other providers of labour are likely to wish to seek certification through the new Inland Revenue scheme.
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      I have already mentioned that similar provisions are being introduced in the next Finance Bill. It is crucial that from next April both tax and national insurance be aligned on this issue; otherwise business will face the burden of operating two systems.
      Mrs. Browning:Will the Minister clarify one of his examples? He mentioned that one test of whether someone was under the control of the contracting company or organisation was that it set out exactly the work to be done, which was carried out entirely according to its criteria. Let us suppose that a company carried out a series of short-term contracts in any one financial year—perhaps, two, three, four or five weeks at a time. Realistically, it could be expected to carry out only one contract at a time, but in the course of a year several contracting companies might be used. I should have thought that although the worker concerned might be conforming with the stipulations of a contract, if he or she worked for a variety of employers, for want of a better word, in one financial year, a good case could be made with the Inland Revenue under existing rules. Does this rule affect every case or apply only when employees can prove within a financial year that they have worked for a series of people?
      Mr. Timms:The judgment would need to be made for each separate employment. Where one person works for a series of different employers, the judgment would need to be made about each employment. If it was a series of contracts with a single employer, I think that it would be necessary to consider the whole period of work and judge the nature of the relationship over that time.
      We need to ensure fair treatment for those engaged directly and those engaged on otherwise equivalent but indirect terms.
      Sir Robert Smith:New clause 15 gives power to make regulations. Has the Minister published the draft regulations so that we can judge whether he needs the powers? If they do not make sense, there is no point in having the powers.
      Mr. Timms:There is no question but that we need the powers. This is a serious loophole. [HON. MEMBERS: "Ah."] The Conservative party was never interested in loopholes and did nothing to plug them. This loophole needs plugging. Large sums of money are at stake, so we need the power.
      We have not published the regulations yet, but there will be extensive discussion between the Inland Revenue, those who responded to the document and representative organisations. We need extensive discussions to ensure that the regulations are framed correctly and to avoid difficulties. There will be a meeting shortly to take that process forward. We need to stop the increasing drain on the national insurance fund by people who disguise the nature of their employment. The growth of such avoidance requires Government action both to ensure fairness, so that those who employ people directly are not disadvantaged as sometimes happens now, and to halt the loss of revenue.
      My answer to the hon. Member for Christchurch (Mr. Chope) was wrong. For a doctor supplied by a service company, the arrangements for paying statutory

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      sick or maternity pay, where the worker is paid by a certified agency, remain unchanged. The agency will be responsible for such payments.
      Mr. Andrew Tyrie:The Minister said that the Government were plugging a loophole of nearly half a billion pounds. It is a cheek to call that a loophole. What is the Government's estimate of the employment consequences of raising that sum in revenue? What reduction in employment will result from that increase in taxation?
      Mr. Timms:Did the hon. Gentleman say half a million? The sum involved is much greater.
      Mr. Tyrie:I said half a billion; it is £475 million.
      Mr. Timms:I do not think that the sum is quite so large. In the long term, we anticipate additional revenue to the national insurance fund of around £200 million. I do not believe that adverse employment results from people obeying the law and behaving properly. That is what we want to ensure. Companies are damaged by this abuse because they are disadvantaged. We want a level playing field and our measures will achieve that.
      Mr. John Burnett:Will the Minister give way?
      Mr. Timms:I shall give way one more time.
      9.15 pm
      Mr. Burnett:Are the Government proposing the lifting of the veil of incorporation while the existing tests of whether the contract is one of service or for services will still apply? Is that basically what the Government are doing in the new clause?
      Mr. Timms:We are sticking with the existing tests. However, I am describing a rather new circumstance where people are avoiding national insurance payments through establishing service companies. That is the loophole that we will block.
      Mr. Duncan Smith:Has the Minister carried out a cost-benefit analysis within the Department? If so, will he publish it so it is available to us all? Secondly, what estimate has been made of what it will cost to enforce the Government's proposals on the businesses to which he is referring?
      Mr. Timms:We have certainly considered the additional revenue that will be gained to the national insurance fund. In the long term, it will run to £216 million a year. The cost to the Inland Revenue of this and of the parallel income tax measure will be £175,000 in the current year and £55,000 a year in the long term.
      Our proposals meet the aims that I have set out. They will ensure that the correct national insurance contributions are paid. I urge the House to support the new clause.
      Mrs. Lait:I have been horrified by the Minister's contribution and by the lack of clarity in his thinking
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      when responding to my hon. Friends' questions. The hon. Gentleman has demonstrated a complete inability to answer sensibly any of the questions put to him. It is another example of desperation and of the Government requiring any amendments to be introduced now to try to ensure that a later debate, which causes the Government embarrassment, is put off for as long as possible. In effect, they are saying, "Let us bang anything we can think of into the Bill without thinking through the consequences." The new clause is a classic example of not thinking through the consequences.
      The measure was foreshadowed in the Budget, as the Minister said. It produced an instant reaction from people who have their own service companies. Indeed, I referred to it in the Finance Bill on Second Reading. Consultation is still taking place. That is palpably clear from the Minister's inability to answer any questions. The Inland Revenue press release, which was put out at the time of the Budget, stated that the Inland Revenue
      "will over the next few months be working with representative bodies on aspects of the practical application of the new rules and on the production of guidance."
      It is clear that none of that has hit the Minister yet. There is absolute confusion everywhere as to what precisely the Minister is trying to do.
      The Minister said that he thought that 50,000 people would be affected by the Government's proposal. I understand that it will affect 50,000 people in London alone, and 80,000 in the United Kingdom. The impracticalities of what he is proposing are emerging. What seemed to be a fairly simple new clause, although we do not agree with it, has been widened to include what appears to be an attack on the construction industry and the way in which it supplies workers to companies. I shall be happy if the Minister is prepared to tell me that I am wrong.
      It seems that there will be an attack on the health service by increasing the cost of employment to the NHS. The Minister quoted an overseas doctor. Originally, if I heard him aright, he talked about a doctor employed by a service company, which was then changed on advice to an employment agency. The overseas doctor suddenly became someone who was an employee of the NHS, as opposed to someone who was contracting his services to the health service as an independent contractor.
      It is interesting that the Minister's example involved an overseas doctor. In so far as anyone has been able to make any sense of what the Revenue is proposing, it seems that the circumstances in which people try to dodge tax—we do not condone anyone behaving illegally and evading taxation—are mainly when they take their earnings overseas at the end of a contract.
      Miss McIntosh:Public sector workers are not the only ones who will be affected. The many businesses that run IT services and which are, by definition, consultancy services will also be affected. I have just signed out a letter to a constituent in the Vale of York who is deeply concerned about the measure. The details of it were buried in an Inland Revenue press release—IR35. Is it standard practice for such detail to be announced in a press release that we cannot debate on the Floor of the House?
      Mrs. Lait:It is certainly standard practice on the part of the Government for such information to be buried in

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      press releases. That produced an instant response. My hon. Friend was not the only person who received irate e-mails within 24 hours of the measure being announced. I, too, had an irate constituent.
      The industries most affected are the modern industries that provide the UK with its flexible work force who make us competitive in the rest of the world. Information technology is just one of those industries. To ensure that we remain competitive in world conditions, industries contract out various projects. To use their skills most effectively, many people are taking the sensible decision to leave a company's employment and to act as a consultant to a range of bodies.
      If the Minister is suggesting that people who set up a consultancy company and work on contract for several employers should be treated as employees of those companies, the complaints that we have received from many people who have their own service companies are justified. We must make sure that the proposal is defeated.
      If a person's right to set up his own service company is taken away and he cannot contract out his skills, not only will our businesses become less competitive, but modern and flexible work patterns will disappear, and we will return to the old Labour-controlled labour situation that it took us 18 years to get rid of.
      Mr. Graham Brady:I have received many letters from concerned constituents. Many of those companies may work expressly for one client for a certain period, which may be quite long. They may then work for a series of other clients for short periods. I find it impossible to see how the Government envisage devising a test that will establish whether the business is a bona fide consultancy business, and how the test will take account of long periods with a single client. My hon. Friend may wish to pursue the matter further.
      Mrs. Lait:My hon. Friend highlights another of the practical problems that clearly have not been thought through by the Government. My constituent works to precisely that pattern and has been out of work for only 10 weeks in the past five or six years. He has a private limited company. It is a simple company consisting of himself, one director and a company secretary. He uses a limited company because that is the only type that agencies and large corporate firms will deal with. That is necessary to protect all concerned in the event of an error at a client's site. That is one of the difficulties that the Government have failed to consider.
      Money that goes into the company of my constituent, Andrew Jarrod, is paid as pay-as-you-earn. He says:
      "twice yearly I pay dividends if there is money remaining. My accountant manages my PAYE, and advises me on tax rights and wrongs.
      Since the company was set up (over 5 years ago) I have had six separate contracts for entirely unrelated large companies which have ranged from 6 weeks to 2 years.
      "All contracts have been for 6 months or less and those that have continued longer were always through extensions that had to be negotiated. All contracts have a 1 month get-out clause which the client can invoke at any time."
      The problem is that, in trying to get rid of such service companies, the Government have come slap-bang up against the potential for litigation between a large company and an individual, quite apart from the fact that
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      people who are running such companies properly will provide for themselves the national insurance and national insurance-equivalent benefits that the Government are so keen to get their hands on. They will also provide their own health insurance and pension scheme. They take pressure off state provision; they do not apply pressure by not contributing to the full, because most of them are paying their share.
      We have found that the consultation has not been in any way extensive and has been based on a knee-jerk reaction from the Government.
      Mr. Duncan Smith:What consultation?
      Mrs. Lait:Indeed, and the new clause does not match the Government's own definition of what is good regulation. It is not transparent, there has not been full consultation and there has been no indication of any preparedness to accept alternatives—and there are alternatives.
      For instance, the 3 Sixty group, which has been working on behalf of many of those service companies, has come up with at least three alternatives, any one of which would achieve what I am sure the Government want to achieve. First, they could adopt a minimum salary level based on a percentage of the total contract value. Secondly, as happens in Ireland, expenses could be allowed, as now, and all remaining moneys could be paid as a salary, but with employees' national insurance only. Thirdly, salary level could be based on the multiple of the Government's minimum wage, which I should have thought was a subject dear to their heart. There are other options and they should be considered, instead of using this scatter-gun, blanket approach which has clearly distressed many people and taken their minds off the businesses that they should be running to earn the money that pays the taxes that keep the Government going.
      The new clause shows that the Government have not thought through, and are not prepared to consult on, fundamental changes affecting a lot of people who are making this country effective, competitive and up to date. Those people should be able to develop the skills that would make modern projects a byword for and the watchword of this country—an objective that I should have thought the Government would want to proceed with—but the Government are adopting an old-fashioned, old Labour approach that will close down opportunity. That reflects the Government's arrogance and there are no guarantees that people who want to run their businesses in such a way can continue to do so.
      I ask again: why the rush, why no consultation and why does such a wide-ranging measure have to be included in the Bill? Conservative Members—and, clearly, the Minister—are unable to understand that.
      9.30 pm
      Mr. Andrew Miller:I have listened to some of the most extraordinary speeches and interventions from Conservative Members that I have ever heard in this place. The Conservative party seems to be in favour of lump labour, which is an extraordinary diversion.
      May I answer an important point raised by the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith)? I have read Inland Revenue

      739
      35 carefully and I do not believe that this matter was hidden away. As the hon. Member for Beckenham (Mrs. Lait) acknowledged, it was foreshadowed in the Budget. That leads to the explanation that seems to have been supported by the 3 Sixty group, which the hon. Lady prayed in aid in her speech. The group says:
      "It is currently possible for a permanent employee to leave a company on a Friday to return on Monday doing exactly the same job but indirectly engaged as a 'consultant', paying reduced tax and national insurance."
      Nobody in the House could defend such a practice. The 3 Sixty group and the Public Contractors Association do not seek to do so. I am sure that the hon. Member for West Aberdeenshire and Kincardine will acknowledge that that practice cannot be right.
      Where we have difficulties, and my hon. Friend the Minister may be in a position to clarify this point, is with the relationship between the new clauses and the consultation process that is going on as part of Inland Revenue 35. Subsection (1) of new clause 15 says:
      "Regulations may make provision for"
      all the things that are set out thereafter. I seek guidance from the Minister, but that seems to pave the way to producing such regulations as described in the new clause, subject to the outcome of the Inland Revenue's consultations.
      My hon. Friend the Minister says that there will be extensive discussions on this matter. That is important, because there are fine divisions between the employment situations that hon. Members have described, which would fall one side of the regulations or the other. I am sure that no one in the House would seek to defend the extreme situation that I described—at least, I presume not. Looking round the Chamber, I see no one seeking to do so.
      What is needed to satisfy the concerns being expressed by the Public Contractors Association is an assurance—I appreciate that this relates to subsequent matters that are in the hands of Inland Revenue officials—that the certification scheme that will emerge will be based on the widest possible consultation.
      Sir Robert Smith:My concern is that the Government often provide draft regulations to justify the wording of a clause and to show that such powers are needed. If, after consultation, it transpires that the Government are going down the wrong road, the wrong powers will have been given them. Sadly, it is not an extremely effective process for modifying regulations.
      Mr. Miller:The hon. Gentleman makes an interesting point, but I understand from the several thousand responses to the web site to which the hon. Member for Beckenham referred that there has been a wide debate, particularly within the IT sector, on this point. The 3 Sixty group and others are concerned that
      "the Inland Revenue are not accepting any invitations to seminars and have suggested group approaches."
      The Revenue needs to consult all relevant bodies, including people like the Public Contractors Association. The building industry is notorious for bypassing regulations. Some years ago under the previous Administration, I found it extremely difficult to find a plasterer who would provide
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      so much as a VAT receipt. I wonder whether that has changed. Clearly, we cannot countenance allowing people to continue to behave in that manner.
      Having said that, I believe that careful consideration must be given to some parts of the building industry. The effect of the draft regulations on a partnership in my constituency—one partner lives in the constituency of my right hon. Friend the Member for Birkenhead (Mr. Field) and the other lives in mine—may be that it would not be able to tender for work. I know that is not the Government's intention. That company is perfectly legitimate, and my right hon. Friend and I have spoken to both partners.
      I appreciate that my hon. Friend the Minister is not able to answer for the Revenue, but will he confirm my understanding of the importance in the new clause of the simple word "may"? I urge him to ask his hon. Friends in the Treasury to pass on to the Revenue the concerns that are being expressed not about the principle—because all hon. Members must accept the principle—but about the details that could emerge if the wrong interpretation is put on an extremely well-meaning clause.
      Mr. Eric Forth:I come to this debate not as a member of the Committee that has considered the Bill, but as a mere Back Bencher, so I am handicapped. However, I am fortunate in that only today, I received from a constituent some material that suggests that he is outraged at what the Government are doing. It may help the Committee if I were to share with hon. Members some of what my constituent had to say. It is highly pertinent, and it gives the game away, given what the Minister said about consultation.
      I received this fax a few hours ago, so it is hot off the press. It says:
      "To introduce ourselves I am Deputy Chairman of"—
      X plc—
      "and we are a major employer in Bromley, with a turnover of £200 million. Both the company and my home address are in your constituency.
      Although I am concerned about the above Bill, I am also concerned about the erosion of our democracy."
      Those are not my words: they are the words of my constituent, who is the deputy chairman of a company with a turnover of £200 million.
      What my constituent goes on to say is apposite to the background to the new clause:
      "On the 9th March 1999 in the Chancellor's budget statement it was announced that changes were to be introduced to counter avoidance in the area of personal service provision. This document … was introduced under the title of IR35."
      He has sent me a copy of that document, which I may or may not have cause to share with hon. Members in a moment. Crucially, he goes on to say:
      "In this document the Inland Revenue announced they would be working with representative bodies who were interested in contributing to reforms in this area. We as a company and the industry sector under which we operate were happy to enter into debate and affect the outcome in a democratic way.

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      However, I have heard today that on Friday 14th May 1999 an amendment was made to the Welfare Reform and Pensions Bill, which implied that the Inland Revenue had already reached its conclusions without any meaningful discussions having taken place.
      If you are in the House this afternoon"—
      if I am in the House; I ask you!—
      "when the bill is discussed I would be most grateful if you could raise this question and let me know the outcome."
      There is an immediate opportunity for the Minister, when he replies to the debate, to let my constituent in Bromley know just what the devil is going on.
      My constituent has given me a copy of the Inland Revenue press release; his letter to the Inland Revenue dated 12 March; a copy of the amendments to the Bill—the new clause that we are now discussing—and various notes. His letter of 12 March was to Elaine Carey of the personal tax division of the Inland Revenue in new wing, Somerset house. He wrote that he wanted to engage in the consultation process, stating:
      "I would welcome the opportunity to work with you to reduce avoidance but as you state 'minimise the impact of these changes on ordinary businesses'.
      I hope it will be of mutual benefit."
      Here we have a problem. It would appear that real people in real businesses were conned into believing that they were going to engage in some sort of consultation with the Government, and have been shocked to find that the Government are attempting—rather typically—to slip into this important Bill a crucial new clause, with no notice and, certainly, no consultation.
      I suspect that the Minister will say what he said earlier: that the consultation will be on the regulations. He is falling back on the argument—the very flimsy argument—that if we nod through the important principles that lie behind the new clause, people in business need not worry, because they will be involved in a process of consultation on the regulations. The principles will be settled now, with hardly any debate, with no notice and with no opportunity for real consultation. Having led business to believe two or three months ago that there would be consultation, the Government hold out the prospect of consultation on the regulations.
      You and I know, Madam Speaker, that the real opportunity for proper debate, amendment and so on arises in the early stages of legislation. Once legislation has been set in terms of new clauses such as this, opportunities for consultation on the regulations will be—I will not say zero, but they will certainly be minimal. Moreover, there will be no opportunity to amend the regulations, which will be presented on a take it or leave it basis. This is the challenge that faces the Minister this evening: how will he satisfy my constituent that there will be any realistic opportunity for people in business to have a proper say in the process?
      Certainly people in business will be affected by the outcome, whatever it is. The Minister must tell us in much more detail what exactly he is offering the business community in terms of real consultation and real dialogue, rather than the con trick that has been perpetrated so far and the disgraceful conduct in which the Government have engaged tonight by attempting to slip through on the q.t. a wide-reaching measure that they introduced just a few days ago.
      That is the first point that I wished to raise. It gives the Minister an opportunity, which I hope he will take, to respond in some detail to the concern expressed by my
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      constituent—who, I suspect, speaks for many other people, not just in Bromley but throughout the country. My hon. Friend the Member for Vale of York (Miss McIntosh) hinted that she had constituents who felt the same, as did my hon. Friend the Member for Beckenham (Mrs. Lait). I would not be surprised if a good many of my hon. Friends—who I hope will catch your eye in due course, Madam Speaker—had a similar tale to tell.
      Mr. Bercow:My right hon. Friend makes a powerful point. Does he agree that, as the Government have admitted via the Secretary of State that they have "not got it right on regulation", the least that they can do is make an absolute commitment to establishing a minimum period—preferably three months, better still six—in which consultation could take place? If they are not prepared to give such a commitment, obviously they cannot be taken seriously.
      Mr. Forth:My hon. Friend makes a typically helpful suggestion, but does he believe, or expect me to believe, that such a commitment would mean anything at all?
      Mr. Bercow:No!
      Mr. Forth:The problem is that the indications given just a few weeks ago that there would be a proper consultation process have already been brushed aside in the most arrogant way by the Government, who are now attempting to rush the measure through without any proper debate or consultation. That raises an important question, to which we must know the answer.
      9.45 pm
      The Minister said that some 50,000 service companies were involved—that was his estimate. It would be helpful if we knew not just the number of companies, but the number of employees, on the best estimates of the Department. It strikes me that the provisions could have a serious effect on employment, but the Minister claimed that any effect would be minimal. He seems to be trying to have it both ways. He said that some £200 million of additional revenue would result from the new clause—that was his estimate—and, in almost the same breath, went on to say that there would be no damage to business whatever. That is the sort of business logic that we have come to expect from the Government. They extract money from business, but expect no adverse effect.
      Regardless of the merits of the case, it is naivety at best, and deception at worst, for the Government to say that they are going to extract—by stealth—yet another large amount of money from business, without any adverse effect on those businesses and, therefore, on employment. That cannot be right.
      Therefore, when the Minister replies to this short debate, I hope that he will tell us what the adverse employment consequences are likely to be. There cannot be none. He cannot extract money from business and expect that to have no effect whatever. As the companies involved are mainly small, although the one in my constituency is not small, with a turnover of £200 million, I should like to know the number of employees involved, not just the number of companies. There are bound to be consequences for such businesses. We are entitled to a

      743
      proper explanation from the Minister about those employee numbers and the impact of his proposals on employment.
      Those are my preliminary observations; now I have some questions about the details of new clause 15, which contains some significant measures. I am not well versed in the arcane aspects of this part of the law, so I view this new clause as a layman, as a Back Bencher is entitled to do. Equally, I am entitled to look for some proper explanations from the Minister as to what the devil he is talking about in that new clause.
      Let me pick some elements of that measure more or less at random to illustrate my point. My eye lit upon subsection (3)(a), for example, which I am struggling to make sense of. I will read it out just for the sake of clarity:
      "for the worker to be treated for the purposes of the applicable provisions of this Act, in relation to relevant payments or benefits, as employed in employed earner's employment by the client".
      What on earth does that mean? It must mean something. We are entitled to an explanation of what it means because subsection (3) states:
      "Regulations under this section may, in particular, make provision"
      for certain arrangements. Therefore, the new clause offers the possibility of regulations being made for the purpose that I quoted in paragraph (a).
      Mr. Swayne rose—
      Mr. Forth:Ah. My hon. Friend is going to help me.
      Mr. Swayne:Well, I do not want to answer on behalf of the Minister, but my right hon. Friend may have missed the point because it matters not what the detail of the new clause is. The substance is in subsection (9), which says that, whatever happens, whatever has been said, it will be rewritten when the Government see fit to do so.
      Mr. Forth:I am grateful to my hon. Friend, but he is trying to rush my contribution a little; I cannot think why. I will come to that subsection in a little while, but I do not want the House to be deprived of the opportunity to deliberate on some of the other subsections and paragraphs because they are equally impenetrable.
      Surely, one of the important things that we have to do, particularly when considering a new clause of such scope, which has been introduced so recently and with so little time for people to consider it, is to give proper consideration to some of its detail—not all of it—to give the Minister an opportunity to explain his thinking. He should explain the possible impact of the different measures on the very businesses of which he is talking.
      Mr. Burns:Does my right hon. Friend agree that, because of the way in which the Government have short-circuited the consultation process on the regulations, the provisions are even more significant than they appear? Is he aware that the new clause also does not state whether the regulations will be passed by the affirmative or negative procedure, or whether—if the latter procedure is used—the Government will try to slip regulations through the House by stealth? Given what Labour Members said about the negative procedure when they were in
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      opposition, is not my right hon. Friend disturbed at the possible use of another method of slipping regulations through?
      Mr. Forth:My hon. Friend is right. In a moment, we shall deal with subsections (8) and (9), which—as he rightly identified—give us no indication of the procedural framework within which the regulations will be introduced. The procedural framework may seem to the public to be a matter of little importance, but, as he and I know, it may be of the greatest importance, as it will determine the opportunities that the House may or may not be afforded to consider the regulations properly. Nevertheless, I shall deal with that matter in a moment, as I do not want to pre-empt our consideration of the new clause. We should quickly consider one or two other matters, to clear our minds before proceeding any further.
      According to subsection 3(i) regulations may make provision
      "for excluding or modifying the application of the regulations in relation to such cases, or payments or benefits of such description, as may be specified."
      Already, we are being asked to sign an entirely blank cheque, and to allow for the possibility that the regulations may exclude or modify their application to such cases,
      "or payments or benefits of such description, as may be specified."
      Although that tells us absolutely nothing, it has the rather sinister implication that the provision may be extended in any direction, for any purpose, at any time.
      I truly believe that the Minister owes the House a proper explanation of why such a broad a provision had to be included in the Bill, and of the types of scenarios that the Government had in mind when drafting that very important provision. We are owed that explanation of paragraph (i), otherwise we shall be party to signing a legislative blank cheque, which allows the Government and their officials to do absolutely anything. Such latitude cannot be right or necessary.
      Subsection (4) goes on to state:
      "Regulations under this section may make provision for securing that, in applying any provisions of the regulations, any term of a contract or other arrangements which appears to be of a description specified in the regulations is to be disregarded."
      That is the other side of the coin. Apparently—if am I reading the subsection correctly—the Government also want to have a reverse or cancelled blank cheque, to allow any terms and arrangements made heretofore to be disregarded.
      Mr. Brady:I fear that my right hon. Friend may be misreading subsection (4), which has a considerably worse implication than that which he described. It will, in fact, set aside the terms of a contract freely entered into by the parties to an agreement. The legislation is therefore seeking to interfere in a matter that has been freely agreed under normal contract law procedures.
      Mr. Forth:I do hope that my hon. Friend is wrong. He is not often wrong, but I hope that he may be in this case. I hope that he will seek to catch your eye, Madam Speaker, to expand on the point. If he is right about that point, it is an even more shocking indictment of new clause 15. It was bad enough that the new clause provided simply an open-ended and undefined possibility of

      745
      reversing previous terms and arrangements. If my hon. Friend is right, the subsection is worse than I feared. It appears to give unlimited power, under regulations, for any term of a contract to be disregarded. As I reread the subsection with my hon. Friend's guidance, I become ever more convinced that he is right, in which case we need even more explanation from the Minister.
      As my thinking on the issue develops, I am beginning to regard the new clause as much more sinister than even my hon. Friends have suggested so far. It is taking on ever wider ramifications, with ever more powers that are less and less specified. I wonder whether there is any limit to the possible effects and impact on business that might flow from the new clause and the regulations that will underpin it, with or without consultation. That is another issue that the Minister must explain.
      I am sure that some of my hon. Friends will want to dwell on subsection (6) in detail, so I shall pass over it and, for the sake of brevity, I shall skip quickly to subsection (8). It says:
      "Regulations under this section shall be made by the Treasury with the concurrence of the Secretary of State."
      The whole game is almost entirely given away. This is yet another Treasury matter. We do not often have that set out for us in black and white and in such unequivocal terms, but it says so here. If my reading of the subsection is correct—I hope to get the agreement of my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) on it—it says that the Treasury will make the regulations, with the concurrence of the Secretary of State. The Treasury is very kind and generous to allow some consultation with the Secretary of State—uncharacteristically so—but concurrence is all that it will be. Or does the subsection mean that the Treasury will not be allowed to act without the explicit agreement of the Secretary of State? Is that what "concurrence" means? I should like the Minister to clarify that when he winds up this little debate. Will the Treasury merely consult the Secretary of State but have the final word, or does the word "concurrence" mean—this is a crucial difference—that the explicit agreement of the Secretary of State will be required before the Treasury can impose what it wants by regulation?
      We are dealing with the relationship between Departments after the consultation process has taken place—if there is one—when we are ready for the regulations under the section to be made, apparently driven by the Treasury, not the Department. I am grateful to the Minister for showing his hand in the drafting of the new clause. The Treasury will decide. The Secretary of State's role is not properly defined. We ought to know a lot more about that.
      The main point that I wanted to make in my few remarks was on subsection (9). The new clause was already worrying, but it now gets a lot more worrying. To put the matter on the record and for the benefit of the House, I shall read the subsection. It says:
      "If, on any modification of the statutory provisions relating to income tax it appears to the Treasury to be expedient to modify any of the preceding provisions of this section for the purpose of assimilating the law relating to income tax and the law relating to contributions under this Part of this Act, the Treasury may with the concurrence of the Secretary of State by order make such modifications of the preceding provisions of this section as the Treasury think appropriate for that purpose."
      746
      Surely that is the mother and father of all Henry VIII clauses.
      Mr. Duncan Smith:My right hon. Friend has been here longer than I have and knows more about such issues. Does he agree that subsection (9) is very wide ranging—it is the widest ranging provision that I have seen in legislation—empowering the Treasury to do anything that it wants at any time with only the concurrence of another Minister? Does he find that remarkable?
      Mr. Forth:It is not just remarkable. It is appalling and insulting to the House of Commons that we should have—

  BUSINESS OF THE HOUSE
  It being Ten o'clock, the debate stood adjourned.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
  That, at this day's sitting, the Welfare Reform and Pensions Bill may be proceeded with, though opposed, until any hour.—[Mr. Clelland.]
  Question agreed to.
  As amended, in the Standing Committee, again considered.
  Question again proposed, That the clause be read a Second time.
  Mr. Forth:It is insulting to the House of Commons that we should have this proposal set out in such arrogant and upsetting detail without any explanation. The Minister did not attempt to give any explanation of the rationale behind this astonishingly wide-ranging power. The wording is provocative—one would have thought that the Minister might have tried to tone it down—with the use of terms such as
  "it appears to the Treasury to be expedient to modify any of the preceding provisions of this section".
  There is no attempt to limit or qualify what can be done. Use of such terms leaves the matter wide open, and it is at the discretion of the Treasury as to what can be done with the powers.
  The supremacy of the Treasury is here for all to see. There is no attempt to conceal it, and the Minister does not see why he should. That lays bare the motivation behind the measure—it is Treasury-driven regulation, designed solely for the purpose of making sure that the revenue take by the Government is maximised. This is a stealth tax if ever I saw one. It is dressed up as part of the Welfare Reform and Pensions Bill, but it is, in essence, a Treasury-driven measure that may or may not get the concurrence of the Secretary of State.
  I have cut my remarks to the bone to allow progress to be made, and there is a lot more that I could have said. I am trying to contain my anger about all of this. I have probably short-changed my constituent by sharing with the House only a little of what he said. I hope that he will be satisfied. He will judge the Minister by the nature of his reply to the debate—and so will we.
  This matter will be judged by those outside the House by the quality of replies that we get to this and other debates. I will not be remotely satisfied unless the Minister gives us some full, frank and much more satisfactory answers than we have had hitherto.
  Dr. Vincent Cable:I agree with many of the remarks made by the hon. Member for Beckenham (Mrs. Lait) and the right hon. Member for Bromley and Chislehurst (Mr. Forth). If anything, the right hon. Gentleman is, unusually, understating his case.
  Whatever the merits of the clause—and they are few—it has been appallingly presented on two levels: first, the way in which we were confronted on Friday with a major legislative change affecting large segments of the British economy, with little opportunity for consideration and amendments; and, more generally, the way in which the consultation process has, or has not, happened ever since Inland Revenue 35 was issued on 9 March.
  There has been an attempt at consultation to deal with many of the legitimate issues that have been raised. The hon. Member for Ellesmere Port and Neston (Mr. Miller) raised some of the perfectly genuine concerns that the Inland Revenue has about avoidance, but these are being dealt with through consultation. He mentioned disguised employment, whereby people work as employees and then become a company on the Monday of the following week. Independent computer contractors who have dealt with the problem have made specific suggestions as to how the matter can be dealt with. It is suggested that a six-month break be created between retirement from paid employment and the taking up of a new corporate identity as a way of dealing with the problem without undermining the whole basis of freelancing, on which so much of the modern UK economy depends.
  I fear that underlying the problem is a failure to understand how large parts of the modern British economy function. There are powerful trends driven by international business, not by the desire to avoid taxes. Large parts of big business operate by outsourcing. That may in some cases arise from a wish to avoid tax or not to treat workers properly, but in large part it is sensible business logic. Companies concentrate on doing what they do best and buy in specialised skills from freelance workers, often through agents.
  Project work is extremely important. Much of the provision concerns project-based industries such as information technology and offshore oil, about which my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir R. Smith) will speak later. The essence of project work is that it must be undertaken in a specific period. People may well undertake several entirely distinct projects in a year and they may work on several simultaneously for different employers. The requirement that they become employees and cease operating in a flexible way completely undermines the basis of their operation.
  The hon. Member for Ellesmere Port and Neston made a point that is often made in defence of the changes: that the Government are acting in defence of not only the Revenue, but exploited lump labour workers. That is an extraordinarily patronising view of the way in which many of our constituents operate.
  Many highly educated people have a sense of empowerment and want to live a different life style that is quite remunerative, but not as stable and secure as that of salaried workers such as those in the Inland Revenue. They do not pay national insurance contributions but, equally, they do not derive contributory benefits. There is a quid pro quo, as they are not entitled to sickness or unemployment benefit. They may also sacrifice many of
  748
  the rights and entitlements associated with employment law, including redundancy payments. They accept that as the nature of the profession in which they operate.
  I do not want to follow the example of the right hon. Member for Bromley and Chislehurst and quote constituents' letters at great length, but letters can add to the human flavour of our discussion. Only yesterday, a constituent explained to me in a letter the motivation of people such as those to whom I have referred. The letter says:
  "I have been working in the IT industry for twelve years and in 1994 I decided to become freelance. This necessitated the setting up of a company as that was the only way that agencies and clients would contemplate using my services, not as a tax avoiding measure … I became freelance because I have other interests beside information technology … spending several months in Guatemala as a human rights monitor and a lot of voluntary work with Amnesty International."
  I would have thought that the Government would be in favour of people trying to live a flexible life style in the high-technology industries.
  Mr. John Hayes:The hon. Gentleman makes an interesting point. It would be bad enough if the economy was at a standstill and set in aspic, but the trend towards independent facilities and project management of the type that his constituent describes is growing, so the provision will be less and less relevant as time goes on. My experience in the IT industry was very much as the letter describes.
  Dr. Cable:I do not need to augment that helpful intervention.
  The Government are justifying their action on the grounds of revenue saving. As the Minister said, large sums are involved. I believe that the Government's estimate of the total is £475 million a year; but that is the gross figure and we should consider whether the Government will really save that much. I have asked parliamentary questions to try to establish how many Government contracts in the IT industry are bought from people providing services in the way that has been described. Those people's costs will rise, eliminating many of the savings.
  One of the other consequences of forcing freelance workers to become employees is that they could become temporary workers. Then they would not only cease to pay dividends and value added tax, but would be entitled to benefits, leading to a substantial reduction in Government gain. Some of the work would be driven offshore and more revenue would be lost in that way. The Minister quoted a suspiciously small sum for compliance costs, but the total compliance costs for payroll taxation amount to some £1.3 billion. This provision would be a significant addition to that already significant sum.
  The figure of £475 million greatly overstates the net benefit to the Exchequer from the changes, which would also have significant damaging effects on the British economy. That has to be faced. Key growth industries would be affected in many ways. They would face increased costs, which would be important in an internationally competitive market.
  Other European countries are currently offering special deals to attract our information technology industry, because they are jealous of it. They are offering 35 per cent. income without taxation as an inducement to

  749
  IT workers to operate from continental Europe. Countries such as India are, to their great credit, becoming major players in the IT contracting business. They are low-cost and very good operators, and much of the industry would migrate to such countries.
  The problem would be not only the employment loss, but the way in which entrepreneurship would be stifled. Important British companies—Logica is a good example—started with five or so freelance contractors working together as a team and grew into highly successful corporations. That is the nature of the industry in question.
  Mr. Bercow:The hon. Gentleman is developing an interesting case. Is he aware that on the Cabinet Office's website, under the heading of "The tests of good regulation", are listed the need for a regulation to have broad public support and also for it to be easy to understand? Does he agree that we cannot know whether the Government's proposal has broad public support, because it has been rushed forward with no test of public opinion? Does he also agree that, given the examples adumbrated by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth), it is painfully obvious that the regulation is not easy to understand?
  Dr. Cable:The hon. Gentleman is right. The proposal does not meet many of the Cabinet Office's tests for regulations. There are 10, and it fails most of them.
  I wish to suggest how the Government might proceed. The first step is to withdraw the proposal so as to enable proper consultation. It is not urgent that it should be implemented immediately. Even if it were implemented immediately, what need is there for it to be introduced in the next financial year? Many of the contracts it would affect would have to be unwound over a couple of years. The Government should allow more time for consultation and a longer period for implementation. They should also address the intervention by the hon. Member for Buckingham (Mr. Bercow) and produce a proper regulatory impact assessment of the change. It would be far reaching and involve major costs which should be spelt out explicitly.
  Mr. Chope:For the avoidance of doubt, I wish to declare an interest as a director of a small company, although because the new clause is so vague, it is impossible for me to tell the House whether it would affect me. This debate takes me back to 1976, when we were at the height of the previous Labour Government's assault on the self-employed, those in business on their own account and those employed in small businesses. At the time, I founded an association in Wandsworth for self-employed people.
  I have been disappointed this evening by the Minister's recognition that he did not understand the new clause, when he responded to my intervention, and by the speech by the hon. Member for Ellesmere Port and Neston (Mr. Miller), who is not in his place at the moment. I know that he has been in contact with the Public Contractors Association, but he seems to take a much more relaxed approach to the issue than the association does. The association regards the new clause as outrageous, and is incensed and horrified by it. The hon. Gentleman rather made light of it, and referred to such irrelevancies as lump labour. This new clause is not about
  750
  lump labour; it is about the future of a thriving part of the United Kingdom economy—small businesses, and especially the IT sector.
  10.15 pm
  I agree with much of what the hon. Member for Twickenham (Dr. Cable) said. He called on the Government to withdraw the new clause. It is clear from what he and my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) said that there is nothing in the new clause that could not be included in next year's Finance Bill. Indeed, the Government have said that the second prong of the attack on what they regard as a problem will be a selection of clauses in next year's Finance Bill.
  As the new clause recognises that the Treasury is in the lead on the issue, there is no reason why the whole of the new clause could not have been included in next year's Finance Bill. By then, consultation would have been complete, and the Government might have had second thoughts. I should be grateful if the Minister would explain why it is not possible to include these provisions in the Finance Bill next year—which was what the Chancellor's statement and Inland Revenue press release No. 35 had led people to believe would happen.
  New clauses 15 and 16 are extremely sinister. The specious justification is that they will counter
  "avoidance in the provision of personal services"
  by securing the tax base. That is what is set out in table 1.11 in the Red Book, and it is said that the measure will build a fairer society. However, this is effectively another new tax on small companies and those in business. It is another example of new Labour's new business dictionary, where the word "buttress" means "undermine". Inland Revenue press release No. 35 says:
  "These changes buttress the new measures to support small and medium sized companies."
  The reverse is true—they will severely undermine such companies. The press release continues:
  "Without the changes it would be very difficult to target support at genuine entrepreneurial activity".
  What a load of humbug; this is actually an attack on entrepreneurial activity.
  The Inland Revenue press release says that those workers who are employees and directors of service companies
  "often have to pay a price in terms of loss of protection under employment law."
  Therefore, I asked the Minister whether those people would receive a compensating benefit in return for the fact that class 1 national insurance contributions would be made payable by the so-called employer. In the end, after receiving information from officials, he told me—contrary to what he had originally said—that there would be no compensating benefit for those employers who were paying national insurance contributions for the first time as a result of these arrangements. That shows that the Government are all about imposing new burdens without any benefits whatever. When they talk about the Inland Revenue press release, they show mock concern for the interests of these small businesses.
  The Inland Revenue press release also says:
  "The proposed changes are aimed only at engagements with essential characteristics of employment",

  751
  but the essence of a company that employs a director and employees is that that is the employment relationship. If a separate client wishes to engage that company, the contract is with that company, and the liabilities flow from that contractual relationship. With new clause 15, the Government seem to be totally undermining privity of contract and the essence of company law in this country.
  If the Government want to lift the veil of corporate responsibility, they should introduce a separate major Bill that redefines the role of companies. The Government have set up a major inquiry into the future of company law, but they are pre-empting it by picking out a few companies—a relatively small proportion of the total number in the United Kingdom, but far more than the 50,000 mentioned by the Minister—and penalising them with a burden of £0.5 billion.
  Many ex-employees of large companies who become consultants, setting up their own information technology or other businesses, use the company format to develop their businesses. Many of the most successful businesses in the UK started off with one or two people, perhaps with the benefit of a redundancy payment, setting up a consultancy company and using their income to develop the business until it could employ others and grow. In Southampton, for example, a company started by someone made redundant by a television company is now a major public company worth hundreds of millions of pounds.
  Sir Robert Smith:An added benefit of working as a company is that people can protect the intellectual property rights of any innovations that they make.
  Mr. Chope:That is another important point. People set up companies with open minds. They take advice and they decide to take the benefits and burdens of setting up. The Government say that they are trying to reduce burdens on small companies, but that is totally inconsistent with a new clause that will impose major new burdens, perhaps driving small companies out of business and certainly depriving them of vital working capital. The £450 million that the Exchequer says it will take from the business sector is £450 million that could be invested in wealth production.
  New clauses 15 and 16 are an affront to democracy. They were tabled with minimum notice, giving minimal opportunity to discuss them. If they had been included in the Finance Bill, there would have been at least two weekends in which to discuss them and assess their implications. Instead, they were published on Friday. Fortunately, a group of people were suspicious of the Government's intentions, and they communicated the new clauses to our constituents. We have received several e-mails as a result, but that all happened by chance. The Government propose major changes to company law and contract law as well as national insurance and tax laws. To introduce such a change in such a way is absolutely outrageous. It makes a mockery of the Government's consultation.
  If the new clause passes through this House, I hope that the Henry VIII clause will be struck out in the other place, which has already shown its intolerance of a similar clause in another Bill. That Bill has been held up and is being given detailed scrutiny by a Committee of the other
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  House. The Government have had to retreat, realising that their Henry VIII clause was constitutionally unconscionable, yet they are trying on the same thing in this House tonight. If they use their majority to force it through, I hope that the other place will remove subsection (9) of new clause 15.
  These issues are of grave importance. There is no mention of a regulatory impact assessment. The Government have not thought the subject through. If they had, the Minister would have been able to answer straight away my question about whether the new employers would pay sickness benefit under this arrangement. That is just another example of how the measure is being rushed through.
  Perhaps because the Government have difficulties in respect of invalidity and incapacity benefit with their own Back Benchers, they thought that they would be able to push this measure through without much publicity. I can assure the House that tens of thousands of companies and businesses are on the warpath. They realise that they have been gravely misled and let down by the Government and they will get their revenge.
  Sir Robert Smith:You ruled that the timing of the new clause and the way in which the Government tabled it is in order, Madam Speaker. Unfortunately, they tabled it on a Thursday evening, when the next day's business is finished before the working day of other people. I had a chance to fax a copy of the new clause to the Institute of Chartered Accountants of Scotland. Even though it is an expert in the subject, it did not have time to come up with constructive amendments in the few hours that the Government had given us. Clearly, it was not in order to table unthought-out amendments at such short notice to a Government new clause. Therefore, I hope that the Government will withdraw the new clause.
  As my hon. Friend the Member for Twickenham (Dr. Cable) said, the urgency is not necessarily there, but the potential to do damage is. It would seem to make more sense for the Government to tread carefully in this area and to listen to concerns expressed on both sides of the House in different ways and with different levels of vehemence. They should take on board the serious concern of many of our constituents about the fact that a way of working is about to be seriously disrupted. The Government should recognise that, for many people that way of working is not a result of consultation with accountants to minimise tax bills, but a natural progression in the way in which many industries have evolved.
  The offshore oil industry in my area has evolved much project working. It has had to become a flexible industry to compete in the world market at a time when prices have fallen drastically. Therefore, contract working has developed naturally in that industry. The Government have failed to take on board the fact that if they want to change that whole culture, they should not do so at too short notice, too quickly.
  Mr. John Swinney:Like the hon. Gentleman, I have received many representations from people involved in the North sea oil and gas industry. In the process of making those representations to the Government, along with many other hon. Members, I have been faced with the new clause. Does the hon.

  753
  Gentleman believe that it is important, if we are to keep the faith of our constituents in the work of this Parliament, that the consultation process should be allowed to take its course on other issues? The Government should withdraw the new clause to guarantee a more reasoned debate on this important subject, which would not prejudice or make Parliament lose faith with our constituents.
  Sir Robert Smith:Yes, that statement is accurate and it follows on from what I said in an earlier intervention. When the Government have produced other legislation with regulatory powers, they have from time to time produced the draft regulations that they hoped that the powers would give them the chance to introduce. That way, one has a chance to gauge whether one wants to give the Government so much power. This time around, they are saying, "Give us the power. Trust us to undertake the consultation. Then we'll produce the regulations." As we all know, regulations are difficult, if not impossible to amend unless the Government decide to take them away to do so. It would be far better not to give Governments powers until they have shown that they are willing to handle them safely and carefully and to avoid doing damage.
  We are talking not merely about individuals, but about a whole industry. At such short notice, it has been impossible to get back to constituents to clarify whether I could name them when dealing with figures that relate to them. One constituent is contracted to a company that has 125 people in its engineering design department, of whom only 12 per cent. are staff employees—between 15 and 20 per cent. are contract PAYE employees and the remaining 60 to 70 per cent. are employed through company contracts. The measure will mean immense extra costs for that company, if the Government change the whole regime overnight at the end of this financial year.
  The Government have shown with previous oil industry taxes that they do not understood how competitive the world market is. They took about 18 months to recognise that in respect of the industry's fiscal regime. In taxing people working overseas, they did not recognise that many did not earn vast fortunes. A constituent tells me that he was clobbered when he found that his tax regime was changed halfway through a contract when he could not renegotiate it. Now the Government are attacking a whole way of working without notice or completing the consultation.
  I reiterate what my hon. Friend the Member for Twickenham said: withdraw the clause and get this the right way round. The Revenue should carry out proper, two-way consultation. I understand from some of the Revenue documents that it will accept input but not comment on it or enter into a dialogue. To be effective, consultation requires dialogue. New clause 15 may be the wrong route to solve the problem. The Government will have taken the wrong power and not be able to tackle the problem appropriately.
  The Government have not explained why new clause 15 had to be so last-minute. The Bill has been in Committee. Many of the points raised tonight would have been better addressed by informal dialogue with Ministers in Committee. The Minister did not answer them one at a time because he is waiting to sum up. Committee is a more effective way to deal with the nuts and bolts. I urge the Government to think again, and listen to constituents'
  754
  concerns and the effective points that have been made. The measure is premature and overbearing and should be withdrawn. They should return after consultation with a considered Bill.
  10.30 pm
  Miss McIntosh:I wish to elaborate on my earlier intervention by referring to my irate, outraged constituent from Staveley. He is operating as an IT company, but assures me that he pays—I am sure that his accountant would confirm it—his tax and national insurance by regular contributions. He is outraged by the Government's suggestion that he does not make such contributions regularly and further insulted by the fact that the consultation period has been negated by the late tabling of new clause 15.
  Budget heading 28 in table 1.11 refers to
  "Countering avoidance in the provision of personal services".
  Inland Revenue press release 35 refers to the details. I repeat my request to the Minister to explain whether my constituents should regard it as standard practice that they learned about the implications of fundamental changes to the advantages of operating as a limited company by reading about them in an Inland Revenue press release.
  Conservative Members accept that outsourcing under contracting out and privatisation has meant that IT services in particular have blossomed. There is some nonsense in Inland Revenue press release 35, which states:
  "The Chancellor announced today that changes are to be introduced to counter avoidance in the area of personal service provision."
  Can the Minister explain why my constituent in Staveley is receiving notification that he will come under the new regime when he is already paying his tax and national insurance contributions?
  Perhaps the best line is in the notes for editors, which state:
  "Without the changes it would be very difficult to target support at genuine entrepreneurial activity—making such measures less effective and more costly."
  The Government's proposals will hamper the genuine entrepreneurial activity that we sought to encourage when we were in Government.
  I ask the Minister to respond to a further allegation that is made about the outcome of the new regulations. The Government want to close a loophole, so the Revenue has proposed a system whereby each engagement is tested to ascertain whether it is akin to employment. If the answer is yes and, in the Minister's words, there is a contract, it will be treated as such, with national insurance paid on the total salary. It is my understanding that at that stage there would be no opportunity to claim expenses and the reason for using the limited company would disappear. Is that the intention behind the new clause?
  Inland Revenue press release 35 explains contractors'
  "loss of benefits when they move away from full-time PAYE positions, but it fails to reflect accurately the current set-up for the majority of contractors."
  As a result of privatisation and outsourcing, they have been encouraged to set up in a certain format. Many contractors, such as my irate constituent in Staveley, are firmly in the PAYE system and paying their national insurance and tax contributions.

  755
  I end with the words of an IT contractor who, under the new provisions, would be affected negatively. He says:
  "Are we to see the current Government once again introducing a measure that will reduce the effectiveness of our IT industry, possibly putting up costs and resulting in an exodus of our most skilled consultants to the rest of the world where they are still seen as an invaluable commodity?"
  If the Government insist on pushing the new clause to a vote, I urge the House to reject it.
  Mr. Burnett:I think that we all believe that individuals should pay their fair share of tax and that tax loopholes should be closed. Nevertheless, the new clause will bring about massive and far-reaching change, and it is not clear to me that the Government understand the repercussions of the clause. I have a number of questions arising out of the clause and I shall be grateful if the Minister would answer them.
  First, how and what tests will be adopted to determine the tax and national insurance status of the companies and the individuals associated with them? Will the existing tests—the so-called badges of trade—continue to be used? In other words, is the only change envisaged by these regulations the assumption that the limited company does not exist and that it is the individual shareholders and employees who are deemed to be contracting with what I believe the regulations define as "the client"?
  Secondly, will the Minister confirm that income tax treatment will always follow treatment for national insurance contributions and vice versa? Subsection (9) seems to cater for that, but I would be interested to know whether that will always happen.
  Thirdly, we have heard much this evening about the absence of consultation. There has been virtually no consultation. What future consultations are proposed? As so many hon. Members have said this evening, should not the regulations come before the House under the affirmative resolution procedure? The power to draft and introduce the regulations lies only with the Treasury and the Secretary of State, and that is not good enough.
  Mr. Bercow:Does the hon. Gentleman think that it is extraordinary in these circumstances that the Government appear not to have undertaken any consultation, in the light of their stated commitment to the contrary as long ago as Budget day on 9 March? The hon. Gentleman will be aware that paragraph 4 on page 2 of the Government's press release on 9 March reads:
  "To this end"—
  that is to make an effective job of it—
  "the Inland Revenue will over the next few months be working with representative bodies on aspects of the practical application of the new rules and on the production guidance."
  Does he not think that it should be explained why, two and a quarter months later, that process has not been started?
  Mr. Burnett:It is, of course, extremely worrying that consultations have not taken place. As I said earlier, the regulations are far reaching. It is not good enough, as I was saying before that intervention, that the new clause will be introduced at the whim and say-so of the Treasury
  756
  and the Secretary of State. The regulations are important and the House should have the opportunity to debate them, after significant consultation.
  My fourth point is that most contracts will, rightly, have been negotiated and priced on the basis of the existing rules. There should be a transitional phase to allow a reasonable period for existing contracts to expire and new contracts to be negotiated.
  Fifthly, what will happen if the service company retains all or part of the cash that it earns in a year? Will all the cash be deemed to be salary and distributed, and therefore be subject to PAYE and national insurance contributions? Is there to be any allowance for the costs and expenses of running the company, and the many other costs and expenses that the company may incur? It seems that we will return to the dark ages of shortfalls and apportionment of net relevant earnings by the back door.
  Sixthly, is the Minister aware how many companies will be affected by the change? The regulations appear wide enough to catch most companies in this country. I sure that all hon. Members believe that it is right to close tax loopholes, but many individuals incorporate for very good reasons, not least limited liability and because, as we have heard this evening, incorporation is a condition precedent to being able to contract in the first place.
  New clause 15 is uncertain, complex and far reaching. It will have a significant impact on British industry and the service sector. Both parties to contracts will end up paying substantial sums in national insurance contributions. I look forward to hearing the Minister's replies to my questions. I hope that, after lengthy and detailed consultation and amendment, the regulations will be brought before the House.
  Mr. Timms: We have had a lively and interesting debate on the measures. The proposals were announced by the Chancellor in the Budget a full year before they will take effect. A regulatory impact assessment will be issued in due course, once the details of the practical application of the new rules have been finalised. It will be based on input from business and other interested parties. The aim is to structure the rules so that any regulatory impact is minimised, and so that there need be no additional charge with respect to genuine entrepreneurial endeavour.
  The right hon. Member for Bromley and Chislehurst (Mr. Forth), who is not in his place, raised some concerns on behalf of a constituent. The Inland Revenue is consulting at meetings—[Interruption.] I am glad to see that the right hon. Gentleman has rejoined us. The Inland Revenue is consulting at meetings on the details of how the scheme will work. That process is under way.
  The letter from Elaine Carey to which the right hon. Gentleman referred set out the proposed approach, and I hope that his constituent will take the opportunity to pass his or her views on to Elaine Carey.
  The measure represents a flexible approach that is helpful to business and deals with a serious problem.
  Sir Robert Smith:As the impact assessment is still to be carried out, why does the Minister need the powers now?
  Mr. Timms:I shall come to that. There are only a limited number of opportunities for those powers to be taken.

  757
  Service companies are an important part of the UK economy. We are seeking to stop their use for the purpose of disguising what is, in reality, employment. Our proposal is not a threat to flexibility. There is no bar to contracting. Instead, we are focusing on the need to ensure that national insurance and tax are not avoided.
  My hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) also raised points about consultation and drew attention to the welcome for our proposals from a number of quarters. The problem at the moment is that there is an uneven playing field, which is disadvantageous to major organisations, but I can assure him that we will consult fully with all relevant bodies. The Inland Revenue will work with representative bodies to ensure that the proposed new rules will work well in practice and that any administrative burden will be minimised.
  The right hon. Member for Bromley and Chislehurst several times used the term "extracting money from business". We are requiring people to pay the tax and national insurance that is due from them. That is not an onerous burden at all; it will simply ensure that the opportunities for avoidance are reduced. That has been welcomed, and is seen as reasonable, across the House.
  10.45 pm
  Mr. Forth:Surely the point is that, to the extent to which the Minister's proposals are successful, businesses will have less money than they have now. That is almost bound to have an employment impact. What assessment has he made of the impact of him removing from businesses money that they have now, but will not have in future?
  Mr. Timms:People will be paying the tax and national insurance that the House has determined is due from them. I do not accept that an adverse employment effect will result from that. The right hon. Gentleman also asked how many individuals would be involved and pressed me to give a figure. We estimate that up to 100,000 individuals could be involved.
  Mr. Burnett: This is not only a one-way ticket, and incorporation has some significant fiscal disadvantage—for example, a double charge to capital gains tax. It has always been six of one and half a dozen of the other, so why introduce this particular penalty now?
  Mr. Timms:Because there are significant tax and national insurance advantages from proceeding in such a way. Some service companies are used as a device for disguising what is, in reality, employment. We want the regulations to address that.
  The hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) raised some interesting points, asking how we could be certain that the power will be sufficiently flexible to make regulations following the outcome of consultation. He thought that we ought to have published some draft regulations already. The Inland Revenue will circulate draft regulations to interested associations—those which have expressed concern about what we are doing—and will listen to the feedback that is received from that consultation. Regulations are constantly reviewed and can be amended with relative ease, if it is discovered that amendment is necessary.
  758
  The hon. Gentleman also raised some interesting points about the oil sector. I explained at the outset the way that the proposed test would work and, as with any sector, a worker who has been engaged to carry out a project in the way that the hon. Gentleman described—he would control the manner and method of working—would be outside the provision. That is the way in which the test will apply.
  Sir Robert Smith:There is a concern about the way in which many projects work. When carrying out parts of a project, a person would be working for a larger team and responsible to someone higher up in the organisation, but would still be working specifically for that project. A sledgehammer may be cracking a nut here, which will drive work in that sector abroad and damage the competitiveness of an industry that is in serous trouble and looking to have a world export market for its future.
  Mr. Timms:I can assure the hon. Gentleman that we will be acutely sensitive to issues of competitiveness—in that sector and in others—when we draw up the regulations.
  Mr. Brady rose—
  Mr. Timms:I want to move on to the points made by the hon. Member for Twickenham (Dr. Cable) in an interesting speech. As I have said to the hon. Member for West Aberdeenshire and Kincardine, nothing here affects people commissioned to carry out projects as consultants; neither, of course, do any of the changes affect self-employment. The hon. Member for Twickenham asked about cost and queried the figures that I gave. I gave the direct public sector costs to the Inland Revenue; I was not attempting to set out a full regulatory compliance assessment, which will be published in due course.
  It is wrong that people should be able to avoid national insurance by means of the device that is being addressed in this measure. Many companies that offer those services pay proper tax and national insurance on their employees. The hon. Gentleman mentioned Logica. I worked for Logica for eight years and I assure him that at no time did that company prosper by avoiding national insurance.
  Genuine entrepreneurial endeavours will not be penalised by this measure. The Government seek to support entrepreneurs. The trouble is that some people are not genuine entrepreneurs, but are employees, in all but name, through a service company. The problem that too often arises is that those people pay themselves disproportionately large dividends and a minimum salary—perhaps just above the lower earnings level—so that they qualify for contributory benefit and no more. By that device, they pay significantly less national insurance than they should. That is simply not fair on other workers who are employed directly and who do not avoid their national insurance contributions.
  Many measures in the Budget improve support for small, innovative companies, such as the extension of enhanced capital allowances for small and medium-sized business, and investment in machinery or plant. It is important that that support and the measures that the

  759
  Government are taking on that front are not undermined by those who seek to disguise avoidance as entrepreneurship. That is what the measures would tackle.
  Mr. Brady:The House is being asked to agree to sweeping new powers, which can be changed almost at whim, and we have not even seen the draft regulations. Will the Minister guarantee that the House will have a chance to debate and vote on the regulations, once those are available?
  Mr. Timms:I shall come to that question in a moment, because others have raised it as well. First, let me comment on the points made by the hon. Member for Christchurch (Mr. Chope), who asked why we could not introduce the measure in next year's Finance Bill. The convention is that national insurance is outside the scope of Finance Bills, and must be dealt with in social security legislation. This is our opportunity to deal with the matter, which is why we are introducing it now.
  Mr. Chope:If it is a social security matter, why is the Treasury in the lead on the regulations?
  Mr. Timms:Because, as the hon. Gentleman knows, the responsibility for national insurance policy has been transferred to the Treasury through the Contributions Agency transfer legislation, which a number of us enjoyed debating not long ago. However, this is still a matter for social security legislation.
  The hon. Member for Torridge and West Devon (Mr. Burnett) asked for assurance that the income tax and national insurance procedures around this change will be carefully aligned. They will, and he is absolutely right to say that subsection (9) allows us to achieve that. It is important that we achieve that, and that is how we shall proceed. The regulations that will put the measure into effect will be subject to the negative procedure, as is standard for national insurance measures. The House will then have the opportunity to debate them if it chooses to do so.
  This important measure closes a significant loophole in the legislation, which loses the national insurance fund hundreds of millions of pounds—£216 million in the long term. That is less than some hon. Members have said, but it is a substantial sum. We cannot, as the hon. Member for Twickenham suggested, sit around and do nothing and take our time over this matter. We must move swiftly to deal with the problem. We must ensure that, from April next year, there is not the unlevel playing field that I have described, and that people are required to pay the national insurance that the House has determined is due from them.
  Mr. Duncan SmithI have never heard such a lot of rubbish in my life. Labour Members are sitting there like a bunch of sheep. Half of them have not even bothered to read this new clause. As my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) correctly said, the new clause is breathtaking. I have never seen anything quite like it. It moves from being a Henry XIII clause to being a Louis XIV clause—absolute power to the absolute monarch—before any consultation.
  The Minister quietly slipped out the fact that the regulations will subsequently be subject to the negative procedure of the House. There will not be even a limited
  760
  ability to debate them. As my right hon. Friend said, the most breathtaking part is new subsection 9, which states that
  "the Treasury may with the concurrence of the Secretary of State"—
  forget about that now; this lot are no longer in charge because the Government passed national insurance contributions to the Treasury—
  "by order make such modifications of the preceding provisions of this section as the Treasury think appropriate for that purpose."
  So there we have it. The Treasury can tear up the new clause any time it likes by order. They do not have to come back to the House. The whole thing is appalling.
  Late in the day, after we have been through Committee stage, the Government dump this massive element into a Bill, which allows for only a limited amount of debate and no real scrutiny. The Government have set the benchmark for scrutinising the Bill. Their document, "The Better Regulation Guide", comes from the Cabinet Office: I gather that the unit is chaired by Lord Haskins. One wonders when Lord Haskins will realise that the Government do not bother to find out what business wants, but perhaps that is in his interest.
  In the foreword to the document, the Prime Minister says:
  "A fair, decent and safe society depends on good regulation."
  This measure is clearly not that. The Prime Minister goes on:
  "The intended benefits of regulation disappear, often to be replaced by less choice, higher prices and lower employment and investment. This can be particularly damaging to our small firms."
  Having ignored the first part, he says:
  "I have therefore decided that no regulatory proposal which has an impact on business, charities and voluntary bodies should be considered by the Government without a thorough assessment of the risks, costs and benefits, a clear analysis of who will be affected and an explanation of why non-regulatory action would be insufficient."
  Those are the Prime Minister's own words. No doubt, the Chancellor does not think that the Prime Minister is in charge, and takes his own view.
  The Minister says, "Don't worry. At some point in the future, these assessments will be made", but all the regulations are in the new clause. He does not have to listen to the consultations. Why should he bother? He can dismiss them and tear up anything that he likes, because he has the power. It is outrageous.
  This document sets out the process: formal consultation followed by the achievement of compliance, the enforcement regime, sanctions and the appeals procedure. Right at the end, it says:
  "At this stage you will be ready to put specific recommendations to Ministers for them to make final decisions. You will need to present the responsible Minister with the Regulatory Impact Assessment for him or her to sign."
  That should be done before we get to that stage, not after. The Minister tells us not to worry, because we should trust him. Trust the Government? The Government do not care. They have imposed £39 billion of extra cost on business since they came to office, and now this.
  What the Government have produced is an outrage. They have dumped this provision into the Bill at this late stage. As Opposition Members have said, many people in the oil, IT and building industries will suffer extra costs.
  When will the Government realise that competition is not just here in the United Kingdom? When will this Government who believe in a greater Europe realise that

  761
  outside the United Kingdom is a competitive area, for whose purposes they will hamstring British business? They will have done untold damage, and we should vote against the new clause.
  Question put, That the clause be read a Second time:
  The House divided: Ayes 375, Noes 182.

  Division No. 180]

  [11 pm

  AYES

  Abbott, Ms Diane

  Clark, Paul (Gillingham)

  Adams, Mrs Irene (Paisley N)

  Clarke, Charles (Norwich S)

  Ainger, Nick

  Clarke, Eric (Midlothian)

  Ainsworth, Robert (Cov'try NE)

  Clarke, Rt Hon Tom (Coatbridge)

  Alexander, Douglas

  Clarke, Tony (Northampton S)

  Allen, Graham

  Clelland, David

  Anderson, Donald (Swansea E)

  Clwyd, Ann

  Anderson, Janet (Rossendale)

  Coaker, Vernon

  Armstrong, Rt Hon Ms Hilary

  Coffey, Ms Ann

  Ashton, Joe

  Cohen, Harry

  Atherton, Ms Candy

  Coleman, Iain

  Atkins, Charlotte

  Colman, Tony

  Austin, John

  Connarty, Michael

  Banks, Tony

  Corbett, Robin

  Barnes, Harry

  Corbyn, Jeremy

  Barron, Kevin

  Corston, Ms Jean

  Battle, John

  Cousins, Jim

  Bayley, Hugh

  Cox, Tom

  Beard, Nigel

  Cranston, Ross

  Beckett, Rt Hon Mrs Margaret

  Crausby, David

  Begg, Miss Anne

  Cryer, John (Hornchurch)

  Bell, Stuart (Middlesbrough)

  Cummings, John

  Benn, Rt Hon Tony

  Cunningham, Rt Hon Dr Jack

  Bennett, Andrew F

  Cunningham, Jim (Cov'try S)

  Benton, Joe

  (Copeland)

  Bermingham, Gerald

  Curtis—Thomas, Mrs Claire

  Berry, Roger

  Dalyell, Tam

  Best, Harold

  Darling, Rt Hon Alistair

  Betts, Clive

  Darvill, Keith

  Blears, Ms Hazel

  Davey, Valerie (Bristol W)

  Blizzard, Bob

  Davidson, Ian

  Blunkett, Rt Hon David

  Davies, Rt Hon Denzil (Llanelli)

  Boateng, Paul

  Davies, Geraint (Croydon C)

  Borrow, David

  Dawson, Hilton

  Bradley, Keith (Withington)

  Dean, Mrs Janet

  Bradley, Peter (The Wrekin)

  Denham, John

  Bradshaw, Ben

  Dismore, Andrew

  Brinton, Mrs Helen

  Dobbin, Jim

  Brown, Rt Hon Gordon

  Donohoe, Brian H

  (Dunfermline E)

  Doran, Frank

  Brown, Rt Hon Nick (Newcastle E)

  Dowd, Jim

  Brown, Russell (Dumfries)

  Drew, David

  Browne, Desmond

  Drown, Ms Julia

  Buck, Ms Karen

  Dunwoody, Mrs Gwyneth

  Burden, Richard

  Eagle, Angela (Wallasey)

  Burgon, Colin

  Eagle, Maria (L'pool Garston)

  Butler, Mrs Christine

  Edwards, Huw

  Byers, Rt Hon Stephen

  Efford, Clive

  Campbell, Alan (Tynemouth)

  Ellman, Mrs Louise

  Campbell, Mrs Anne (C'bridge)

  Ennis, Jeff

  Campbell, Ronnie (Blyth V)

  Field, Rt Hon Frank

  Campbell—Savours, Dale

  Fisher, Mark

  Canavan, Dennis

  Fitzpatrick, Jim

  Cam, Jamie

  Fitzsimons, Lorna

  Caplin, Ivor

  Flynn, Paul

  Casale, Roger

  Follett, Barbara

  Caton, Martin

  Foster, Michael Jabez (Hastings)

  Cawsey, Ian

  Foster, Michael J (Worcester)

  Chapman, Ben (Wirral S)

  Foulkes, George

  Chaytor, David

  Fyfe, Maria

  Clapham, Michael

  Galbraith, Sam

  Clark, Rt Hon Dr David (S Shields)

  Gapes, Mike

  Clark, Dr Lynda

  Gardiner, Barry

  (Edinburgh Pentlands)

  George, Bruce (Walsall S)

  762

  Gerrard, Neil

  Ladyman, Dr Stephen

  Gibson, Dr Ian

  Lawrence, Ms Jackie

  Gilroy, Mrs Linda

  Laxton, Bob

  Godman, Dr Norman A

  Lepper, David

  Godsiff, Roger

  Leslie, Christopher

  Goggins, Paul

  Levitt, Tom

  Gordon, Mrs Eileen

  Lewis, Ivan (Bury S)

  Griffiths, Jane (Reading E)

  Lewis, Terry (Worsley)

  Griffiths, Nigel (Edinburgh S)

  Liddell, Rt Hon Mrs Helen

  Griffiths, Win (Bridgend)

  Linton, Martin

  Grocott, Bruce

  Lloyd, Tony (Manchester C)

  Grogan, John

  Lock, David

  Gunnell, John

  Love, Andrew

  Hain, Peter

  McAllion, John

  Hall, Mike (Weaver Vale)

  McAvoy, Thomas

  Hall, Patrick (Bedford)

  McCabe, Steve

  Hamilton, Fabian (Leeds NE)

  McCafferty, Ms Chris

  Harman, Rt Hon Ms Harriet

  McCartney, Rt Hon Ian

  Heal, Mrs Sylvia

  (Makerfield)

  Healey, John

  McDonagh, Siobhain

  Henderson, Doug (Newcastle N)

  Macdonald, Calum

  Henderson, Ivan (Harwich)

  McDonnell, John

  Hepburn, Stephen

  McGuire, Mrs Anne

  Heppell, John

  McIsaac, Shona

  Hesford, Stephen

  McKenna, Mrs Rosemary

  Hewitt, Ms Patricia

  Mackinlay, Andrew

  Hinchliffe, David

  McLeish, Henry

  Hodge, Ms Margaret

  McNamara, Kevin

  Hoey, Kate

  McNulty, Tony

  Home Robertson, John

  MacShane, Denis

  Hood, Jimmy

  Mactaggart, Fiona

  Hoon, Geoffrey

  McWalter, Tony

  Hope, Phil

  Mahon, Mrs Alice

  Hopkins, Kelvin

  Mallaber, Judy

  Howarth, Alan (Newport E)

  Mendelson, Rt Hon Peter

  Howarth, George (Knowsley N)

  Marsden, Gordon (Blackpool S)

  Howells, Dr Kim

  Marsden, Paul (Shrewsbury)

  Hoyle, Lindsay

  Marshall, David (Shettleston)

  Hughes, Ms Beverley (Stretford)

  Marshall—Andrews, Robert

  Hughes, Kevin (Doncaster N)

  Martlew, Eric

  Humble, Mrs Joan

  Maxton, John

  Hurst, Alan

  Meacher, Rt Hon Michael

  Hutton, John

  Meale, Alan

  Iddon, Dr Brian

  Merron, Gillian

  Illsley, Eric

  Michael, Rt Hon Alun

  Ingram, Rt Hon Adam

  Michie, Bill (Shefld Heeley)

  Jackson, Ms Glenda (Hampstead)

  Milbum, Rt Hon Alan

  Jackson, Helen (Hillsborough)

  Miller, Andrew

  Jamieson, David

  Mitchell, Austin

  Jenkins, Brian

  Moffatt, Laura

  Johnson, Alan (Hull W & Hessle)

  Moonie, Dr Lewis

  Johnson, Miss Melanie

  Moonie, Dr Lewis

  (Welwyn Hatfield)

  Morgan, Ms Julie (Cardiff N)

  Jones, Barry (Alyn & Deeside)

  Morley, Elliot

  Jones, Mrs Fiona (Newark)

  Morris, Ms Estelle (B'ham Yardley)

  Jones, Helen (Warrington N)

  Morris, Rt Hon John (Aberavon)

  Jones, Ms Jenny

  Mountford, Kali

  (Wolverh'ton SW)

  Mowlam, Rt Hon Marjorie

  Jones, Jon Owen (Cardiff C)

  Mowlam, Rt Hon Marjorie

  Jones, Dr Lynne (Selly Oak)

  Mullin, Chris

  Jones, Martyn (Clwyd S)

  Murphy, Denis (Wansbeck)

  Jowell, Rt Hon Ms Tessa K

  Murphy, Denis (Wansbeck)

  kaufman, Rt Hon Gerald

  Murphy, Denis (Wansbeck)

  Keeble, Ms Sally

  Murphy, Denis (Wansbeck)

  Keen, Alan (Fettham & Heston)

  O'Brien, Mike (N Warks)

  Keen, Ann (Brentford & Isleworth)

  O'Brien, Mike (N Warks)

  Kelly, Ms Ruth

  Olner, Bill

  Kemp, Fraser

  O'Neill, Martin

  Kennedy, Jane (Wavertree)

  Organ, Mrs Diana

  Khabra, Piara S

  Osborne, Ms Sandra

  Kidney, David

  Pearson, Ian

  Kiifoyle, Peter

  Pendry, Tom

  King, Andy (Rugby & Kenilworth)

  Perham, Ms Linda

  King, Ms Oona (Bethnal Green)

  Pickthall, Cohn

  Kingham, Ms Tess

  Pike, Peter L

  Kumar, Dr Ashok

  Plaskitt, James

  763

  Pollard, Kerry

  Stevenson, George

  Pond, Chris

  Stewart, David (Inverness E)

  Pope, Greg

  Stinchcombe, Paul

  Pound, Stephen

  Stoate, Dr Howard

  Powell, Sir Raymond

  Stott, Roger

  Prentice, Ms Bridget (Lewisham E)

  Strang, Rt Hon Dr Gavin

  Prentice, Gordon (Pendle)

  Straw, Rt Hon Jack

  Primarolo, Dawn

  Stringer, Graham

  Prosser, Gwyn

  Stuart, Ms Gisela

  Purchase, Ken

  Sutcliffe, Gerry

  Quinn, Lawrie

  Taylor, Rt Hon Mrs Ann

  Radice, Giles

  (Dewsbury)

  Rammell, Bill

  Taylor, Ms Dari (Stockton S)

  Raynsford, Nick

  Temple-Morris, Peter

  Reid, Rt Hon Dr John (Hamilton N)

  Thomas,Gareth(Clwyd W)

  Robertson, Rt Hon George

  Thomas, Gareth R (Harrow W)

  (Hamilton S)

  Timms Stephen

  Robinson, Geoffrey (Cov'try NW)

  Tipping, Paddy

  Roche, Mrs Barbara

  Todd, Mark

  Rooker, Jeff

  Touhig, Don

  Rooney, Terry

  Trickett, Jon

  Ross, Ernie (Dundee W)

  Truswell, Paul

  Rowlands, Ted

  Turner, Dennis (Wolverh'ton SE)

  Roy, Frank

  Turner, Dr Desmond (Kemptown)

  Ruane, Chris

  Turner, Dr George (NW Norfolk)

  Ruddock, Joan

  Twigg, Derek (Halton)

  Russell, Ms Christine (Chester)

  Twigg, Stephen (Enfield)

  Ryan, Ms Joan

  Vaz, Keith

  Satter, Martin

  Vis, Dr Rudi

  Sarwar, Mohammad

  Walley, Ms Joan

  Savidge, Malcolm

  Ward, Ms Claire

  Sawford, Phil

  Wareing, Robert N

  Sedgemore, Brian

  Watts, David

  Shaw, Jonathan

  White, Brian

  Sheldon, Rt Hon Robert

  Whitehead, Dr Alan

  Short, Rt Hon Clare

  Wicks, Malcolm

  Simpson, Alan (Nottingham S)

  Williams, Rt Hon Alan

  Singh, Marsha

  (Swansea W)

  Skinner, Dennis

  Williams, Alan W (E Carmarthen)

  Smith, Rt Hon Andrew (Oxford E)

  Williams, Mrs Betty (Conwy)

  Smith, Angela (Basildon)

  Wills, Michael

  Smith, Rt Hon Chris (Islington S)

  Wilson, Brian

  Smith, Miss Geraldine

  Winnick, David

  (Morecambe & Lunesdale)

  Winterton, Ms Rosie (Doncaster C)

  Smith, Jacqui (Redditch)

  Wise, Audrey

  Smith, John (Glamorgan)

  Wood, Mike

  Smith, Llew (Blaenau Gwent)

  Woolas, Phil

  Snape, Peter

  Worthington, Tony

  Soley, Clive

  Wright, Anthony D (Gt Yarmouth)

  Southworth, Ms Helen

  Wright, Dr Tony (Cannock)

  Spellar, John

  Wyatt, Derek

  Squire, Ms Rachel

  Tellers for the Ayes:

  Starkey, Dr Phyllis

  Mr. David Hanson and

  Steinberg, Gerry

  Mr. Keith Hill.

  NOES

  Ainsworth, Peter (E Surrey)

  Brake, Tom

  Allan, Richard

  Brazier, Julian

  Amess, David

  Breed, Colin

  Ancram, Rt Hon Michael

  Brooke, Rt Hon Peter

  Arbuthnot, Rt Hon James

  Browning, Mrs Angela

  Ashdown, Rt Hon Paddy

  Bruce, Malcolm (Gordon)

  Atkinson, Peter (Hexham)

  Burnett, John

  Ballard, Jackie

  Burns, Simon

  Beggs, Roy

  Burstow, Paul

  Beith, Rt Hon A J

  Butterfill, John

  Bell, Martin (Tatton)

  Cable, Dr Vincent

  Bercow, John

  Campbell, Rt Hon Menzies

  Beresford, Sir Paul

  (NE Fife)

  Blunt, Crispin

  Cash, William

  Body, Sir Richard

  Chapman, Sir Sydney

  Boswell, Tim

  (Chipping Barnet)

  Bottomley, Peter (Worthing W)

  Chidgey, David

  Bottomley, Rt Hon Mrs Virginia

  Chope, Christopher

  Brady, Graham

  Clappison, James

  764

  Clifton—Brown, Geoffrey

  Maclennan, Rt Hon Robert

  Colvin, Michael

  McLoughlin, Patrick

  Cormack, Sir Patrick

  Maples, John

  Cotter, Brian

  Mates, Michael

  Cran, James

  Maude, Rt Hon Francis

  Cunningham, Ms Roseanna

  Mawhinney, Rt Hon Sir Brian

  (Perth)

  May, Mrs Theresa

  Davey, Edward (Kingston)

  Michie, Mrs Ray (Argyll & Bute)

  Davies, Quentin (Grantham)

  Moore, Michael

  Davis, Rt Hon David (Haltemprice & Howden)

  Morgan, Alasdair (Galloway)

  Moss, Malcolm

  Day, Stephen

  Nicholls, Patrick

  Donaldson, Jeffrey

  Oaten, Mark

  Duncan, Alan

  Öpik, Lembit

  Duncan Smith, Iain

  Ottaway, Richard

  Emery, Rt Hon Sir Peter

  Page, Richard

  Evans, Nigel

  Paice, James

  Ewing, Mrs Margaret

  Paterson, Owen

  Faber, David

  Pickles, Eric

  Fabricant, Michael

  Prior, David

  Fallon, Michael

  Redwood, Rt Hon John

  Forsythe, Clifford

  Rendel, David

  Forth, Rt Hon Eric

  Robathan, Andrew

  Foster, Don (Bath)

  Robertson, Laurence (Tewk'b'ry)

  Fox, Dr Liam

  Roe, Mrs Marion (Broxbourne)

  Fraser, Christopher

  Rowe, Andrew (Faversham)

  Gale, Roger

  Ruffley, David

  Garnier, Edward

  Russell, Bob (Colchester)

  George, Andrew (St Ives)

  St Aubyn, Nick

  Gibb, Nick

  Salmond, Alex

  Gill, Christopher

  Sanders, Adrian

  Gillan, Mrs Cheryl

  Sayeed, Jonathan

  Gorman, Mrs Teresa

  Shephard, Rt Hon Mrs Gillian

  Gorrie, Donald

  Simpson, Keith (Mid-Norfolk)

  Gray, James

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

  Green, Damian

  Smyth, Rev Martin (Belfast S)

  Greenway, John

  Soames, Nicholas

  Grieve, Dominic

  Spicer, Sir Michael

  Gummer, Rt Hon John

  Spring, Richard

  Hamilton, Rt Hon Sir Archie

  Stanley, Rt Hon Sir John

  Hammond, Philip

  Streeter, Gary

  Harvey, Nick

  Stunell, Andrew

  Hawkins, Nick

  Swayne, Desmond

  Hayes, John

  Swinney, John

  Heath, David (Somerton & Frome)

  Syms, Robert

  Heathcoat—Amory, Rt Hon David

  Tapsell, Sir Peter

  Hogg, Rt Hon Douglas

  Taylor, Ian (Esher & Walton)

  Horam, John

  Taylor, Rt Hon John D (Strangford)

  Howard, Rt Hon Michael

  Taylor, Matthew (Truro)

  Howarth, Gerald (Aldershot)

  Taylor, Sir Teddy

  Hunter, Andrew

  Thompson, William

  Jack, Rt Hon Michael

  Tonge, Dr Jenny

  Jackson, Robert (Wantage)

  Townend, John

  Jenkin, Bernard

  Tredinnick, David

  Jones, Nigel (Cheltenham)

  Trend, Michael

  Keetch, Paul

  Tyler, Paul

  Key, Robert

  Tyrie, Andrew

  King, Rt Hon Tom (Bridgwater)

  Viggers, Peter

  Kirkbride, Miss Julie

  Wardle, Charles

  Kirkwood, Archy

  Waterson, Nigel

  Laing, Mrs Eleanor

  Webb, Steve

  Lait, Mrs Jacqui

  Wells, Bowen

  Lansley, Andrew

  Welsh, Andrew

  Leigh, Edward

  Whitney, Sir Raymond

  Letwin, Oliver

  Whittingdale, John

  Lewis, Dr Julian (New Forest E)

  Widdecombe, Rt Hon Miss Ann

  Lidington, David

  Wilkinson, John

  Livsey, Richard

  Willetts,David

  Lloyd, Rt Hon Sir Peter (Fareham)

  Llwyd, Etfyn

  Loughton, Tim

  Luff, Peter

  Lyell, Rt Hon Sir Nicholas

  MacGregor, Rt Hon John

  McIntosh, Miss Anne

  MacKay, Rt Hon Andrew

  765

  Willis, Phil

  Tellers for the Noes:

  Woodward, Shaun

  Mr. Oliver Heald and

  Yeo, Tim

  Mr. Tim Collins.

  Young, Rt Hon Sir George

  Question accordingly agreed to.
  Clause read a Second time, and added to the Bill.

  New Clause 16

    EARNINGS OF WORKERS SUPPLIED BY SERVICE COMPANIES ETC: NORTHERN IRELAND
    After section 4 of the Social Security Contributions and Benefits (Northern Ireland) Act 1992 there shall be inserted—
    "Earnings of workers supplied by service companies etc
    4A—(1) Regulations may make provision for securing that where—

    (a) an individual ("the worker") in any specified circumstances personally performs, or is under an obligation personally to perform, services for the purposes of a business carried on by another person ("the client"), and

    (b) the performance of those services by the worker is (within the meaning
    of the regulations) referable to a contract between the client and a third party,

    relevant payments or benefits are, to the specified extent, to be treated for the purposes of the applicable provisions of this Act as earnings paid to the worker in respect of an employed earner's employment of his (where they would not be such earnings apart from the regulations).
    (2) Subsection (1) above applies—

    (a) whether or not the client is a person with whom the worker holds any office or employment; and

    (b) whether or not there is any contract between the third party and the worker.

    (3) Regulations under this section may, in particular, make provision—

    (a) for the worker to be treated for the purposes of the applicable provisions of this Act, in relation to relevant payments or benefits, as employed in employed earner's employment by the client;

    (b) for the client to be treated for those purposes as the secondary contributor in respect of any earnings which are treated as paid to the worker in connection with relevant payments or benefits;

    (c) for determining—

    (i) any deductions to be made, and

    (ii) in other respects the manner and basis in and on which the amount of earnings that the worker is to be treated as having been paid for any period is to be calculated or estimated,
    in connection with relevant payments or benefits;

    (d) for apportioning payments or benefits of any specified description, in such manner or on such basis as may be specified, for the purpose of determining the part of any such payment or benefit which is to be treated as a relevant payment or benefit for the purposes of the regulations;

    (e) for disregarding for the purposes of the applicable provisions of this Act, in relation to relevant payments or benefits, an employed earner's employment in which the worker is employed (whether by the third party or otherwise) to perform the services in question;

    (f) for otherwise securing that a double liability to pay any amount by way of a contribution of any description

    766
    does not arise in relation to a particular payment or benefit or (as the case may be) a particular part of a payment or benefit;

    (g) for securing that, to the specified extent, two or more connected persons (within the meaning of section 839 of the Income and Corporation Taxes Act 1988) are treated as a single person for any purposes of the regulations;

    (h) (without prejudice to paragraph (g) above) for securing that a contract made with a person other than the client is to be treated for any such purposes as made with the client;

    (i) for excluding or modifying the application of the regulations in relation to such cases, or payments or benefits of such description, as may be specified.

    (4) Regulations under this section may make provision for securing that, in applying any provisions of the regulations, any term of a contract or other arrangement which appears to be of a description specified in the regulations is to be disregarded.
    (5) Any regulations made in pursuance of subsection (3)(i) above may be framed by reference to—

    (a) any certification procedure which may be established by the Treasury for the purposes of that provision, or

    (b) such certification procedure established by the Inland Revenue as may be specified;

    and any regulations made in pursuance of section 2(2) above or section 7(2) below may also be framed by reference to any certification procedure such as is mentioned in paragraph (a) or (b) above.
    (6) In this section—
    "the applicable provisions of this Act" means this Part of this Act and Parts II to V below;
    "business" includes any activity carried on—

    (a) by a government department or public or local authority (in the United Kingdom or elsewhere), or

    (b) by a body corporate, unincorporated body or partnership;

    "relevant payments or benefits" means payments or benefits of any specified description made or provided (whether to the third party or the worker or otherwise) in connection with the performance by the worker of the services in question;
    "specified" means prescribed by or determined in accordance with regulations under this section;
    "third party" includes—

    (a) any person with whom the worker holds any office or employment, and

    (b) any body corporate, unincorporated body or partnership of which the worker is a member.

    (7) Any reference in this section to the performance by the worker of any services includes a reference to any such obligation of his to perform them as is mentioned in subsection (1)(a) above.
    (8) Regulations under this section shall be made by the Treasury with the concurrence of the Department.
    (9) If, on any modification of the statutory provisions relating to income tax it appears to the Treasury to be expedient to modify any of the preceding provisions of this section for the purpose of assimilating the law relating to income tax and the law relating to contributions under this Part of this Act, the Treasury may with the concurrence of the Department by order make such modifications of the preceding provisions of this section as the Treasury think appropriate for that purpose." '.—[Mr. Kevin Hughes.]
    Brought up, read the First and Second time, and added to the Bill.

  New Clause 1

    ADDITIONAL BEREAVEMENT ALLOWANCE
    `After section 39 of the Contributions and Benefits Act there shall be inserted—
    "39BB.—(1) This section applies where a person whose spouse dies on or after the appointed day is over the age of 45 but under pensionable age at the spouse's death.
    (2) The surviving spouse shall be entitled to an additional bereavement allowance determined in accordance with section 39C below if the deceased spouse satisfied the contribution conditions for a bereavement allowance specified in Schedule 3, Part I, paragraph 5 and the surviving spouse has received bereavement allowance for 26 weeks under section 39B above.
    (3) An additional bereavement allowance shall be payable for 26 weeks for every whole year the surviving spouse has lived over the age of 45 beginning on the day after the surviving spouse's entitlement to bereavement allowance has terminated.
    (4) The surviving spouse shall not be entitled to the additional bereavement allowance for any period after which she or he remarries, but, subject to that, the surviving spouse shall continue to be entitled to it until—

    (a) she or he attains pensionable age, or

    (b) the period mentioned in subsection (3) above expires, whichever happens first.

    (5) The allowance shall not be payable—

    (a) for any period for which the surviving spouse is entitled to a widowed parent's allowance; or

    (b) for any period during which the surviving spouse and a person of the opposite sex to whom she or he is not married are living together as husband and wife".'.—[Mr. Pickles.]

    Brought up, and read the First time.
    11.15 pm
    Mr. Pickles:I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker (Mr. Michael Lord):With this, it will be convenient to discuss the following: New clause 4—Income support premiums payable upon termination of bereavement allowance—
    `After section 39 of the Contributions and Benefits Act there shall be inserted—
    "39D.—Where the surviving spouse after 26 weeks is eligible for Income Support and below pension age, she or he will be entitled to a premium to be paid with Income Support at a level which will maintain the income received from the Bereavement Allowance while she or he remains eligible for Income Support or until that surviving spouse reaches pension age.".'.
    Amendment No. 20, in clause 47, page 42, line 41, leave out 'and 39B' and insert `, 39B and 39C'.
    Amendment No. 26, in page 44, line 7, after '(1)% insert
    `Subject to subsection (3A) below,'.
    Amendment No. 21, in page 44, line 15, after '(3)', insert
    `In cases where a person was under 35 years of age on the appointed day,'.
    Amendment No. 2, in page 44, line 16, leave out `26 weeks' and insert
    `one year, after which the payments shall be reduced each year by an amount equivalent to one fifth of the original amount,'.
    768
    Amendment No. 22, in page 44, line 19, at end insert—
    '(3A) In cases where a person was on or over 35 years of age on the appointed day, a bereavement allowance shall be payable indefinitely, subject to subsection (4) below.'.
    Amendment No. 23, in page 44, line 25, after `(b)', insert
    'where she or he was under 35 years of age on the appointed day,'.
    Amendment No. 24, in page 44, line 41, after '(2)', insert
    `In cases where a person was under 35 years of age on the appointed day,'.
    Amendment No. 25, in page 44, line 46, at end insert—
    '(2A) In cases where a person was on or over 35 years of age on the appointed day, the weekly rate of a bereavement allowance shall be determined in accordance with the provisions of sections 44 to 45A below as they apply in the case of a Category A retirement pension but subject, in particular, to the following provisions of this section and section 46(2) below.'.
    Government amendments Nos. 63 to 65.
    Mr. Pickles:The increase in bereavement payments is welcome, as is their extension to men, but the abandonment of widows without dependent children after six months is shameful. Currently, a person who makes a contribution has the full and certain knowledge that, should something happen to him, his wife will be taken care of. The Government are expanding the scheme to widowers as well as widows, but at the same time they have abandoned a firm promise that they made to the public.
    During the general election campaign two years ago, many Labour Members made lots of promises to their electorate and many column inches were expended on what the welfare state had in store should a Labour Government be elected. I cannot find any mention of the fact that one of the first acts of a Labour Government would be to deprive widows of a pension.
    Both main parties have the Excalibur software, which makes it possible to search the comments of every Member of Parliament and parliamentary candidate. I am pleased to report that we have not found a single example of a Labour Member or candidate telling their electors that they would put an end to the widows pension.
    Mr. Hawkins:Does my hon. Friend agree that the reason why he and others cannot find such a mention is that Labour Members and candidates knew perfectly well that if they had said in the run-up to the election that they proposed to betray widows in that way, Labour would certainly not have won the election?
    Mr. Pickles:I am fairly certain that my hon. Friend is right, but perhaps he is being unkind to individual candidates in suggesting that there was a cover-up. I suspect that the information was restricted to one or two key figures. I expect that Labour Members went honestly to their electorate without making a full disclosure, because as far as they were concerned there was no possibility of reneging on a pension that had been in existence since 1925.
    Mr. Bercow:Sheep in blindfolds.
    Mr. Pickles:My hon. Friend may have a good point about the sartorial elegance of Labour Members. It is not

    769
    surprising that they did not intend to renege on the widows pension, because it has been one of the bulwarks of the national insurance system. As my hon. Friend the Member for Christchurch (Mr. Chope) pointed out in the last debate, a bulwark is the first thing that Labour needs to start to undermine the system.
    The Government's arguments are straightforward and, in one respect, right. They are right to say that the system reflects a time when the man was the breadwinner, and what was appropriate in 1925 or 1948 is not necessarily relevant to 1999; hence the challenge in the European Court by a man, Mr. Kevin Willis. It may have been at the back of the minds of all candidates at the 1997 general election that the Willis challenge would have to be dealt with during this Parliament. However, I do not believe that anyone felt that a Labour Government would deprive women in order to pay for men. I doubt that there was a single person who put their cross on the ballot paper in May 1997 who seriously believed that that would happen. Perhaps two people—the Prime Minister and the Chancellor—knew that it was going to happen.
    If I, or any of my right hon. or hon. Friends, had suggested at the election that women would have to suffer to pay for men's bereavement payments, we would have been accused of scaremongering. It would been a "Tory smear" and people would been on the box immediately to rebut it. The question of equality is a veneer—the measure is an excuse to save money. I do not believe that anyone who has watched a mother, sister, daughter or friend go through the process of bereavement will regard the Government's proposals as anything other than cruel and inhumane.
    In many ways, this is four Bills in one. We have had a taste of some of the more complex aspects of the Bill earlier today. We have had to rely on experts to give us their views on what might happen. That is not the case with this measure, because it is within the personal experience of us all. I doubt that there is a single person in the Chamber tonight who does not have direct experience of bereavement. If there is, they are very lucky. At some stage, they will have to face that problem.
    I use the word "veneer" deliberately. Unlike the welfare budget—which my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) said earlier was growing out of control—the number of people claiming widow's benefit is dropping. It has fallen by 30 per cent. since 1983, when 405,700 widows claimed the benefit. In 1997, 283,600 widows claimed the benefit. It is my sincere hope that the figure continues to fall.
    This is a cost-cutting measure to save £600 million. Husbands have paid in that £600 million over many years in the reasonable expectation that the Government would honour their promise. The lack of that £600 million will force widows on to means-tested benefits. It will amount to £600 million worth of disincentives to save or make provision for one's loved ones.
    It is our contention that six months is too short a period. Grief affects us all differently. Some people become practically catatonic in the immediate aftermath of a bereavement, while others want to throw themselves straight back into work. The person who goes straight back to work and the one who takes a long journey of many faltering steps both need time and understanding.
    Sympathy is always greatest in the immediate aftermath of a death and a funeral. That is when people gather round and want to help, saying that the bereaved person need
    770
    only pick up the phone, and so on. As many hon. Members will understand, as time goes on, the phone calls and letters start to dry up, and life for the friends and relations goes on as before.
    Six months is a crucial period for anyone who has been through a bereavement. In the first months, there are legal matters to take care of, the estate has to be organised and the clothes and possessions have to be disposed of. There is a lot of activity to keep people's minds occupied. It is often around the six-month mark that the full impact of the loss is felt.
    I cannot put it better than the National Association of Widows and the Widows Advisory Trust, which say:
    "The proposals give an allowance of six months after which the
    widowed person is expected to be fit to move through the system into full-time paid employment. In our long experience of bereavement care we would identify six months as being a crucial point in the grieving process. In the early stages of grief the shock goes some way to numb the pain, however at six months the shock is fading and the loss becomes a reality. Imagine the difficulty at this point for a woman who may not have worked outside the home, may have nursed her husband for many months, and still grieving, having to register as unemployed and begin actively seeking work."
    That is precisely what the Government will force thousands of women to embark on when the Bill becomes an Act.
    Mr. David Prior:My hon. Friend has spoken movingly about the plight of widows. Is not the man who knows that his life is coming to an end, and who has paid his contributions for many years on the understanding that his widow would have a decent pension after he died, also in a difficult situation?
    11.30 pm
    Mr. Pickles:That is absolutely right. A contract existed between the state and the citizen, and the Government are embarking on a breach of that contract. Men have contributed over many years, through several generations, on the assumption that, should their life be terminated before their wife has reached retirement age, the state would not desert her. The state will desert now them. We would add to all the problems that widows face at the very moment that their loss becomes reality by requiring them to look for a job.
    Reality is such that the job search would have to start long before the six months was up. The hon. Member for Newbury (Mr. Rendel) is in his place, and he made that point tellingly on Second Reading. In practice, no one will wait until the six months is up, because they will have to start looking for work much earlier—probably after three months. The prospect of the worry of having to find a job and that little bit of financial security being denied to them because they do not have dependent children will hang over those widows, and add to their worries, at a time when their judgment is defective and they are emotionally vulnerable.
    I told the Committee that I lost my mother when I was in my mid-20s. I found the experience numbing, I felt bereft, and I had no judgment. The plight that I felt myself in is well described by Mrs. Sheila Walker, from the Survivors of Bereavement by Suicide. She makes this point:
    "The widow … did not choose to be in that position. She has been through this traumatic experience and she is left numb, unable to keep her thoughts straight. Each day initially is a struggle. I spoke

    771
    to a newly widowed lady yesterday who said, 'I was never like this'. She was very upset because she could not function as she would have liked."
    Six months is a very short time, and the new clause seeks to address that problem. It is a compromise between the status quo and the harshness of the Government's position and it would give the Government a chance to think again.
    Various arguments can be made about social change. The widows benefit was first introduced in 1925 and it was replicated in the national insurance system introduced in 1948. I concede that in 1925 and the years following 1948 the majority of women were housewives. The past two decades have seen an acceleration in the numbers of women joining the work force. From a personal perspective, I say that that is a welcome change in society. The changes in society are offered as an explanation for the proposals for widows benefit, but the Government are anticipating future changes. The proposals do not necessarily reflect changes in the situation of women in their mid-40s and 50s.
    We must nevertheless address the current situation. Not all widows are high flyers—city lawyers, partners in accountancy firms or highly paid executives. Many women are engaged in low-paid jobs, supplementing their husband's earnings. That was put very well by Cruse Bereavement Care, which says:
    "losing a spouse from the age of forty-five to retirement age is usually devastating and can result in financial hardship. In particular, many parents in this age group still need to continue to support their older teenage or young adult children"
    without further assistance.
    Mrs. Patricia Thomas, national liaison officer of Survivors of Bereavement by Suicide, wrote to me and other members of the Committee, and said that her income had been reduced by two thirds by bereavement, and by a further half by a series of redundancies.
    Women often return to work in their mid-40s, working in jobs that do not command very high salaries. The widows benefit offered an additional income that went some way to compensate for the sudden drop in income resulting from the loss of a spouse.
    Let us consider a couple of cases who will be especially badly hit by the proposals. A female constituent—whose name I shall not use, to protect her confidentiality—was widowed, aged 48. Her children were no longer dependent. At the age of 43, she had restarted work. A year later, her husband contracted throat cancer. At 45, she left work to take full-time care of him. She was advised by doctors that he probably had only three months to live. Actually, he lived for a further three years—three years of very stressful daily care, watching someone who was once a vigorous husband, a commanding man, slowly wither away. For months after his death, she was plagued by nightmares of the last months of his suffering. It is not reasonable to expect such a person to recover sufficiently well to seek employment after a mere six months.
    Another case, brought to the attention of a member of the Committee, was that of suicide. It takes a long time for emotions to settle down. The loss is even harder if the bereavement results, not from accident or illness, but from suicide. Overlaying the grief is the question, "Why me? What did I do wrong?"
    772
    I return to what Patricia Thomas says. She has considerable expertise, and she writes very movingly:
    "I am extremely concerned about the lack of appreciation of the effects of bereavement, especially in cases such as suicide which inevitably causes significant traumatic shock. The suggestion that a widow will, six months after such an event when she is still suffering from shock, be capable of applying for jobs, attending interviews or coping with the further rejection of not being offered a post, is completely unrealistic."
    Career breaks can also affect the situation. Often mothers intend to return to work fairly soon after the birth of their child, and some who do are very successful parents.
    Others wish to remain at home to take a career break. A woman might do part-time work from home, or no work other than taking care of her children and running her home successfully.
    Work progresses and practices change. New people join a firm, and those familiar with a woman's work move on. She may have been progressing satisfactorily up the promotion ladder, but her time away will force her to start again at the bottom. Mrs. Sheila Walker, secretary of the National Association of Widows, says:
    "Alistair Darling seems to have lost sight of the emotional side of losing a much loved partner. He proposes that after six months a widow should lose her allowance and be urged to seek employment or to go on to income support, thereby subjecting her to a means test. No way can a widow of six months be in any fit state of mind to do either. She could be suffering from problems of mid life, made even worse by having lost the breadwinner. Where are these jobs Mr. Darling expects her to get? She has had a career break and may not be able to get on any rung of a working ladder."
    It is little wonder that the Social Security Advisory Committee said that it regarded as unrealistic the emphasis on retaining financial independence through employment.
    This change is fundamentally an attack on the contributory principle. If a private company was involved, it would be regarded as mis-selling. Many of us watch the Government's adverts on television in which we are told that anyone who is short-changed has a right to return. My hon. Friends will recall the sight of an ice-cream van. Ice cream is served, a woman buys some, looks at her change and goes back to say, "Excuse me." The Government have gone one stage further than the ice-cream man. Not only are they short-changing us, they are denying us the ice cream altogether, ignoring part of the contract between the state and the citizen.
    The Secretary of State is doubtless safely tucked up in bed, pleasantly asleep as we deliberate on the Bill.
    Mr. Duncan Smith: No, he is out running the ice-cream van.
    Mr. Pickles: No doubt he is at least revving the engine. I hope he is sleeping pleasantly and that he will read what we have said in the morning.
    The Secretary of State's argument that the money will go to those who most need it is redundant. The substantial point is that people paid in expecting that their widows would be taken care of if they died. The national insurance principle means that those who contribute get the benefit. Widows currently receive benefit because their husbands paid during a lifetime of work.
    Mr. Webb: I have agreed with almost all that the hon. Gentleman has said even if I am puzzled by where it is

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    coming from. Would the principles that he is advancing not have applied equally to the Conservative Government's decision to halve widows state earnings- related pension scheme entitlements?
    Mr. Pickles: It must be said that we gave 16 years notice of that—[Interruption.] Labour Members should not get so excited. As late as 12 January, the Government were still giving out duff information at the same time as they were sending out a memorandum to staff. Did they instruct the staff to correct the duff information?
    Mr. Duncan Smith: No.
    11.45 pm
    Mr. Pickles: My hon. Friend anticipates me precisely. The answer is no.
    The hon. Member for Northavon (Mr. Webb) did not have the opportunity of joining me in that Committee, but his hon. Friend the Member for Newbury (Mr. Rendel) will tell him that I wore sackcloth and ashes: I accepted responsibility. Those on the Government Benches and Members who aspire to those Benches should accept responsibility for not ensuring that the correct information was given out. The decision was taken at administrative level, but ultimately those who stand at the Opposition and the Government Dispatch Boxes must accept responsibility. The whole matter has been a sorry mess.
    Mr. Julian Brazier: My hon. Friend is being his customary generous self. In pointing out the weakness in the analogy, surely one should also point out that we are talking about a measure that goes back to 1925, whereas SERPS had been in being for only a few years when we came to office and found that it was actuarially unsound.
    Mr. Pickles: My hon. Friend offers me a Savile row hair shirt, which I accept. He is absolutely right and the sums of money involved are also considerably different. However, one thing that I was taught by mother is that if one has to say sorry, do so and do not qualify it. The point was well made.
    We have not been given sufficient time to allow people to change their affairs. I still think that people are blissfully unaware of the change that is about to take place. It will come in, not in 16 years, but almost immediately, after a very brief gap. People should have time to adjust their financial affairs and to increase provision for their wives because the state is going to renege on its promises.
    Widows will be pushed on to means-tested benefit. At present, only 16 per cent. of widows are on any sort of income support. Age Concern says that because widows benefit is disappearing, many more widows will be forced on to some kind of contributory benefit. In a simple sentence, Age Concern says:
    "After a lifetime of work, many pensioners find that they might have been better off if they had not saved."
    What message are we sending out? On the one hand, we are encouraging people to save for their old age. If they do so, they should be rewarded.
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    My hon. Friend the Member for Canterbury (Mr. Brazier) intervened to encourage me to have a better fitting hair shirt. In Committee, he said:
    "Are we now telling people, 'You should provide for your widow, in case you die early'? Or are we saying, 'Don't save small amounts, don't provide for a modest amount of support, because the state will be relatively generous towards your widow if you don't bother. However, if you do bother, after six months she will be on her own.—[0fficial Report, Standing Committee D, 30 March 1999; c. 554.]
    Frankly, I cannot put it better than my hon. Friend.
    Mrs. Dunwoody: Since the hon. Gentleman is so generously accepting the hair shirt, will he assure me that if he returns to government at any point, he will automatically reverse this legislation?
    Mr. Pickles: I like to think that the hon. Lady and I are old friends. She tempts me, but I have to give her the same reply that I gave in Committee. When we return to power, that is one of the measures that we will——[HON. MEMBERS: "Oh!"] This must be part of the training at Millbank towers. One starts to jeer before hearing the answer. Certainly, we will consider the matter and we will look hard at the pros. We will have to take over a welfare state that has seen a considerable erosion of the contributory principle and a considerable growth in welfare higher up the economic scale, further away from people in need. We will have to address those problems. I can give no promises, but if the Conservatives were in government, we would not be robbing widows.
    Mr. Bayley: You've lost this one.
    Mr. Pickles: If we have lost this point, it is the only thing that we have lost tonight, except perhaps the votes. It is been a very poor show by Ministers, with junior Ministers having to defend an indefensible Bill. If I was one, I would be saying, "Where is my boss? Why can't he spend some time with us at the chalk face?"
    We know that this is principally about savings. The Government want to save £600 million. That risks a further reduction in the savings ratio. They say that they want to encourage savings, particularly for retirement but they penalise those very people. In two years the savings ratio has dropped from 10.5 to 7.5 per cent.
    New clause 1 is designed to mitigate the effects of the Budget, which was particularly damaging to widows, with the abolition of mortgage interest relief at source. The Government handout suggested that everyone would be compensated for abolition of the widows bereavement allowance and that no one would lose out. In Committee, we examined the Inland Revenue press release, but it turned out that the boast was wrong. An important group of widows aged between 60 and 64 will lose out because they will not be entitled to the bereavement payment. We thought that we could probably do something in Committee by tabling amendments to give the money back. After all, that is what the Chancellor intended. I was disappointed to find that it was not possible.
    When we asked whether the Chancellor really wanted to ensure that all widows would be compensated, the answer was no. The Minister of State said that I was "right to say that that is not the case because that payment is not available to those widows who are over retirement age. For that reason, the Inland Revenue has publicly acknowledged that it made a mistake in the press release."—[Official Report, Standing Committee D, 25 March 1999; c. 497.]

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    Are we really to believe that when the Chancellor of the Exchequer sat in No. 11 Downing street in his sparse office drinking his cups of tea, he thought that through this Bill, he would compensate all widows except those aged between 60 and 64, who would be penalised? I do not think that that was his intention. I do not think that he knew the effect that the provision would have. When we give the Government an opportunity to try on their own version of the hair shirt, they refuse. They say that it was all a mistake, a printing error. They did not mean to say it; it belonged to another press release. The last debate showed how much Government commitments given in press releases are worth. They are worth only a few weeks before the Government change their mind. It is worth as much as the Prime Minister's promise that he would review the plight of war widows and their pensions. That promise was made a year ago and it would seem that the right hon. Gentleman has done nothing.
    The new clause has been introduced in the spirit of compromise. We wish to arrive at all-party consensus on widows. It should be recognised that the further a person is from her mid 40s, the harder it is to find well-paid work, especially after a break.
    It is reasonable to ask why there has not been an outcry. Why are people not pounding on the doors of the Chamber demanding change? The answer is that the Government have been particularly cunning. No one currently resident in this country knows that he will be affected by the change that is set out in the Bill. There is not a victim now. Those who will be affected are going about their normal lives. They are blissfully unaware that in a few months disaster will affect them.
    Mr. Brazier: Surely my hon. Friend will agree that that is the story of the Government. There is the exact parallel of £5 billion taken out of pension funds when many of them were in surplus. Nobody noticed at the time. It is when disaster strikes that the markets turn down. That will be exactly the same in this instance.
    Mr. Pickles: My hon. Friend is right. When the Government see a soft target, they kick. They avoid all difficult decisions, which are put off to spin. If they can find a group who are defenceless, who cannot focus on attacking them, they will go in hard.
    Mr. Hawkins: I think that my hon. Friend is being remarkably polite to the Government. Would he agree that people are starting to discover what is happening? I do not know about other hon. Friends, but I have started to receive letters from constituents, from husbands who are starting to discover Labour's betrayal. Our constituents who may be affected by the Government's proposals are becoming extremely angry.
    Mr. Pickles: My hon. Friend is absolutely right. It is a betrayal of everything that the Labour party used to stand for. My great grandfather helped found the Independent Labour party. He would be ashamed of the decision taken tonight. [Interruption.] It is worth while attending these debates because one learns something.
    I wish everyone in the Chamber a long, happy and fulfilled life. However, the Government's proposals could affect any one of us. We had a sharp and sad reminder of
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    that last week. People going about their daily lives are unaware that the state is about to desert them. Fine words at funerals are not enough. Similarly, sympathy and kindness are not enough. The new clause offers a financial breathing space to enable people to get on with the rest of their lives, and I commend it to the House.
    12 midnight
    Mr. Field: I shall speak to amendment No. 20 and the linked amendments, but before I do so, I hope the House will allow me to comment on the speech that we have just heard from the official Opposition. As usual, the hon. Member for Northavon (Mr. Webb) was gentle in his intervention.
    Unlike the hon. Member for Northavon, I have been in the House for 20 years. During that time, there must have been 20 occasions when the then Conservative Government attacked the national insurance principle, the national insurance system and the contributors who, over a long period, had built up what they thought were entitlements.
    Although it is always welcome when a sinner repents, and we know that there is much rejoicing in heaven when such an event occurs, when there is a mass conversion, as seems to be happening on the Opposition Benches, I am not sure what is going on up there. Their conversion is welcomed, but some of us feel that it is 20 years too late.
    Tonight we have been looking at the broad canvas of the Government's welfare reform programme. We spoke earlier about the single gateway and one of the most successful parts of that programme, the new deal. Labour Members rise with considerable pride to support their Government in the changes that they are bringing about through that programme. The Government are turning a largely passive welfare service into one that is proactive and that tries to help many of our constituents who were largely ignored by the Conservatives.
    There is a clear difference between the way in which this Government behave when reforming welfare, and the behaviour of previous Conservative Administrations. The Government have raised substantial sums from the privatised utilities to ensure that there is not just rhetoric, and that staff are not simply given more power to persuade some claimants that they should be more anxious to seek work. The Government have laid down a programme to ensure that there are real opportunities for them.
    It is noticeable that Labour Members speak about the new deal with pride and confidence. However, when we move to another aspect of the Government's reform programme—their reforms of or, some would say, cuts in national insurance—uncertainty is expressed on these Benches. Partly to counter those uncertainties, my hon. Friends and I tabled our amendments.
    When the Conservatives were in government and were hacking away at the insurance system, on at least 12 major occasions we in opposition spoke with one voice. We said that those attacks on the insurance system were an unwarranted attack on working-class values. In our communities there was a decency that sprang from wanting to look after oneself and one's family, and a real wish to pay those contributions.
    We attacked the Conservative Government for endlessly pushing our constituents on to means-tested benefits. We saw during those 20 years a welfare state

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    that was largely based on a system of people paying for it through their direct contributions being changed to one that was paid for largely by taxation and in which an ever-growing body of our constituents were dependent on means-tested assistance.
    At the end of the Conservatives' stewardship, one in three of our constituents were living in households dependent on one or more of the major means-tested benefits. We did not attack the Conservatives for ideological reasons; we did it because they had attacked the basis of the way in which our constituents tried to survive and live their lives. The Government were developing a powerful engine and teaching people not to work and not to save or, if they did either of those things, not to tell the truth.
    The reforms in the Bill affecting widows will affect older women and older men so I hope that all of us have received some correspondence—though perhaps not quite as large a correspondence as that which has already been received by one Member of the House—from people who contributed to the insurance system knowing that their wives, and then their widows, would be covered should their health fail.
    Those people are coming to the end of their working lives and may have contributed for 30 or 35 years. They would not have had the resources, even if they had had the freedom of not contributing to the insurance system, to make alternative provision for their spouses. That group in particular will be hardest hit by this reform. I hope that we will hear from those on the Treasury Bench an assurance on how that fits in with the programme of reform that the Cabinet approved in the first Green Paper on welfare reform and with the Prime Minister's more recent remarks about the kind of welfare state that he wants to be more firmly established in this country.
    In the Green Paper, the message was clear: we would move from the provision that we have now to provision that would increasingly place the emphasis on contract. We would do so because we thought that that would add not merely security in respect of how people run their own lives, but protection against attack from Governments, and because those benefits would be safer if there was transparency and people could see clearly what they were paying and what they were receiving.
    The Prime Minister has said more recently that it is his wish to move from a something-for-nothing society to a something-for-something society. All of us knew what he meant by that. Many of us would have felt that it was noble that some people should get something for nothing in our society, and that being dependent was a noble situation for many people to be in. Most of us read his speech as the country read it, quite properly—he would have a determined war and drive against those scallywags who think that they can take most taxpayers to the cleaners not once, but on many occasions.
    Given that it is the Prime Minister's wish for welfare to be based on something for something, it is difficult to justify the Government's changes in the provision for widows. We are taking away benefits—contributions towards which may have been made for more than 30 years-and substituting nothing, which is the exact opposite of what he says he is about.
    There would have been an alternative way to reform widows benefit—maybe one day this approach will be adopted—had we introduced universal and compulsory
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    stakeholder pensions reform that brought in age groups regularly as they came on to the labour market. We could have ensured that each of those groups had life cover on the back of their pensions cover. That would have been very cheap, because there would have been no cherry-picking from the private sector. Everyone would have been covered and we could have moved safely to seal the national insurance widows benefits for those who would have alternative provision. Sadly, that alternative is not on offer at the moment.
    I should like briefly to say what the amendments attempt to achieve. They attempt to ensure that women aged 35 and over will continue to be covered by the range of provision that they currently have—not only for the national insurance benefit, but for the state earnings—related entitlements which widows have. We are not trying to reverse the first or the second major attack made on SERPS by the Conservatives when they were in government; we are accepting SERPS as it stands as the status quo.
    Amendment No. 20 and subsequent amendments would ensure that women aged 35 or more continued to be entitled to their current entitlement. Younger women would be expected to have alternative insurance cover, as they would be in a position—if not financially, at least in terms of their age—to make that cover. In that sense, people would not be pushed on to means-tested assistance. There would be time to make those changes, and those who had paid for their entitlement would be secure.
    There are a number of amendments in this group, and I am sure that many hon. Members want to catch your eye, Mr. Deputy Speaker. Later, we shall need to consider which amendments should be pushed to a vote. As you know only too well, once we have finished with the Bill, it will go to another place. I am fairly confident—at least, I hope—that the amendments that my right hon. and hon. Friends and I have tabled will be moved in another place and will thus become part of the Bill for us then to reconsider in this House.
    As the House wishes to come to a major decision tonight on incapacity benefit, I shall not press these amendments at this stage. However, I hope that many of us will have an opportunity to express the disquiet that we still feel about this aspect of the welfare reform programme while rightly drawing attention with pride to other aspects, such as the new deal. I hope that, both here and in the other place, the Government will be in listening mode and that we shall have some progress to report when we debate that aspect of the Bill at a later stage.
    I am grateful to the House for allowing me to explain what these amendments are about and to hint at the disquiet that exists on these Benches about the attack on the insurance and contributory principle. Although we are grateful to be joined by that band of sinners opposite, we know that, ultimately, if the Government change their mind, it will be because they have listened to views from the Labour Benches. I hope that hon. Members will continue to press their views on the Government.
    Mr. Rendel: I am delighted to follow the two previous speakers, whose speeches I mostly agreed with. That will come as no great surprise to the hon. Member for Brentwood and Ongar (Mr. Pickles), with whom I found myself in considerable agreement on several of the amendments that he tabled in Committee on this part of the Bill.

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    I was interested in the points made by the right hon. Member for Birkenhead (Mr. Field), who seemed to come close to saying that if the Government accept the amendments, they will have fulfilled the requirement which the hon. Member for Brentwood and Ongar outlined—that the imposition of the changes that the Government are trying to introduce, particularly the cut in widows pensions, would be put off for a time. I hope that the Government will listen carefully because the amendments would allow them to overcome the fact that this measure would be a very 0sudden imposition.
    New clause 4 and amendment No. 2, tabled by my hon. Friend the Member for Winchester (Mr. Oaten) and I, address two different aspects of the problem. New clause 4 would allow those who would otherwise leave bereavement allowance after six months but who would then be on income support to continue to receive benefits up to the level of the bereavement allowance until they reached retirement age. I hope that, when the correct time comes, I shall have the chance to press new clause 4 to a vote.
    12.15 am
    Amendment No. 2 would have a different effect. It goes part of the way towards the move that was being made by the right hon. Member for Birkenhead in that it phases in the changes over a five-year period, rather than bringing them in straight away.
    The overall effect of the proposed changes in bereavement allowances will be a cut of some £600 million in the long term. The cut in widows pensions is larger than that. However, some of the changes that the Government propose are welcome, such as the extension of bereavement benefits to widowers. That was rightly forced on the Government through the European courts, but the Government have taken on board the need to make that change. We all respect the need for equality between the sexes in these matters, so it is right that benefits previously available only to widows are now being made available to widowers. That is a small extra cost compared with the proposed cuts in benefits.
    The Liberal Democrats also welcome the doubling of the bereavement payment from £1,000 to £2,000. It has not been raised for a long time. There is no question but that the extra costs involved in bereavement, such as funeral expenses, have gone up over time, and it is reasonable that the payment should be doubled. Again, the cost of that is small compared with the overall savings that the Government are making.
    Had the Government come to the House with a Bill that included a certain number of potential savings that they could justify on the basis that they were increasing some benefits—whether bereavement benefits or payments to widowers—and that the cuts were necessary to pay for the extra benefits, many of us would have been able to accept that. However, the difficulty that we have with the Bill as it stands is that the major, significant cuts to these benefits are not necessary to cover the extra costs. The Government are making some £750 million worth of cuts at a cost of only £150 million, which is a net cut of £600 million in the long term. We see no reason or justification for that.
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    The hon. Member for Brentwood and Ongar was kind enough to refer to some of the arguments that I used on a previous occasion. I contend that the six-month limit on the bereavement allowance is far too short to allow people who have been recently widowed to recover from their bereavement. Sadly, many of us have lost a close friend or relative, and we know that that can set us back for some time. Happily, most of us have not yet lost our spouses; some may never do so. I am happy to say that I have been married for 24 years, and I can only imagine what it must be like to face the loss of one's spouse after that length of time. It must be a shattering blow.
    We are talking about people who lose their spouses when they are still comparatively young. Sadly, the loss of the spouse will be a traumatic and unexpected event, perhaps as the result of an accident or even suicide. It is the traumatic and sudden loss that is most likely to cause the surviving spouse real trauma, which may take months to get over—certainly a great deal longer than the six months in the Government's proposal. That is far too short a time to enable the widows or widowers who are left behind to recover their lives and to have a chance of getting back into work.
    There is, however, a problem relating to the way in which, up to now, benefits payable to widows—which will, in future, be payable to widowers—were expected to make up not only for the amount that the woman involved might have earned later in life, but for the loss of the earnings of her partner who has died.
    In future, a number of people will undoubtedly find themselves bereaved, having expected to live another 10 or 15 years with the spousal income still coming into the family home. The loss of that income will be a significant factor for the surviving family. One of the reasons why people were happy to pay national insurance contributions in the past is that they genuinely believed that the payment was intended to take account of just that sort of loss of salary in the later part of their married lives. The fact that that is now being lost is, I think, a reason for those people to believe that a genuine contract between the state and the individual is, sadly, being broken as a result of the Bill.
    In some cases it will be too late to do anything about this, although such cases would certainly be met by the amendments tabled by the right hon. Member for Birkenhead. Some people—such as a gentleman who has written to me—will find that, although the wife may have never expected much more in the way of salary to come in from her husband, it is now too late to make alternative arrangements. A man who wrote to me recently said:
    "as a State Pensioner I am not now in a position to make alternative widows pension arrangements. I am 65 years of age, had major heart surgery and my wife of 24 years is only 51 years of age, as a profession she provided a home"—
    spent her life providing a home—
    "for my two daughters"
    and for him; and now she takes care of him. She has not had
    "the training to earn a salary on my demise."
    Such a woman would not expect much further salary to be brought in by her husband but, because of the almost immediate effect of the Government's proposed cuts, there is now no way in which her husband—already of pensionable age—can make any sort of alternative arrangements to ensure that his wife would not be not driven into deep poverty were he to die in the near future.

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    The Government have said all along, and no doubt will say again today, that their proposed changes are intended to help the most needy. They want, perhaps, to take a little money from those who do not really need it to provide a bit more for the least well-off. One of the Government's arguments in Committee was that a great many people who currently receive widows pensions do not need the money all that much, because they are receiving some other form of income.
    We have already heard the argument that such benefits rely on the contributions of ex-spouses. There is a strong case for saying that those who make insurance payments when young have a right to expect insurance pay-outs when they are older, and that it is necessary for those who are putting something in to be promised something at the end—that we should have not a nothing-for-something but a something-for-something society. If the Government really wanted to target the neediest members of society in making the big cuts that they are making, they would feel confident about giving a little more to the very neediest. That is why our new clause 4 directly addresses that point.
    There will, of course, be some widows who are comparatively well off. Some widows will perhaps find it comparatively easy to get over the death of their spouse. Some will find it easy to go back into work and to earn an income in later life, but there will always be others for whom that will not be easy. There will always be others who do not come into the richer category, whom the Government seem happy to deprive of their benefits. There will always be others who depend on means-tested income support. It seems unfair that their widows pension should be removed, with no alternative means for them to obtain income.
    If the Government's wish to give back to the poorest some of the money that they are taking away from the comparatively well-off is genuine, surely they should see the point of new clause 4—all we ask is that at least those who are bereaved and who then depend on income support should have their incomes raised to the bereavement allowance amount, which they will receive only for six months, and for which their husbands have paid through a lifetime of earnings and contributions. It is for that reason—to follow the Government's own theme of trying to give back a bit more to the most needy—that we hope that the House will accept new clause 4.
    Mrs. Dunwoody: All Parliaments and all Governments have been known from time to time, when they found themselves in control, suddenly to decide that the things that they were attacking when in opposition were not quite as dreadful as they initially imagined. It is not exactly a new phenomenon, but it is one that some of us find difficult to accept.
    I hope that the hon. Member for Brentwood and Ongar (Mr. Pickles) will not misunderstand me if I say that I was irresistibly reminded of the walrus and the carpenter when he told us how he wept for us and deeply sympathised. Those of us who know what happened to those for whom the walrus had that warm streak of sympathy will remember what the Conservatives did when they had control of the national insurance system.
    All Governments take political decisions. They decide what their priorities are, what is important to them and to those who support them. Therefore, it should be accepted that the amount that will be saved by the change may not
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    be quite the world-shattering amount that it appears to be on first acquaintance. Indeed, what we should be considering are the implications of the decisions of those who, having for many years accepted the idea of a national contributory scheme, at this juncture, with very little preparation and very little open discussion, are now prepared to abandon one particular aspect of it, which will affect a group of women who are least able to cope.
    It is not a well-founded theory. I find it difficult to accept, not just because I have always strongly supported the idea of contributory schemes and resented what the previous Government did to SERPS, but because it is partly a generational thing. Many women who will be affected by the changes will not have had jobs, will not have qualifications and will find it impossible to find employment. They will find it almost unimaginable that, after their husbands have for many years contributed to a scheme that they regarded as a form of insurance, they will not be able to benefit.
    There may be a number of ways of equivocation; there may be a number of wonderful phrases; there may be a number of theories—but those who say that there are good things in the Bill, that we will support four-year-olds, and that we will make major changes in various sectors that will target help at the least comfortable, have a duty to say why that should be done at the cost of a group of people who are themselves extremely frail and vulnerable. I do not mean that they are physically frail. However, they are at a time in their lives when they will find it extremely difficult to cope. I do not believe that they have been given sufficient warning of the changes.
    12.30 am
    I do not believe that the principle behind the changes is defensible, and I very seriously ask my hon. Friends on the Treasury Bench to think about what we are doing tonight. Do we genuinely believe that those things to which we have contributed, and the principles on which we have built our political platform all these years, are so unimportant that they can be thrown over for, in Government terms, not a very large amount of money? If that is their case, I do not accept it. Even if the vote does not go as we wish tonight, before the measure goes on to the statue book this particular, rather grimy little law will be examined in much greater detail. It may be found to be seriously wanting.
    Miss McIntosh: Cutting the bereavement allowance after six months for widows without dependent children is a disgraceful act. I should like to recall one personal experience during the general election campaign to explain the misconceptions that were put around by the Labour party when it realised that it was on the verge of entering government.
    I was, exceptionally, out campaigning with my husband, who—in the last week of the campaign, for the first time—devoted himself full-time to canvassing. It was a new role for him, and I and many of my supporters in the Vale of York welcomed him to it. In Rawcliffe, on the outskirts of the city of York, in my constituency, he called at one door where he was met by a recently bereaved lady, a lifelong Conservative voter who had no family and felt—as my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) felt when his mother died—completely bereft.

    783
    The lady was completely alone, grieving for her husband. She probably could not afford a financial adviser, but was completely taken in by Labour's claim that if the Conservatives were re-elected to government in May 1997, the state pension would end or be cut.
    Mr. Hayes: Ha.
    Miss McIntosh: My hon. Friend may laugh, but the lady was taken in by the claim. Initially, she closed the door on my husband. Subsequently, however—as she had been a lifetime Conservative voter and, as she admitted, had been fooled by Labour's rhetoric—she followed my husband down the street in tears.
    The fact is that a Conservative Government would have increased the state pension and allowed additional top-up contributions to private pensions for those who could afford to make them and wished to do so. As we now know, the Labour party was able in the general election campaign to propagate a complete, but very successful misconception about our position on pensions.
    The Government's Budgets and the provisions of this Bill, which the Government are today pushing through the House, demonstrate that it is the Government who want to cut pensions. It is now becoming apparent that, most regrettably, the Government want to cut bereavement allowance for the most vulnerable people—recently bereaved women. The change would be most regrettable for women between 45 and 60 without dependent children, as their payments would be cut after six months. As my hon. Friend the Member for Brentwood and Ongar said, those women have no children to tide them through possibly the most difficult period of their lives. They are probably not in a position to take financial advice.
    It is regrettable that we are also seeing the end of the contributory principle. I hope to strike a chord with Labour Members when I say that the proposals go to the heart of the post-war Beveridge system. There are wide ramifications that we should pause to consider. If the Government succeed in ending the contributory principle, how far will they seek to go? It is insulting to husbands who have paid their contributions in good faith, often over a long time—10, 15 or 20 years—particularly in cases where there is an older husband and a much younger wife. They have been taken in by the Government. Means testing will damage them considerably. Widowed women between 60 and 64, many of whom are reliant on savings, are also net losers under the Government's proposals.
    We are seeing the unravelling of the Beveridge system. The Government are no longer entitled to call themselves the people's Government. They have made a mockery of their own phrase this evening. I hope that I shall have an opportunity in the next few months to knock on the door of my constituent in Rawcliffe and assure her that had the Conservatives won the election two years ago, she would not be in the position that she will find herself in under the new provisions.
    Mr. Eddie O'Hara: This is a major social welfare Bill. It is being debated in the context of many generous improvements in social welfare by the Government, affecting all age groups: child benefit, nursery provision, the new deal for the young
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    unemployed, the extension of the new deal to the older unemployed, the billions spent on schools and the national health service, and numerous enhancements to the living standards of pensioners, including increases in pensions, the minimum income guarantee, cold weather payments and the reduction of VAT on fuel bills. Clauses 46 and 47 also extend bereavement allowances and payments to widowers and double the bereavement grant to £2,000.
    However, there is another context. I do not want to be confrontational with a Government who have been responsible for all that I have just described, but I want dialogue with them about the effects of some of their measures on a group of people who concern me, as chairman of the all-party group on ageing and older people. The widows and widowers affected by the provisions can be of many ages, but typically they are of middle age, either side of state retirement age.
    Let us consider a widow in her 50s, who has been out of the job market for some time, who does not have many marketable skills and who perhaps had a low-paid, part-time job supplementing the family income while her husband was alive. At the moment, she has the cushion of a non-means-tested widows pension to enable her to continue to get by in that job or get another job as needs be. Under the new proposals, the means-tested element in the bereavement allowance may be a disincentive to finding employment or staying in employment, because her earnings may go above the threshold.
    Let us also consider a widow over 60. Currently, she gets a bereavement payment if her husband was drawing the state pension. There might be a case for improving that and saying that a widow over 60 should get a bereavement allowance if her husband was not yet drawing the state pension. Under the proposed system, her situation will worsen and she will lose the payment altogether.
    Those are yet more examples of a feature of recent tax changes to which I have drawn the attention of Treasury and Social Security Ministers in this House. Older people—male and female—on either side of the official retirement age are finding that their incomes are under attack from an array of recent tax changes, of which the bereavement allowance and bereavement payment proposals are but the latest.
    Add to those the abolition of tax credits on dividends, the abolition of tax relief on new home income plans and the monumental fiasco of the changes to SERPS—for which the Government are not responsible; that fiasco was perpetrated by the previous Government—and we have a picture of older people who have done exactly what the Government wish all people to do in future: they have made financial provision for themselves or their spouses in old age. However, they have found that the goal posts have moved and their expected incomes have been salami-sliced. Juvenal usually had a line for a rum situation, and this is one. Juvenal's line was "probitas laudatur et alget"—probity is praised and is left out in the cold.
    I ask the Government to consider their proposals for bereavement benefits in the wider context of their impact, together with other changes, on the incomes of the people to whom I have referred. If the Government cannot find a way during the passage of the Bill to help those people, I appeal to them once again—in friendship and

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    fraternity—to stop attacking that group and, when they have an opportunity in future, to find some way of being more generous to them.
    Mr. Hawkins: We have heard three distinguished speeches from three senior Government Back Benchers, none of whom significantly supported the Government's policy. All of them have criticised it—although, admittedly, all three spoke more in sorrow than in anger.
    Unlike those Labour Members, I am angry on behalf of my constituents. I have referred to the fact that I have started to get letters on the matter, and it may be that other hon. Members have received letters also. However, I can promise hon. Members that they will get a lot more letters after tonight's debate. An awful lot of Labour Members will be getting letters from their constituents, who will be asking why they did not tell them what was going to happen.
    I do not blame the Pavlov's dogs who have been left to try to defend the indefensible from the Front Bench. I blame the guilty men who are absent—the Chancellor of the Exchequer and the Secretary of State. They have left the monkeys to try to defend the indefensible while the organ grinders are safely abed. It is outrageous that the guilty men are absent and are not prepared to face the music on this or subsequent clauses, where they will be under even more fire from their own Back Benches. They cannot be bothered to defend this proposal in public.
    Mr. Swayne: The last time we were faced with such a situation, the then Secretary of State at least showed up—although the Treasury Bench was entirely abandoned by the right hon. Lady's colleagues.
    Mr. Hawkins: My hon. Friend is quite right.
    I was particularly struck by the apt quotation from Juvenal given by the hon. Member for Knowsley, South (Mr. O'Hara) about probity being praised but left out in the cold. That quotation applies, above all, to the right hon. Member for Birkenhead (Mr. Field), who was originally asked to think the unthinkable. When he started sticking with probity and principle-he would not have introduced the changes that we are debating—he was left out in the cold.
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    12.45 am
    Earlier this evening, by accident, I saw a Labour party political broadcast. It was not a broadcast of hon. Members in this debate talking about abolishing the widows pension and forcing widows on to means-tested benefits; it was full of the usual smug, sanctimonious claptrap. There was nothing about European policy, about which the Labour party is clearly ashamed; it was supposedly a party election broadcast for the European elections, but it talked entirely about domestic policies. It did not admit the truth because today's Labour party knows that if it tells the truth about its policies, nobody will want to support it.
    We want to expose the truth about new Labour policies, as the three Labour Back Benchers have already done. The hard-faced, uncaring new Labour party is not fit to call itself a caring party. A constituent wrote me a letter which I received this very day. He said:
    "An unbelievably unfair change is proposed … How can it be right?"
    He had never received any verbal or written information about what the Government intended. He said:
    "This reduction would cause considerable hardship to my wife should I pre-decease her … I feel very strongly that this proposed legislation should be withdrawn."
    The letter ends with a request to forward it to the Secretary of State, but I am unable to draw the matter to his attention tonight because he does not dare to come and listen to Labour Back Benchers—former Ministers—attacking the Government's policies.
    This is a betrayal of all that the old Labour party claimed to stand for. If Ministers had any guts, they would demand that the Secretary of State come and face the music and they would listen to my hon. Friends the Members for Brentwood and Ongar (Mr. Pickles) and for Vale of York (Miss McIntosh), and to the hon. Member for Newbury (Mr. Rendel), who made valid points attacking the proposals.
    The proposals are an outrage and a betrayal of what new Labour said at the general election. They should be dropped and the new clause should be substituted for them.
    Mrs. Maria Fyfe: I subscribe to what my hon. Friends have already said. I want to concentrate on the position of the 45-year-old widow with no dependants. Until now, such a woman would have had up to 15 years' widows pension, up to the age of 60. From that, we are going to the extreme of having only 26 weeks' widows pension.
    I urge the Government to rethink their policy, because they are treating all women over 45 without dependants as though they were in identical circumstances. A small minority of women are well-off in their own right. A woman might have a good salary or a substantial pension from her husband's employment. Better-off families will have taken out insurance so that, when either spouse dies, the mortgage will be paid, but plenty of families cannot afford such insurance.
    At the other end of the income scale, women on income support have the widows allowance deducted pound for pound in any case. The circumstances of a vast swathe of lower-paid women in the middle are not being sufficiently regarded. The vast majority of working women are in jobs that pay less than the male average wage. Some have been on very low pay and are only now beginning to benefit from the national minimum wage. Some will not have been working at all while raising their families. A woman's family might have left the nest only recently, leaving her on her own.
    Why are women in that position being given only six months to find work, training or other means of support? Mention has already been made of how traumatic it is to be suddenly widowed. The widow has to get over that pain and distress and launch herself into a career that she might not otherwise have had, with all the difficulties that one can imagine for someone whose skills have gone rusty over the years. Why make no distinction between the different circumstances of women? Why treat all women as if their circumstances are all alike? It does not make sense.
    I was amused to notice that the Bill provides that the benefit would not be payable on remarriage. That was a sensible provision in the context of a span of up to 15 years, but suggesting that widows will remarry after six months reminds me of Hamlet describing Gertrude as remarrying in time to serve the funeral meats at the wedding feast. I wonder how many widows marry again within six months of bereavement. I suggest very few. The vast majority will have to launch themselves into the world of work.
    I beg Ministers to reconsider this issue. The Government have done good work helping other groups having difficulty getting back into work, in particular through the new deal for under-25s. Why is insufficient notice taken of the needs of that middle-age group of women? We need a new deal for widows, not the treatment that the Bill will give them. I urge the Government to rethink that aspect of the Bill.
    Mr. Brazier: At this stage in the evening, the blood sugar is getting low and the House is often fairly empty, but the quality of the speeches that we have heard in the past hour or so is enough to energise anyone. I think in particular of the right hon. Member for Birkenhead (Mr. Field), and I also regret missing part of the speech
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    by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). I was reminded of just how much is at stake in this issue.
    The three worst features of the changes that the Government are making in social legislation are combined in the provision that new clause 1 seeks to address. First, the provision would undermine the contributory principle and force people into means testing. Secondly, it would hit an especially vulnerable group in an especially obnoxious way, while saving relatively little money. Thirdly, it would put one of the final nails into the coffin of one of the few measures left in the tax and benefit system in which marriage still plays a part.
    In an excellent opening speech, my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) admitted to some wearing of sackcloth and ashes for the record of the previous Government on means testing and the contributory principle. The right hon. Member for Birkenhead chided us mildly—and all the more effectively—for the number of times that we departed from the contributory principle.
    I would rightly be chided by you, Mr. Deputy Speaker, if I were to repeat the points that I made on Second Reading, but I wish to tell the House that the great conversion came for me when I saw the massive impact on pensioners' saving behaviour of the changes the previous Government made in 1988. Some 500,000 pensioner households ditched their savings when they discovered that they could live better off the state than by retaining their savings and providing for themselves. We slapped in the face those who had sought to use their modest savings to top up their retirement income and rewarded those who did no such thing.
    A smaller group would be affected by this provision, but it is an especially vulnerable group. I do not wish to cover the same ground that so many hon. Members on both sides of the House have covered so effectively, but I wish to throw in three brief thoughts of my own.
    The first concerns the position of someone who has just lost their husband, someone who—as several Labour Members have said—may have been earning for long periods, but has not had a proper career in any sense that we would recognise. All the work may have been part-time. It may have been full-time work, but at a miserably low wage. It is one thing to expect that person to re-enter the labour force, but quite another to expect her to do so and find work within six months. Realistically, the earning power of someone who has not had a proper career —a person of that age who may have been out of the world of work for a bit—is very small. It is hardly fair to choose to take money from that group of people.
    Secondly, if we are to say to people who have lost husbands, and who are grieving, "We shall not look after you all the way through", surely it must be possible, simply out of common humanity, to give them longer than six months. If the Government want to put aside the contributory principle, there is surely a case in elementary decency for more than six months. The sums involved are relatively small. When the existing generation has worked its way through, only a few hundred million pounds a year will be saved. If we were to extend the period from six to 18 months, the cost would be in tens of millions, not even hundreds of millions.

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    I shall conclude with a political point, which I should like to share once more with the House, which is remarkably well attended for almost 1 o'clock in the morning. Repeatedly, at every stage of the Bill's passage, whenever Conservative Members have said, "The Government pledged themselves to make people more self-reliant but now they are introducing more means-testing," we have had the same jibes—from Ministers. I am not talking about distinguished Back Benchers who have maintained the same view throughout. Ministers have jibed, "Look at all the means testing that the Conservatives introduced."
    I have news for the Government. One reason why they were elected two years ago was that a lot of ordinary people, including many who had always voted Conservative, were fed up with the undermining of the contributory principle, and they believed the then Leader of the Opposition—the present Prime Minister—when he said that he was going to get back to the contributory principle and give a hand up, not a handout. Many people decided, for the first time, to cast their vote for the Labour party, not for us.
    I remember the fury among some of our party workers at some of the changes that we made, and I have the following message for the Government. The Government have picked on many vulnerable groups in the Bill, but I doubt whether any of the picking has been quite as mean as the picking on widows.
    Mr. Jim Cousins: The House finds itself in genuine difficulty in discussing such an important and complex matter at such an hour, but I gently say to Conservative Members that, in those circumstances, we should pay regard, not simply to their strategies as a Government over 18 years, but to their tactics tonight, in the last nine and a half hours of debate.
    Like several of my hon. Friends, I am troubled by the removal of an entire category of long-term contributory benefits. That important and significant step may have ramifications and consequences for other issues on other occasions. We should think again.
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    My right hon. Friend the Member for Birkenhead (Mr. Field) pointed out that benefits can be replaced on the private market, but the sums of money required to buy substitutes are far in excess of the savings of most of the people whom Labour Members represent. They are far in excess of a lifetime of savings for a working family. That should make us cautious as we consider this matter, reminding us that the collective savings of working families, expressed through national insurance contributions, are a basic, inescapable building block of our social security system. They should not be chipped away.
    I am disappointed by the Government's proposals. In short-term bereavement allowances, they have dealt with the problem of equality between men and women and come up with positive and imaginative solutions. Yet, in the proposals before us now, there are important gaps. My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) rightly reminded us that people who return to the labour market in their 50s find it a tough and raw place. Good opportunities are scarce. The Government intend to make more opportunities and to
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    support people who take them, but they should recognise that men or women who have been full-time carers and who, between 45 and 55, find themselves back in the labour market after a bereavement require special support that goes beyond six months.
    The Government should also recognise the link between these proposals and the Budget's proposals for an employment tax credit for the over-50s. Can the Ministers assure us that the short-term bereavement allowances introduced by the Bill, which are new, will be a qualifying benefit for access to an employment tax credit on return to the labour market, even though that credit, in its present form, is just a short-term support?
    May I draw to the Government's attention the situation of women who have been on widowed mothers allowance? When their children cease to be dependent, they will find themselves with no support at all. The average age at which that occurs is 51. The position for those women is difficult and traumatic.
    Mr. Rendel: Has the hon. Gentleman considered the possibility that such a woman may no longer have a dependent child because the child may have died? That would be an even more traumatic circumstance in which to be left with nothing.
    Mr. Cousins: Clearly, if there were time, it would be possible to devise all sorts of circumstances that could heap upon the misery of those women. That is not my intention.
    At termination of widowed mothers allowance, when children are no longer dependent, women require support. The Government's proposals lead to complete withdrawal of widows benefits and pensions. I urge the Government to think again. At a better time, in better circumstances and in a better mood, I hope that we may return to this matter and find better proposals.
    Mr. Brady: Despite the late hour, I am pleased to follow such powerful speeches in this important debate. I mention in particular the contribution of my hon. Friend the Member for Canterbury (Mr. Brazier), who powerfully criticised the Government's proposals, saying that they undermine the contributory principle, attack those who are most vulnerable and remove one of the last vestiges of recognition of marriage in the tax and benefits system. I can think of no better way to crystallise everything that is wrong with the proposals in the Bill.
    Like hon. Members on both sides of the House, I have received many letters from constituents who are concerned about these matters. What struck me most strongly was not merely the concern of those who have been widowed and are anxious that proper provision should be in place for others who may face a similar fate and circumstances. Sometimes, the most moving letters were from elderly husbands, to whom the hon. Member for Newbury (Mr. Rendel) referred. Frequently, they are much older than their wives and are of a generation who have felt a total responsibility to care and provide for their wives. Also, in many instances, they are men who are quite ill and who have written to me in some distress and anguish feeling that, because of the changes, they may not be making proper provision, and are letting down wives for whom they have cared for so many years and for whom they believe that they should continue to care.

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    All that I can tell them is that I believe that the contributory principle should be maintained. It is an important principle in the welfare system. In some ways, it is the most important, in that it contains an element of contract. People have paid in expectation of securing a benefit. In this instance, perhaps more than any other, they have paid in the expectation of securing a benefit not for themselves but for others who may be left in need of support in difficult circumstances later in their lives.
    The right hon. Member for Birkenhead (Mr. Field) welcomed sinners on the Opposition side of the House who repent. I was left wondering what was the appropriate phrase for the opposite situation. Hon. Members who have been in the House for longer than I have will remember that, when this matter was raised by the previous Government, the then Opposition spokesman responsible, the right hon. Member for Oldham, West and Royton (Mr. Meacher) said:
    "I want to make it absolutely clear that the Opposition unequivocally reject the revised proposals on SERPS".—[0fficial Report, 28 January 1986; Vol. 90, c. 834.]
    At that point, the then Opposition were unequivocal on the matter. It was a principle that had to be defended. Far from being sinners who repent, they were virtuous believers in a principle that was important to them. Apparently, they now feel that it is appropriate to sin.
    Mr. Hawkins: My hon. Friend mentioned the anguish expressed by a number of husbands and the inconsistencies on the Labour side. Does he agree with one anguished husband who has written to me to draw attention to the fact that, once before, someone who professed to be Labour robbed pensioners—the late Robert Maxwell. Are not the Treasury Bench the spiritual inheritors of the mantle of Robert Maxwell?
    Mr. Brady: I thank my hon. Friend for that colourful illustration, but perhaps I should not be drawn on that at a late hour in a serious debate in which some Labour Members have made thoughtful contributions.
    Mr. McWalter: The hon. Gentleman talks about the contributory principle. Does he agree that clause 53(4) allows some people who have not made contributions to be treated as though they have? They have made contributions, but not of a financial nature. People who receive invalid care allowance who may not have a recent work record would be protected by that principle. Does he agree that extending contributory rights to those who have not been able to make them is valuable?
    Mr. Brady: The hon. Gentleman makes an interesting point. However, the Government are extending not contributory rights but some rights to benefit. That may be reasonable, but it does not, by definition, involve a contributory right because no contribution has been made to secure it. The Bill would snatch away rights for which contributions have been paid. That is where the contributory principle is undermined. He may have a reasonable point, but it does nothing to lessen the abuse of taking away something that was paid for in good faith. People have a right to expect what they paid for, and those who have contributed on behalf of others over many years have a right to expect that it will be maintained.
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    Many people who are drawing to the end of their working lives face legislative changes that affect the benefits for which they have contributed and permanently affect the well-being of those for whom they care. However, there is no long run-in, no recognition that the measure should apply only to those who can make alternative provision. It will come into effect quickly, with no opportunity for people to make such provision. It will affect many people who cannot contemplate private provision. For them, this is the most appalling betrayal, because they have paid.
    Mrs. Louise Ellman: In view of the hon. Gentleman's concern for the fundamental importance of the contributory principle, will he commit the Conservative Opposition to restoring it where they summarily removed it, such as with earnings-related unemployment pay and in the undermining of the state earnings-related pension scheme? That profoundly affected the individuals who suffered.
    1.15 am
    Mr. Brady: Sadly, the hon. Lady cannot make me commit the Conservative party to anything. The critical factor is what her party and Government are doing. I think that she would do herself more credit if she were to take responsibility for her stance and that of her right hon. and hon. Friends on the Treasury Front Bench. That is the issue on which she, and her right hon. and hon. Friends who are not safely tucked up in their beds at this hour, will be judged when the time comes. They must remember the pledges and unequivocal statements that they made in the past. They should look to those and try for some record of consistency and principle.
    Ms Diane Abbott: I shall speak briefly on the regrettable Government proposal that is before the House. It will not do for Ministers to wrap it up in spurious feminism, claiming that the world has changed, women have moved on, women all work and they do not need the present provision. The world has not changed that much and the majority of women, particularly working-class women, still earn less than the majority of men. It is unrealistic of Ministers to imagine that women in their 50s, who perhaps have never worked or have worked only part time, can re-enter the labour market at a time of bereavement and hope to earn the sort of income that widows benefit would have provided.
    I remember when my mother died. It took me much longer than six months to recover from that. It must be much worse if a partner in life, with whom one has lived for 20, 30 or 40 years, has died. Six months after that, Ministers are expecting unskilled and semi-skilled women to go back into the labour market. The spurious feminism that I have heard about in the past will not do.
    Secondly, there is the idea of alternative provision. It has been said already that to make such provision, people would have required notice of the Government's proposal. Moreover, it would require sums well out of reach of most of my constituents. Why should people put their money into private sector provision, with the huge rake-offs in commissions and up-front fees, when they thought that they had a contributory system available to them, to which they had contributed throughout their working lives in good faith?

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    We have seen much briefing in the press during the days running up to the debate about how Ministers will be tough on these issues and face people down. We have been told that Ministers will show that they have backbones of steel. I say gently that it is not necessarily the most desirable thing to be tough on widows and the disabled.
    Last week, we had a set of election results in Scotland and Wales which were variable in their quality. We were told by Millbank—I always believe what Millbank tells me—that we had such a low turnout in parts of Wales because people were so happy and pleased with new Labour. That was why they did not bother to come out to vote. However, I shall put forward an alternative theory, accepting that the results in Scotland and Wales were complex and there were different phenomena in different parts of the country.
    For our core electorate—the people who stuck with us throughout the 1980s when many of those surrounding new Labour or in positions of high office in new Labour were nowhere to be seen—it is matters such as those before us which make them wonder, "Is this really our party after all?" Even if we are not able to reverse the Government's proposal, I believe that at another time and in another place, the Government's unfitting and rather mean proposal will be taken out of the Bill.
    Mr. Hayes: I have listened with great interest to the contributions of Labour Members, perhaps with even more concentration than I listened to the contributions of my colleagues. We have heard most interesting criticisms of the Government's position from Labour Members, and not always from the most expected quarters. I was particularly interested in the speech of the right hon. Member for Birkenhead (Mr. Field), who talked with unnecessary generosity about the Prime Minister's facile remark about the something-for-nothing society. I accept that it was just a facile remark in what was an otherwise banal speech. The right hon. Gentleman may have been excessively generous for that reason.
    However, the right hon. Member for Birkenhead will understand, because of his distinguished record in these affairs, that many right hon. and hon. Members on both sides of the House found the Prime Minister's remark a flagrant attack on some of the most disadvantaged, desperate, needy and defenceless people in our society. There are those of us on both sides of the House who believe that there are some people who deserve something for nothing. They deserve compassion, care and even our indulgence. They have very little to give in return. Those who are most disadvantaged in our society do not believe that they should give something in return for that care, compassion and charity.
    The idea of compassion for the needy being part of a trade-off is unacceptable to many of us, but it does not surprise me that the idea has currency with the Prime Minister. If we are sinners, we are venal sinners. He is a mortal sinner, and an unrepentant mortal sinner. I shall not take the right hon. Gentleman too far down an Anglo-Catholic road, but it is important to recognise that Labour does not have a monopoly on care and compassion, or on regard and concern for disadvantaged and needy people.
    Labour never has had such a monopoly, throughout the history of this place and of British politics. The Conservative party has a proud history. I shall not go
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    into it—[HON. MEMBERS: "Go on."] You would not let me, Mr. Deputy Speaker, but you and other hon. Members are fully aware of that proud history.
    The right hon. Member for Birkenhead also spoke of his admiration for working class culture. There is nothing incompatible between that admiration, which I share—a belief in preparing for the future, in putting by for tough times, and in making provision and taking responsibility—and my earlier remarks. Working—class culture is also compassionate, caring and concerned for those who cannot put by for the future. That acceptance has always been a central part of our welfare state.
    The contributory principle is valuable and important, but it does not mean that everyone should be obliged to contribute. Those who cannot contribute and those who are most desperate deserve support. The least fortunate deserve support from the most fortunate. That must be said time and again, particularly when we are governed by such a Prime Minister and Government.
    My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) set the tone when he dragged out his great-grandfather—not literally, I hasten to add. Perhaps that was fortunate, because we all have a great-grandfather in the cupboard whom we can drag out to prove our credentials. While the grandparents of some liberal bourgeois Labour Members were no doubt founding the Woodcraft Folk, or writing pamphlets about the Spanish civil war, my grandfather was on the dole, a chairman of his local branch of a trade union and campaigning for the rights of other working class people to improve their lot. We do not need any lectures from the other side of the Chamber about working class culture or the need to support working class communities.
    The right hon. Member for Birkenhead spoke with proper admiration for that culture, but I believe that he was referring to a deeper strain—the idea that we should look to the future, and that man is not here by accident, but is a product of his past and has a role in looking to his future. Man is linked to both past and future; preparedness and responsibility for the future are thus a fundamental instinct in humankind. It is the antithesis of the hedonistic live-for-today attitude that characterises the worst extremes of pop culture.
    The right hon. Gentleman is right to draw our attention to that. The attack on the contributory principle implicit in the measure is an erosion of values which are bigger than working class culture. It is a deeper instinct still. That attack is also an attack on the trust of the people—[Interruption.] If the hon. Member for Halton (Mr. Twigg) wants to say something about his working class roots, I am happy to give way. I am not sure whether he has any, so perhaps he does not want to intervene after all.
    The attack on the contributory principle is a breach of people's trust in government. The contribution that people make is based on a proper expectation of what they were told they would receive at the end of the contributory period. The undermining of trust implicit in the measure not only damages the working class culture to which the right hon. Gentleman drew our attention, but undermines people's faith in good government. It also undermines people's trust in the promises that they were given-year by year, by successive Governments—about what they would receive when they fell on difficult times.

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    No time is more difficult than when one loses a loved one. I do not want to dwell on that, because it has been spoken about already, but, as my hon. Friend the Member for Brentwood and Ongar said, most of us have been through some form of bereavement and understand some of the tensions that it creates. His honest remarks contrast starkly with the assurances given in the Budget speech by the Chancellor, who said that
    "the Budget will increase the income of all pensioners."—[Official Report, 9 March 1999; Vol. 327, c. 174.]
    Does not that look pretty strange in the light of the measure that is before us tonight?
    That calumny was reiterated in the Inland Revenue press release on the Budget, which said:
    "Widows will be more than compensated by the loss of this allowance by the proposed Bereavement Payment in the Welfare Reform and Pensions Bill."
    The end of widows bereavement allowance, which would be worth up to £197 in the new tax year and £285 this year, will certainly not leave widows better off and will not increase the income of all pensioners. Widows will not receive any degree of equivalence.
    It has already been said that the change will harm the interests particularly of widows aged between 60 and 65 who will no longer be entitled to the benefit. It has also been said, but needs amplifying, that the six-month rule is at best—and I am being extremely generous —very harsh, given what we all know about bereavement and the status of people in the job market at that stage of life, to which the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) referred. Her point concerned that generation of women who find themselves in the job market, and peculiarly and particularly disadvantaged because of their historical situation.
    Administration of the new allowance will now be carried out by the Department of Social Security and the benefit will be available only to widows and widowers under retirement age. The change is not aimed at improving the lot of widows and widowers; it is about saving money. It would be better if the Government came clean and did not hide behind the pretence that, somehow, people will be better off. We all know that they will be significantly worse off. The change is about saving money and filling the coffers of the Exchequer in a fairly grubby way. If that money were reallocated to another good cause or to similar groups, one might be able to justify the reform, but there is little evidence of that. The net cost to widows of £600 million is highly unacceptable to Members across the Chamber.
    The change also needs to be seen in the context of the other pressures that fall on elderly people and on these widows. We should not ignore the fact that the abolition of mortgage interest relief at source affects older people as well as younger ones; and, I suggest, disproportionately affects people who bought their own council house in their 50s. Following the Thatcher legislation in 1980, a lot of working class couples in their 50s decided to buy a house for the first time. Almost 20 years down the line, some of them find themselves still with a mortgage. I can say that with some authority, because my parents were in that category.
    Tax credits on dividends have been abolished, people continue to pay tax on savings income and the married couples tax allowance has been abolished, too.
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    Older people were excluded from that, but people coming up to retirement age—60 or 65—would have continued to receive that allowance for some time.
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    Therefore, we need to see the change in the context of a wider attack on the elderly and on a range of disadvantaged groups. I do not want to anticipate the heated debate that the House will have later on disabilities, but it would be remiss of me not to mention the context of disabilities, because many old people and widows are also disabled. Those groups overlap. We should remember that some 70 per cent. of disabled people are over retirement age. It is therefore important to consider these matters in an holistic fashion.
    Mr. Hawkins: Does my hon. Friend agree that it is important to reflect on what our hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) said in drawing a comparison with the Government's television campaign, which talked about paying pensioners back and used the phrase "They owe you"? Given all the changes that the Government are making—introducing stealth taxes and attacking pensioners—is it not the case that the Government owe the widows?
    Mr. Hayes: Yes. I—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I think that we have now sufficiently explored the width of the context, and the hon. Gentleman would do better to bring his remarks back into focus on this new clause.
    Mr. Hayes: I had no intention of allowing my hon. Friend the Member for Surrey Heath (Mr. Hawkins) to seduce me into pursuing a subject that would meet with your displeasure, Mr. Deputy Speaker, and test the patience of the House. It is important, however, that we understand that widows may well fall into one of the other groups that have been targeted for particular treatment by the Government, which is why I mentioned disability.
    This is a grubby measure. I am not the first to describe it as such; that word has already been used by Labour Members this evening. It is negative, spiteful and draconian. I hope that the House will reject it and that the people of this country will see it and understand the sort of Government with whom they are dealing. I hope that many Labour Members who have been brave and bold enough to criticise their Government will remember that as we discuss other matters later tonight, when they may have a chance to register their compassion, care and concern, and their contempt for this sort of attack on vulnerable people by the Government.
    Mr. Alan Simpson (Nottingham, South): I wish to speak briefly in support of the tranche of amendments tabled by my right hon. Friend the Member for Birkenhead (Mr. Field). I begin, as he did, with a recognition of how much praise and credit the Labour party deserves for founding the welfare state, which Labour built up and has been responsible for constructing and maintaining. Labour fought to resist its erosion by the previous Conservative Government—
    Mr. Quentin Davies: There are some things that one should not be allowed to get away with, even at this time

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    of night. Is it not a bit rich for the hon. Gentleman to say that the Labour party built up the welfare state when we are now talking about defending widows pensions, which were introduced by a Conservative Government in 1925?
    Mr. Simpson: The strengthening of widows pensions was among the first tranche of measures that the Labour Government introduced in 1945—
    Mr. Pickles: 1948.
    Mr. Simpson: The Labour Government of 1945 laid down the building blocks of a welfare state, based on universality and rooted in the contributory principle. However much of a hair shirt the Conservatives now wish to wear in accepting the damage that they have done to widows benefit, we should not be deluded into believing that that somehow makes them the defenders of a universal and inclusive welfare state. That is about as convincing as Rupert Murdoch proclaiming his support for a contributory tax system.
    When the Conservatives were in office they got someone else to make the commitments and contributions. Their notion of equality was based on the principle of hitting the old just as hard as the young, and of treating the not so young as badly as those who were not so well. That is the history of their 18 years in office. Labour has inherited the remnants of that destructive period. We should treat their hair shirt confessions with some caution.
    I should also put in context the unexpected and belated conversion of the Liberal Democrats to new clause 4. I was pleased to see that they have come round—I knew that they would, but not this soon. Yet that party has found more ways to spend a penny than any other in political history. A universal and inclusive welfare state cannot be funded entirely from a one penny increase in tax revenues.
    The Labour party wants to preserve and modernise the welfare state. Our position must be tested against the benchmarks that are important to the Government in the refounding and reforming of the welfare state. We make great play of the fact that the Labour party is committed to the family, and to marriage in particular. I am not sure that we should focus on the centrality of marriage instead of having a more inclusive view of families, but that is one of the benchmarks that we have set ourselves. We have also set out our stall as a party that encourages responsibility and that values the things that we hold in common as much as those we have constructed for ourselves as individuals.
    I ask Ministers to measure the proposal on the restriction of entitlement to widows pensions against those three benchmarks. I think that the proposals breach all three commitments. The national insurance principle is a contributory principle. Millions of families, whose members are spread across several generations, believe that they have been part of that contributory principle, and that it gives them some guarantee against an uncertain future. People believe that there is a safety net which, in the event of an early and unexpected death, will leave their widow with an entitlement based on contributions already made. We cannot wipe out that history of contributions or condense it into a six-month period and pretend that that is still the basis of a universal and inclusive provision.
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    We must recognise that millions of people still believe that, under the national insurance structure, widows benefits form the foundation of a modest income that may be supplemented by earnings. Whether a person is male or female, the prospect of finding work in their 40s and onwards is not great. All Members of Parliament in their constituency advice surgeries have heard a litany of complaints from older workers who feel that they have been abandoned by the labour market. They constantly refer to their experiences of seeking jobs and being told that they are past their sell-by date. It is a tribute to them that they continue to look for work, but we ought not to pretend that this is a process whereby a declaration of intent to look for work will magically secure the opportunity. Bereavement compounds the problems that older workers experience in pursuing secure and reasonably paid employment.
    I am sure that most Members of Parliament will have received letters from Age Concern and many other groups. We are, in fact, vulnerable to the criticism that the changes will mean that the Labour Government are themselves guilty of a form of pensions mis-selling. Age Concern has sent details of people who have received letters from what is now the Department of Social Security, dated 1979, 1987, 1991, 1994 and 1998, all telling men that their wives would be covered, and would receive widows pensions. One sentence from such men comes up time and again: "I am now too old to make any alternative plans for my wife".
    The amendments tabled by my right hon. Friend the Member for Birkenhead (Mr. Field) address just how far back we ought to set the benchmark relating to those whom we continue to include in the current provisions governing the contributory framework for national insurance. All who have made such contributions will no doubt tell us that, to a certain extent, we have been obtaining money on false pretences. They believed that they were contributing to the common pot of national insurance, on the basis that it would be there for all at the point at which it would be needed. In that context, we are in danger of constructing something that is close to retrospective legislation. It is retrospective in the sense that all who have already made contributions are in danger of seeing those contributions being taken from under their feet not just by a change in future commitments on social policy, but by a reneging on past commitments.
    We should also consider what bereavement means as a personal experience. I do not think that the House has begun to scratch the surface in considering the impact of the death of a partner. Seeing a partner die makes huge demands not only on a person's work prospects, but on that person generally. It makes demands on the person's social confidence; it makes the person introspective, in that he or she must simply get through life day by day, week by week. The point at which death occurs is the beginning of what is often a long grieving process. The idea that the process can be limited to six months—the idea that people can be told, "That's your lot, get yourself sorted out, get out there and get a job"—does not remotely equate to the real-life trauma that many people, especially women, experience in the process of nursing a partner to a dignified death.
    I think it demeaning to talk about time-limiting, or cash-limiting, the entitlement to six months. To compensate for the cash losses for a woman of 55—what would amount to more than £21,000 in the five years that

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    would take her to retirement age—we would now offer £1,735. That is a derisory exchange, given the human and personal commitments that would have been made over, perhaps, many years of nursing care.
    1.45 am
    It is also an impossible message to sell. How on earth do we tell people, as the legislation goes through, that the only way to deliver the widows benefit that they had hoped would be in place for their spouses is to do a Captain Oates and say, "I am going out now and I shall be gone for a while." We cannot say, "You have to act quickly before the legislation comes in. Die now while stocks last." That is hardly a commitment to a new, refounded welfare state, based on the principles of social inclusion and universality.
    I hope that, when the Bill goes to another place, Ministers will take the opportunity to reflect on the fact that the House has other choices. It has better and more inclusive choices. I hope that, when the Bill comes back in its final stages, we will have found a way in which to honour and to extend widows' benefit rights, rather than contracting and limiting them.
    Mr. Oliver Letwin: I am, for once, grateful to have been called in the debate after many hon. Members have spoken—perhaps, for all I know, near the end of the debate. It has been a fascinating debate. In the course of it, I have understood much better some of the points that I wanted to make from the beginning. What has become clear is that we are discussing two separate, but connected issues. The first relates to the specific question of widows and their payments on bereavement.
    In case Ministers do not do so in their answer to the debate, I should explain what I take to be the logic behind the Government's proposals on the precise question of widows. It is part of a general logic. If I were going to defend the Government's proposition on widows, I would say what the Government would say, if they were honest, about a range of their social security measures: the Government no longer accept what my hon. Friend the Member for Canterbury (Mr. Brazier) referred to implicitly, which is that with certain categories of person, regardless of their income, it is right to recognise their need for extra payments, or for reduced taxation, which come to the same thing, but in different ways. That is as true of the married couples allowance—which, obviously, I am not able to speak about tonight—as it is of widows benefit.
    If they were defending their position against new clause 1, the Government would say, "We do not accept the idea that widows as widows have any right to any special payment on bereavement. For political purposes, we will admit to payment for six months." However, the six-month limit makes no sense. There is no logic to six months. While we are at it, there is no logic to a limit of three or nine months.
    Mr. Duncan Smith: It is plucked out of the air.
    Mr. Letwin: Indeed. It is plucked out of the air for understandable political reasons, but the proposition that
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    underlies that arbitrary six months is the fundamental one that circumstance should not count. In the Government's view, only one circumstance should count: income.
    That is a reasonable proposition; it is rational. However, it is wrong because of two consequences. The first involves incentives; the right hon. Member for Birkenhead (Mr. Field) has talked many Labour Members and now, thankfully, almost all Conservative Members into recognising the argument. The proposition that it is always lack of income, and only lack of income, that should attract payment from the state, or reduction of tax from the state, is an incentive always to reduce, rather than to increase, income at any stage in life. The right hon. Gentleman has written lucidly and powerfully about that. In the Bill and in many other measures, the Government have forsaken the principles that he has enunciated.
    The second reason why circumstances should count is that we should be giving positive incentives to people. In this case, we should be giving people incentives to save and to contribute; in other cases, they should be given incentives to look after themselves and to behave in certain ways—such as to enter stable relationships for the sake of children. If we do not admit the principle that certain circumstances, quite apart from income, are ipso facto a reason for being treated differently from other people, we sweep away the whole argument for using the tax and benefit system as a means of creating a better society and preserving that which is good in our society.
    The conception that certain circumstances are not a reason for different treatment—if that is what Ministers believe—is a profound misconception. If that is not their conception, the argument for doing away with widows benefits collapses entirely. If one admits that circumstance is a reason for increased payments from the social security system, who could possibly be in a circumstance more meritorious and needy than someone who has been bereaved?
    We have been discussing two issues: the first is that of widows; the second is a broader and deeper one, on the contributory principle. I should like to enlarge a little on a debate, which, although it has been very interesting, has not quite yet got to the nub of the issues.
    It is clear that the contributory principle is a very special thing. It is not like a contribution or a contract between an individual and a private scheme, and I think that many hon. Members on both sides of the House will agree that that is a very fine thing.
    As the right hon. Member for Birkenhead said, a principle in the Green Paper, and for the Prime Minister, has been to encourage private provision. However, private provision has a characteristic that contributions to the social security system can never share. More importantly, contributions to the social security system have a characteristic that private schemes can never share. Private schemes can never be as diversified as contributions coming compulsorily to the central pool. Compulsion is the basis for universality—which is the principle that I think that the hon. Member for Nottingham, South (Mr. Simpson) had in mind.
    Mr. Edward Garnier: I am fascinated by the debate, and am delighted that I stayed up to listen to it. [Interruption.] I may be mad—and I hope that my hon. Friends will help me out when I am old—but I think

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    that my hon. Friend the Member for West Dorset (Mr. Letwin) is alighting on a very important point. We talk about the contributory system, but are we not simply talking about a form of taxation?
    Mr. Letwin: I am delighted that my hon. and learned Friend stayed up, not to listen to me, but to alight instantly on a point that is far distant in my speech, towards which I was gradually wending my way. My answer is no—I do not think that the contributory principle is a form of taxation. The problem, however, is that the Government do. I shall try in a moment to explain just what I mean by that.
    The difference between contribution in social security and contribution to a private scheme is that, in a private scheme, a person is looking after himself or herself—[HON. MEMBERS: "Here he I certainly do not attribute the arrival of the Secretary of State to my own eloquence, but we are honoured by his presence.
    In a private scheme, in which an individual looks after himself or herself, the individual necessarily is an economic proposition; otherwise, the private scheme would not be taking him or her on. All the other individuals in that private scheme also are economic propositions—which is a fine thing; there is nothing to be said against it. I think that my hon. Friends on the Front Bench will agree that any proper long-term provision for old age and the many other vicissitudes of life depends greatly on private provision. However, it will never satisfactorily wholly depend on private provision; neither will it ever satisfactorily wholly depend on means-tested benefits for those for whom private provision fails. There must be a middle portion that is funded by compulsory contribution into a pool that is sufficiently diversified for there to be a transparent link, in the words of the right hon. Member for Birkenhead, for those who, throughout their working life or for a large part of it, do not constitute economic propositions for private providers between what they contribute and what they receive. That link is not between the amount that they contribute and the amount that they receive, as in a private scheme, but between the fact of contributing and the fact of receiving. That is the huge distinction between contribution and tax.
    Mr. Garnier: Might I not have the same feelings about the payment of tax and what I eventually receive in an old age pension or another form of benefit?
    Mr. Letwin: I am particularly grateful to my hon. and learned Friend for that intervention, which moves me on to the next phase of my argument. My answer to his question is again no. When I make a tax payment, I do not believe that I have any right to expect particular results. For a long time, the House has recognised that distinction through the consolidated fund. We have also recognised that it is legitimate to change entitlements and tax regimes more or less willy-nilly, year after year, without trying to go back and ask whether someone making a tax payment in previous years had any contractual expectations.
    Mr. Hayes: Will my hon. Friend give way?
    Mr. Letwin: Of course I shall in a moment.
    That was a great distinction between the tax system and the contributory system. Those who fostered and preserved the contributory system always imagined that
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    there would be a framework of legitimate expectation and that people would not retrospectively make changes that falsified those expectations.
    Mr. Hayes: I am sorry to harass my hon. Friend. Is his point that obligation produces a certain type of trust? The difference between a compulsory system managed by the state and a private contract that one might enter into, like a business deal, is that the obligation engenders a certain expectation and trust that is peculiar to the system that we are talking about.
    Mr. Letwin: My remarks seem to be so unpleasing to the Secretary of State that he has left the Chamber again. [HON. MEMBERS: "Back to bed."] I hope that he rests well.
    My hon. Friend is right. Part of the point of the contributory system as it was understood is that it creates a bond of trust in the framework of legitimate expectation, but it also does more, creating clarity for people who would otherwise lack it about the fact that they are contributing to their later benefit. It creates a sense of responsibility that would not be possible for them in private schemes because they are not economic propositions. It transfers a large part of the population, widows in this case, from being legitimised beggars looking to the state for money to being upstanding, proud people who have contributed—either personally or through a spouse on their behalf—to something that they receive.
    We all know that distinction as it is felt by people in this country. Despite the efforts of the Government, which I applaud, there are still hundreds of thousands of pensioners who refuse to draw income support, because they make in their hearts the distinction that I am trying to make in our minds between contribution and receipt of unmerited benefits.
    Mr. Garnier: Is my hon. Friend suggesting that the taxation system and the contribution system should be engines of social change? I thought that the old Labour party used to stand for that.
    Mr. Deputy Speaker (Mr. Michael Lord): Order. Before the hon. Gentleman responds to that, I think that we are getting wide of the mark. He ought to talk more specifically about the new clause and the amendments.
    Mr. Letwin: Of course, Mr. Deputy Speaker. I stand admonished and I shall not say more than yes. I believe that the tax and social security system should be used as a framework to try to create proper relationships between individuals and the state and proper relationships between one individual and another. There is nothing harmful in that.
    This is a defining moment for the Government and their social security policy and for my party and its attitude. To take the second first, there is no doubt that the right hon. Member for Birkenhead was right to say that we were grossly at fault. In trying to save money in the social security system, we frequently attacked both the contributory principle and the principle that means testing should not be extended. Ironically—horribly ironically—the results of our efforts to save money by doing those two wrong things were to increase vastly social security spending; a point made in opposition and now in government by the Prime Minister, who frequently thinks that he is still in opposition.

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    2 am
    Tonight is a defining moment for my party, because we must promise ourselves that we will never again make that mistake because we will have learned the lessons that the right hon. Member for Birkenhead has taught us all these years.
    Mr. David Ruffley: In seeking to justify the abolition of non-means-tested widows benefit, the Government have said that only 16 per cent. of widows benefit recipients are on income support. Does my hon. Friend agree that there has been no calculation of the numbers who will have to go on to income support as a result of the abolition of widows benefit?
    Mr. Letwin: My hon. Friend—as usual, with his acuity about Treasury matters—is absolutely right, and it is typical that the calculations often omit hidden costs. However, the situation is worse. It is not just a question of the immediate effect of the measure, but the collective effect of a range of measures of which this is one of the most important. Together, they will vastly increase the propensity to move to a position where means-tested benefits are attractive. That has a colossal systemic effect on the bulk of social security spending.
    It is a defining moment for the Government tonight. If they stick to their guns—admirable as that may seem in moral terms—against their own Back-Bench feeling, which is very strong tonight, they will be engaging in precisely the mistake that we, to our great cost, have learned that we made and which we are promising ourselves tonight not to make again.
    The only purpose of Ministers imposing this arbitrary six-month limit on widows benefit—they do not hate widows any more than the rest of us—and in getting rid of that bit of the contributory system in which, in principle, they believe is to save some money. They have been told to do so by the Treasury because it has decided that tax and social security are all one, and that the big aim must be to save money. The tragic irony is that the Government will not achieve that.
    Two or three years' hence, the Government will end up discovering—to their astonishment—that, yet again, as in the past two years, the social security bill has gone way up. Hey presto, they will discover a new range of benefits that they can clobber and new means testing that they can introduce. Yet again, social security spending will go up. The widows will have lost, but the taxpayer will not gain.
    What makes it so surprising that the Government are adopting that position is that it was a Labour Member—someone who was, for nearly two years, a member of the Government in charge of these matters—who made us all see the light. Yet they are wearing a mask to protect themselves from this light because they have been told to do so by the Treasury. That is extraordinary.
    I beg the Government to listen, not just to their own Back Benchers but to the lesson of the recent economic history of this country. The Government's whole project depends critically on containing social security spending. In that, they are right—but this measure will not do it.
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    It will have the opposite effect in the long term. If they learned that lesson, they would deserve and get—I hope—our praise.
    Sir Peter Emery: I have listened to the two and a half hours of debate since my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) moved the new clause. I do not normally speak to the House at this time—[Interruption.] Well, I have not for the past 20 years, but I did for the 20 years before that. I do so tonight for a number of reasons.

    If this new clause, which we are trying to correct, had been introduced by a Conservative Government, there would have been uproar from a Labour Opposition. Labour Members would have been incensed and would have rolled out all aspects of the terrifying prospect of a Government determined, once again, to attack the pensions and benefits system. I find it strange to have to remind Ministers of how they would have behaved if the proposals had been introduced by a Conservative Government.
    The measure has been condemned in many aspects, but what is so sad is that it is unnecessary, because it does not save much. My hon. Friend the Member for West Dorset (Mr. Letwin) is absolutely right. The cost of benefits will rise and any saving from the measure will be a drop in the bucket. For that very reason, it is mean. It is the meanness that I object to, on behalf of my constituents.
    Many people will consider that their husbands have paid for them to have a pension. They will have believed that they were protected and will suddenly find that they are not. The Government will have to do a lot to make certain people understand what they are doing. They should not do it in the dark.
    My constituency contains the second largest proportion of retired people, at 38 per cent. Many of those people have much younger wives. [Laughter.] Some may laugh, but I am delighted for the older men, because they are being properly looked after, and surely hon. Members of all parties can admire that. I hope that it happens to them when they get older.
    Mr. Bercow: I hope that my right hon. Friend will not take it amiss when I say that, from my own extremely stimulating visit to his constituency some years ago, I seem to recall that he himself has a substantially younger, and extremely agreeable, wife.
    Sir Peter Emery: Who, I am very glad to say, looks after me extremely well.
    What position will the Government be in when many women who become widows find out that they have been taken for a ride, in that their husband's contributions have not brought them the benefit that they expected? Members of Parliament will be inundated with letters of objection. If the Government are intent on pressing ahead, they must be much more frank than they have been in publicising the effect, because some people will want to take other measures to replace the protection that currently exists for their wife when they die.

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    I cannot understand why the Government persist. They must know in their heart of hearts that they are not doing something to be admired. They must know that. I say to Labour Members, you know that you do not like this or approve of it.
    Mr. Deputy Speaker: Order. The right hon. Gentleman, of all Members in the House, knows the correct parliamentary language.
    Sir Peter Emery: I do indeed, and I apologise. It must be the hour. Nobody in the House believes that the Bill should pass unamended: new clause 1 would be of great benefit to everybody in the country and it deserves support.
    Mr. Swayne: My right hon. Friend the Member for East Devon (Sir P. Emery) is right to draw attention to what will happen when the letters arrive. Earlier in the debate, several hon. Members mentioned the letters that they had received. I have received no letters, but I believe that the public have yet to cotton on to what is happening. Those letters will come and many Labour Members will find answering them very disagreeable.
    I found some two hours ago that Ministers were at their weakest when responding to our criticisms of Government new clause 15. However, one of their arguments resonated with me, although it was treated somewhat dustily by many of my colleagues. Perhaps I am more gullible. I was persuaded by the Ministers' argument about their motive. They said that it was their perception that some people were escaping their obligations and not paying the level of national insurance contribution that they should be paying. The Ministers' estimates were probably incorrect, but the motive behind them had some resonance for me. However, in the context of these provisions, the incentive to pay up and make proper contributions is undermined by the way that we will all be treated in the future.
    I entirely understand those hon. Members on both sides of the House who have dwelt on the plight of widows-often movingly—and of elderly men who recognise their frailty and are concerned about how their wives will manage after they have gone. However, the Government's proposal should concern everyone, and not only widows and elderly men. It is a question for all of us, because we will all be short-changed by this measure. Our legitimate expectations will be undermined.
    The hon. Member for Hemel Hempstead (Mr. McWalter) made a telling contribution when he intervened in the speech by my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady). Indeed, my hon. Friend gave a dusty response to the important point made by the hon. Gentleman when he drew attention to the importance of imputing to people contributions that they could not otherwise make because we approved of the activities that they were undertaking. That is a good and responsible measure, but I am tempted to ask to what end we would do that now. What is the point of imputing contributions when we are set on abolishing the contributory principle? That will be the effect of this measure. We will move away from the contributory principle to means testing.
    It has been said before, but it bears repetition, that the previous Government greatly extended means testing. As a policy, it was not a success. It certainly failed to achieve its principal purpose of restraining the rise in the social
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    security bill. However, one of the most depressing features of life since 1 May 1997 is the inability of the Labour party to learn from that experience.
    2.15 am
    I urge the Government to recognise the problems that we faced and the problems that they now face. Astonishingly, as the debate has proceeded, I have heard three Labour Members sort of shuffle away from the debate, saying, "We might not press our amendments tonight, we might not sort this out tonight, but we hope that these matters will be properly addressed in the other place". After the debates in recent months about the nature of the other place, Labour Members would do well to press their amendments tonight if they have any honour and honesty.
    Mr. Timms: In Committee, we had a very serious debate on this part of the Bill; on the whole, we have done so again tonight. In Committee, we debated several permutations for extending bereavement allowance. I shall tell the House the reasoning behind the reforms that we propose, and explain why we believe that we are doing the right thing.
    First, the widows benefit system that we inherited was hugely out of date. Thousands of people are unfairly excluded from the benefit each year, simply because of their gender. Conservative Members have said remarkably little about that tonight, but I suppose that that is not surprising.
    We are modernising the system by extending benefits to bereaved men for the first time, giving widowed fathers the support that they need through the new widowed parents allowance—support to which they have never previously had access. That is a huge step forward. Let me emphasise for the benefit of some Conservative Members that the widowed parents allowance is a wholly contributory benefit. It is an extension of the contributory benefit system to people who have never had access to it before. It is an extension, not a reduction, of the contributory benefit principle.
    Secondly, and equally old-fashioned, the current system is based on the assumption that wives are wholly dependent on their husbands. That has not been the case for a considerable time.
    Mr. Pickles: The hon. Gentleman says that this is an extension of the contributory principle. Will he confirm that, because women accumulate a smaller amount of national insurance contributions, it will not create equality because the level of allowance that a widower will receive as a result of his wife's contributions will be less than a widow will receive as a result of her husband's contributions?
    Mr. Timms: No. Through the widowed parents allowance we are greatly extending the contributory benefit system to many people who have not had access to it before. The hon. Gentleman's argument is misleading because women's contribution records are very rapidly catching up with those of men.
    Mr. Pickles: One cannot use phrases like "are very rapidly catching up" in this context. The fact is that women's contribution records are considerably behind.

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    In future they are bound to catch up, given time, but now and for the next few years they will be less than the equivalent of male contributions, and therefore widowers will receive a lesser pension than widows will. It is common sense.
    Mr. Timms: The amount of contributions will not affect the level of allowance that widowers receive, but it will determine whether people are entitled to receive that allowance.
    In Beveridge's time, when the current system was designed, only one in eight married women worked. Today, seven out of 10 do—a proportion almost as great as the proportion of men who work. As a result, women's national insurance contribution records are catching up.
    Dr. Lynne Jones: Has my hon. Friend discussed the proposal to curtail widows benefits with the Minister for Women? I understood that it was Government policy to involve issues concerning women's disadvantage in the mainstream of Government policy. Even when women are working full-time, they earn far less than men, and the disparity is greater the older they are. Given those facts, are the proposals not discriminatory against women?
    Mr. Timms: I can reassure my hon. Friend that our proposal has the full agreement and assent of every member of the Government, including the Minister for Women. National insurance contributions records for women are catching up with those of men.
    The third flaw in the system is that it pays money to people who have substantial provision of their own, while simultaneously failing to provide adequate support for those who need help most. It does not distinguish between those who need continuing help and those who do not. Those who earn decent wages or who have substantial occupational pensions or life insurance see the greatest benefit from the system as it stands. The least-well-off widows receive the least. Some 35,000 widows see no gain from their widows benefit because they have to have it topped up in income support. Widowers receive no help at all.
    Mr. Rendel: The Minister says that he does not like the present system because it does not give more help to the poorest. Am I correct to say that if he cuts widows pensions for everyone, that will not give more help to those who are poorest?
    Mr. Timms: I do not entirely follow the hon. Gentleman's logic. I shall come to his amendment in a moment.
    Mr. Bercow: Will the Minister give way?
    Mr. Timms: No, I need to make some headway.
    I have outlined the background to the problems that we inherited in the present system. We are introducing reforms that will bring the system up to date, delivering support to those who need it. No one on the Opposition Benches mentioned the fact that we are doubling the lump sum benefit paid on bereavement from £1,000 to £2,000.
    Mr. Pickles: I mentioned it.
    Mr. Timms: I beg the hon. Gentleman's pardon. I am grateful to him for informing the House of something that none of his hon. Friends mentioned.
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    We want to provide help with the immediate costs that face people following bereavement. We are ensuring that the system helps the least-well-off widows and widowers with children and on income support. They will be entitled to an additional premium of £10 a week through a new disregard of the widowed parents allowance instead of having their benefit deducted pound for pound. We are also providing long-term, non-means-tested contributory support for bereaved mothers and fathers with dependent children through the widowed parents allowance. That is equivalent in value to the current widowed mothers allowance.
    I ask the House to support Government amendments Nos. 63, 64 and 65, which correct a minor drafting error in clause 48 to make sure that widowed mothers and fathers receive the full pension that they are entitled to at retirement age. As well as providing continuing help for those who most need it, we recognise that people need breathing space to come to terms with the emotional and practical upheaval caused by the loss of their spouse. We have rightly heard a good deal about that, and we propose that the new bereavement allowance should offer financial support to widows and widowers aged over 45 and without dependent children for the six months following bereavement. I suggest that that is a reasonable period of adjustment.
    Mr. Malcolm Wicks: I have listened with care to speeches from both sides of the House and have heard many hon. Members talk about the inadequacy of the six-month period, given the nature of bereavement. Given the weight of argument, would the Minister at least agree to reconsider the period?
    Mr. Timms: No. This is a question of balance. Having considered the matter carefully, we think that we have struck the right balance.
    Mrs. Fyfe: Will my hon. Friend give way?
    Mr. Timms: No, I need to make some progress. [HON. MEMBERS: "Give way."' I shall be pleased to give way to my hon. Friend later in my speech.
    The hon. Member for Vale of York (Miss McIntosh) said that we were moving away from the principles of the Beveridge system. I took the opportunity to look back at what William Beveridge said about widows benefits in 1942. He rejected universal cover for all widows regardless of need. It is important to recognise what the Beveridge principle was in this respect. The report said, although it is in terms that I would not use:
    "There is no reason why a childless widow should get a pension for life, if she is able to work, she should work. On the other hand, provision much better than at present should be made for those who, because they have to care for children, cannot work for gain or cannot work regularly."
    It is important to remind the House of that because, from the comments of the hon. Member for Vale of York and some of the other comments made in the debate, one could easily get the impression that these things were fixed in tablets of stone years ago by our forefathers and cannot possibly ever be changed. That is not the case. The truth is that we need continuously to review the way in which the system works and reflect in it the changes that have occurred. In that way, we can ensure that the system meets current needs and does so effectively. We will have

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    a stronger benefit system as a result. Simply refusing to change things—saying that we cannot change anything, as a number of people have said tonight—would mean that the system would not meet the new needs that it must address.
    Miss McIntosh: My point was a more serious one. I think that hon. Members on both sides of the House accept that one has to move with the times. I associate myself with the remarks of the hon. Member for Hackney, North and Stoke Newington (Ms Abbott), who said that the Government are trying to score a cheap feminist point. I particularly want the Minister to answer this question: what about the expectations of husbands who have contributed for a substantial number of years and whose contributions will be worth nothing when, as has been put on the record this evening, the savings will be so minimal that the Government will not help the category of people whom the Minister says that he wants to help?
    Mr. Timms: The hon. Lady may well want to put that question to those who were on the Front Bench when the Conservative party was in government and to ask them why they made the huge changes that they did to the contributory benefit system during their 18 years in office. I wanted to raise that matter myself.
    Mrs. Fyfe: I happen to agree with Beveridge. Speaking as a widow, I do not believe that widows should be kept by the state for life, but I object to the six-month period. Will my hon. Friend expand on what made him and his colleagues arrive at six months? I do not believe that most middle-aged women could get into work or training in that space of time.
    Mr. Timms: The judgment is a balance. We want a reasonable breathing space to allow people to adjust to their new circumstances and then move on. That is what the six-month period will do.
    Those who are aged 55 or over at the start of the new arrangements and who are widowed in the first five years after the changes are implemented will be able to claim income-related help without signing on for work—my hon. Friends the Members for Crewe and Nantwich (Mrs. Dunwoody) and for Glasgow, Maryhill (Mrs. Fyfe) asked about that. Particular help will be available transitionally, and there will be a special premium in the income-related benefits to help ensure that people's income remains at the level of the six-month bereavement allowance.
    It would not be right to assume that younger widows and widowers, many of whom will already have regular employment, should settle into a lifetime of dependency. We have a firm commitment to help men and women to be financially independent, both during their working life and in retirement. We are putting policies in place to achieve that.
    We have introduced a comprehensive welfare-to-work programme, which offers a wide range of support to help people back to work, including advice on employment, training and benefits. In particular, I would pick out the new deal for the over-50s that was announced in the Budget, which will provide a personalised service for people who have been on benefit, jobseeker's allowance, income support, incapacity benefit or severe disablement
    810
    allowance for more than six months to help them return to work. Bereavement allowance is not included in that list. My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) made an interesting point about that, but it is not in the list as it stands. The new deal will offer people a £750 in-work training grant.
    2.30 am
    Mr. Cousins: I want to clear up this important point. The Minister rightly drew attention to the introduction of the employment credit system for the over-50s. Is he telling the House that short-term bereavement allowance will not be a qualifying trigger for access to it?
    Mr. Timms: That is correct. People would need to spend a further sixth months on one of the other benefits to qualify for the new deal for the over-50s. A spin-off benefit of what we propose is to ensure that people can be put in touch with this support at the earliest stage, in six months rather than delaying longer.
    Mr. Ruffley: Will the Minister give way?
    Mr. Timms: I will not because I must make some headway.
    Our reforms will refocus expenditure where and when it is most needed: on immediate needs, children and families. We are concentrating help on the immediate period of bereavement and, where necessary, providing carefully focused help to those most in need thereafter.
    Several Opposition Members suggested that changing the rules for contributory benefits is a breach of promise. They spent 18 years doing that. We will take no lectures or crocodile tears from them on that front. A series of Conservative Members, including a Front-Bench spokesman, apologised in Committee and tonight for the record of their Government. I will be interested to hear whether the shadow Secretary of State will echo them.
    Mr. Letwin: Will the Minister give way?
    Mr. Quentin Davies: Will the Minister give way?
    Mr. Timms: No, I need to conclude.
    Our measures modernise bereavement benefits. It is right that the benefit system should reflect changes in our society. I understand the attraction of the argument that we should leave things as they are, and that some people believe that it is in the interests of those who depend on the benefit system to do so. It is not. If we hand out benefit to people who plainly do not need it, we undermine the system. It saps confidence in the national insurance system that underpins it and, in the long run, those who depend on the system are the losers. That is why modernisation is so important for those of us who believe in the system and in the potential of publicly delivered welfare to improve people's circumstances in a decent, dignified manner.
    Things do not stand still. It does no favours to those who depend on the benefit system to behave as though nothing has changed. If we are spending benefit cash to

    811
    meet yesterday's needs instead of today's, we are weakening the system and damaging the interests of those who need support. The capacity of the system to meet need will always be constrained. To insist on continuing to meet yesterday's needs means only that we will be unable to meet today's, let alone tomorrow's. There are big new demands that the system needs to address. We must ensure that the capacity to address them is in place without making unrealistic demands for new resources. That is what we are doing.
    Fifty years ago, one in eight married women worked; today it is seven out of 10. The benefit system needs to reflect that change. Some 47 per cent.—almost half—of widows receive income from an occupational pension; 50 years ago, it would have been unusual. That change has consequences for the benefit system that it must reflect.
    Audrey Wise (Preston): Will the Minister give way?
    Mr. Timms: I cannot give way.
    According to the latest labour force survey, of the minority of women aged 35 to 54 who are not working, only 16 per cent. had not worked in the past five years. That is a small proportion. The benefit system must reflect those changes. If it does not, it will be weakened and those people—widows, widowers and others—who depend on it to provide security will be the losers. We will not allow that to happen. I urge the House to reject the new clauses and the Opposition amendments.
    Mr. Pickles: We know now that when a Minister is in trouble he puts his head down, sticks to his brief, and ignores everything around him, including arguments and reasons. The Minister's speech was a disappointing end to a fine debate which has included some interesting and intelligent contributions. I am sorry that the Government seem to be so obdurate when so many Labour Back-Bench Members and Opposition Members are doing their best to dig them out of a hole. The debate has continued for more than three hours, and it is remarkable that there have been only two loyal interventions from Labour Members. With the notable exception of the Minister, not one speech has been made in support of the Government's proposals.
    Mr. Rendel: Does the hon. Gentleman agree that one of the most disappointing features of the Minister's response to the debate was when he was challenged on six months? He was asked to say what evidence he had to support his suggestion that six months was the right period. Does the hon. Gentleman also agree that not one of the organisations that deals with widows has said anything other than that six months is far too short a time? I know that he has several letters similar to those that I have received.
    Mr. Pickles: I agree with the hon. Gentleman. I have not come across anyone, with the exception of those who occupy the Treasury Front Bench, who thinks that six months is acceptable. I have considerable time for the Minister, but I am unhappy about the way he responded to the hon. Member for Croydon, North (Mr. Wicks). The hon. Gentleman made a reasonable suggestion. He said,
    812
    "Maybe we should have a think about this. Perhaps we should pull back from this. Perhaps we should consider a figure other than six months." The Minister just said no and moved on. That is insulting to a senior Member of this place.
    Mr. Letwin: The Minister is laughing.
    Mr. Pickles: I am sorry that he is laughing.
    It is also insulting to the House that we have not had the continued presence of the Secretary of State. The right hon. Gentleman has been in his place for exactly five minutes. If he was able to break off from the pensions debate last week systematically to tell Lobby journalists how he would crush the rebels, he should have the decency to be here in front of the rebels to tell them how he will crush them.
    There have been some notable contributions from both sides of the House. Some were very amusing but mostly they have been sombre. That reflects the fact that what we are about to do is shameful. I think that I heard the Minister say—he was going at such a gallop that I cannot be sure—that people on contributory benefits were part of dependency.
    Mr. Letwin: Yes.
    Mr. Pickles: My hon. Friend agrees with me. If that is what the Minister said, and his civil servants do not try to erase it or paint it out in Hansard, it is the clearest indication that we could get that he does not understand the contributory principle and the basis of someone paying into a national insurance scheme so that, if times are bad, he can take out what he has been paid in.
    Mr. Letwin: If my hon. Friend thinks that he may have misheard the Minister, does he agree that the Minister went on to say that we should not—I think that I quote almost ipsissima verba—hand out benefits to those who do not need them. That is undermining the entire contributory principle and announcing that means testing will be the sole basis of the whole system.
    Mr. Pickles: I regret that that is the only way in which the Minister's comments can be construed. I hoped that it was a slip of the tongue. If it was not, the Government are in deep trouble.
    Mr. Bercow: Does my hon. Friend also recall that in response to the intervention from the hon. Member for Birmingham, Selly Oak (Dr. Jones) the Minister failed to confirm that support for the Government's proposals had been forthcoming from the Minister for Women, or even that that Minister for Women had been consulted? He merely gave a blithe, bland and meaningless reassurance that Government policies commanded the support of all Ministers, including the Minister for Women. He failed to answer the specific question whether the Minister for Women was consulted directly, yes or no.
    Mr. Pickles: That is true, but, in fairness to the Minister, perhaps he cannot remember who the Minister for Women is. Who can blame him?
    The Government are in a terrible hole. They will have to rethink the measure. It will not get through another place in its present form. We are conscious that votes give

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    people mandates, and that the decisions of this place affect the other place. We want to give the Government a chance to rethink. We do not want to paint them into a corner. It would be easy to kick them about now, as they seem to have lost the support of every thinking hon. Member on their Benches.
    We believe that the Government should be given one last chance to rethink. I am firmly convinced that another place will send the measure back for our further consideration. In order to enable the Government to climb down, as they must do in the interests of justice, I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.

  New Clause 2

    AGE ADDITIONS
    'For section 79 of the Social Security Contributions and Benefits Act there shall be substituted—
    "79.—(1) A person who is above the specified age and who is entitled to a retirement pension of any category shall be entitled to an increase of the pension, to be known as 'age addition'.
    (2) Where a person is in receipt of a pension or allowance payable by the Secretary of State by virtue of any enactment or instrument (whether passed or made before or after this Act) and—

    he is above the specified age; and

    (b) he fulfils such other conditions as may be prescribed,

    he shall be entitled to an increase of that pension or allowance, also known as age addition.
    (3) In this section 'specified age' means an age specified by the Secretary of State in regulations.
    (4) Age addition shall be payable for the life of the person entitled, at weekly rates to be determined by the Secretary of State in regulations.
    (5) Regulations under this section may—

    (a) specify one or more specified ages at which age addition shall be payable;

    (b) provide for different rates of age addition to be payable for persons of different specified ages.".'.—[Mr. Webb.]

    Brought up, and read the First time.
    Mr. Webb: I beg to move, That the clause be read a Second time.
    New clause 2 gives the Secretary of State additional powers. After the debate that we have just had, many Labour Members may feel that giving the Secretary of State additional powers is the last thing that they want to do. The new clause allows the Secretary of State to do something that the Minister told us the social security system needs to do—not to leave policies set in stone for decades, but to reflect the changing patterns of a modern society.
    The new clause, which is supported by my right hon. and hon. Friends and, I am pleased to say, the right hon. Member for Birkenhead (Mr. Field), calls on the Government to take an extra power. That power would enable them to pay age additions to the basic state pension not just at the age of 80, which is currently written into primary legislation, but at such ages and at such rates as the Government saw fit. The Secretary of State could decide to pay age additions at 75, 80 and 85. He could decide to pay age additions not at the current, rather insulting, 25p, but at whatever rate he saw fit. The new
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    clause gives the Secretary of State new powers, but takes away none that he currently possesses. For that reason, I am sure the Government will welcome it with open arms.
    New clause 2 is the thinking person's new clause. As evidence, I shall quote from a pamphlet from the Social Market Foundation produced in 1993. It is called, "The Age of Entitlement", and states:
    "There is a tendency for older pensioners to be the poorer ones… older pensioners tend to get left behind as living standards enjoyed by the rest of the population increase. After a decade or more of retirement the gap in incomes can become significant."
    The pamphlet continues:
    "These arguments constitute the case for a higher rate of pension payable to the over-80s. There is indeed a hint of this in our current pension arrangements, with a 25p pension increase payable on reaching the age of 80. This is a laughable attempt at implementing a sensible policy."
    Those are wise words, written—as the Minister suspects—not by me, but by the hon. Member for Havant (Mr. Willetts), the Conservative spokesman on education and employment matters, who is regarded by his friends, I gather, as Two Brains. If it is good enough for him, I hope that his hon. Friends in the Conservative party will see fit to support the new clause.
    The policy is supported not only by the leading thinker in the Conservative party. The right hon. Member for Birkenhead, who repeatedly denies being asked to think the unthinkable, but says that he was called upon to think the doable and the workable, has lent his support to the motion, and was cited recently in the Financial Times publicly giving his backing to the idea of tiering the basic state pension to give additional support to older pensioners.
    I have referred to two distinguished thinkers—one from the Conservative party and one from the Labour party—but what did the Government's independent pensions review group say in response to the pensions Green Paper? It said that the Government could
    "provide a non-trivial step increase in state pension rights at a relatively high age such as 80."
    The leading thinker of the Conservative party, one of the Labour party's leading thinkers and the Government's independent pensions review group all back higher pensions for older pensioners. The Liberal Democrats back higher pensions for older pensioners. We would not normally dream of putting ourselves in such exalted company, but there is a strong case for the measure.
    2.45 am
    When the age addition at 80 was introduced in 1971, the typical male aged 65 had one chance in three of reaching 80. Now, he has one chance in two. Rather than being a minority sport for men, reaching 80 is becoming the majority experience of those who reach pension age, but the state pension system and the basic state pension have not changed.
    A few moments ago, the Minister ended his remarks with a flourish by saying why widows pension arrangements needed to move on. I believe that he used the phrase, "Things do not stand still." However, the 25p age addition to the basic state pension has stood still for 28 years. He implied that the modern social security system should take account of modern trends and modern demographics, but that provision is a relic of an era during which I was six. I should add, hastily, that that was over a quarter of a century ago.

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    The Minister may say, "Why do we need multiple additions to the basic pension? Surely an age addition at 80 is good enough." Why does he not consider income support, which has one rate for those slightly over pension age, a higher rate for those over 75 and another rate for the over-80s? That recognises the diversity within the large pensioner population.
    What about the income tax system? Income tax allowances rise at 65, rise again at 75 and rise again at 80. The tax and social security systems recognise that pensioners are not a large homogenous lump to be treated identically, but have differing needs which can be met in differing ways. The new clause would allow the Secretary of State to take account of that in structuring the basic state pension.
    Will older pensioners always be poorer? Do we want to enshrine in legislation a structure that is not necessary? Will older pensioners catch up? If anything, the evidence is to the contrary. In 1979, which is the earliest year for which the Government produce their pensioner income series, the newly retired single female pensioner had a typical weekly income of £60 a week, in today's money. Her elderly counterpart aged over 80 had a weekly income of £58, which is virtually the same. In the mid-1990s, there was a substantial gap. A newly retired single female pensioner could expect £96 a week; her elderly counterpart could expect £83 a week. If anything, this policy is for today and for tomorrow. That gap is growing, not diminishing, and the provision could be included in legislation now to meet present and future needs.
    At pension conferences, the Minister speaks of the three pillars of the Government's pensions policy: a minimum income guarantee for the poorest pensioners; stakeholder pensions for those who lack private provision; and a state second pension for the low earners. Higher state pensions for older pensioners are not inconsistent with that vision—they would get the Government off the hook. As one of the principal Opposition parties, it is not normally our role to do that, but, because we want good rather than bad policy, and in a spirit of co-operation, we offer them a route off that hook.
    Why would that policy get the Government off the hook? The Minister has said that he wants to do most for those most in need. As he well knows, the neediest pensioners are not those on income support, but those who are entitled to it but fail to claim. The Government's best guess is that there may be 500,000 such people. They have received precious little so far—of the £2.5 billion for the income guarantee, they have not received a penny. The only way to guarantee those people money is through the basic pension, targeted on older pensioners. We know that two thirds of the pensioners who fail to take up the income support to which they are entitled are over the age of 75, so the new clause gets the Government off the hook with today's pensioners. In addition, it deals with the Government's big problem with tomorrow's pensioners.
    The Government have set up an extraordinary pensions proposal, whereby the basic pension will be massively below the poverty line. They propose to fill that gap with a state second pension, which edges people just above the poverty line in the year in which they retire. Within a few years of retirement, however, according to written answers given to me, income from the basic state pension and the state second pension—it is pegged to prices—will
    816
    have fallen back below the poverty line. Ten years after retirement, at the age of 75 or 80, people will be well below the poverty line. If the Government take advantage of new clause 2 and tier the basic pension so that 10 or 15 years after retirement people have a more generous state pension, they will not fall below the poverty line. All their additional savings will be on top of their pension income and there will be no disincentive.
    There are two extreme positions on pensions. The first puts everything into universal provision. The Government's response to that is that it is expensive and poorly targeted. The second relies heavily on means-tested provision. The Government's projections assume that in 2050, 2 million or more pensioners will receive means-tested pensions. That cannot be a sustainable long-term approach. If the Government use tiering and target by age, they will have a well-targeted strategy that does not discourage people from saving.
    When I have put that proposal to the Minister before, his response has been, "You can't spend this money because some of it will not be well targeted." Some of it will go to the woopies—well-off older people. That is fine. If a certain amount goes to the well-off over-80s, good luck to them. However, the Minister will have to explain to the House how he can support a Chancellor who gave £100 in the Budget to every single pensioner household in the land. That is completely untargeted expenditure.
    Mr. Duncan Smith: The new clause does not specify ages or amounts. That is probably a good thing, but I am interested in the hon. Gentleman's view about age breaks. Will he explain it?
    Mr. Webb: I shall complete the point that I was making, and then respond to the hon. Gentleman's question.
    The Minister's key objection seems to be that, although targeting by age is fairly effective, because poverty increases with age, it is not perfectly targeted in the sense that he believes income support to be perfectly targeted on the poor. I hope that he accepts that income support is not perfectly targeted on the poor, because it misses half a million of the poorest in the land who fail to claim. He must also accept that his Government, at precisely the same time, are giving money to pensioners in an untargeted way. He cannot have it both ways. If paying £100 to every pensioner household in the land is a good idea, why is not a targeted increase in the basic state pension, which is more targeted than that, a good idea? He cannot say that it is because it is not targeted.
    The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) asks at what age we would set the age break. We have suggested a first cut-off at the age of 75 and a second at the age of 80. We have used the illustrative figures of £3 at 75 and £5 at 80. Interestingly, that proposal would cost exactly the same as the Chancellor's £100 for every pensioner household in the land, but would do more for the poorest households because they tend to be the oldest ones.
    We would not want to enshrine those age cut-offs in primary legislation because the state pension was initially introduced—by a Liberal Government, as I recall—as an insurance against extreme old age and the risk of living too long. It was to cover the final years of life. Life

    817
    expectancies are increasing all the time, so we would want to look at those age cut-offs and at people's life expectancies, and adjust them accordingly. The new clause would free the Government from the rigidity in the current primary legislation.
    The new clause contains a proposal that the Government must welcome. It gives the Secretary of State a new power, which he may or may not wish to exercise. If he chooses not to exercise it, it is in place for when I, or one of my colleagues, become his successor and can implement it on the first day of a Liberal Democrat Government. Failing that, it would provide a structure that would allow us to target without means testing. Surely that is the right balance to strike. The Government are encouraging people to save, but the savings they make will be taken from them in reduced income support payments.
    The new clause is a way of getting money to today's poorest pensioners, who are most in need, and to tomorrow's poorest pensioners, and it gives them an incentive to save to top that up. It would give the Secretary of State new powers to make sensible reforms to the pension system, and I commend it to the House.
    Mr. Quentin Davies: Conservative Members are not desperately attracted by the prospect of joining the new form of Lib-Lab pact that is being put together by the right hon. Member for Birkenhead (Mr. Field) and the hon. Member for Northavon (Mr. Webb). We would be wise to maintain our freedom to manoeuvre for a little longer. Nevertheless, there are at least two aspects of the hon. Gentleman's proposals, supported as they are by the right hon. Gentleman, that we think are on the right lines.
    The right hon. Member for Birkenhead and the hon. Member for Northavon are certainly on the right lines by trying to do something for the mass of pensioners who do not qualify for income support. Normally speaking, an intention to do something for the mass of pensioners who do not qualify for or claim income support would be platitudinous and scarcely worthy of comment. Such is the state of affairs brought about by two years of this Government, that it is remarkable that someone is thinking of this category of pensioner. What is striking about the Government is that they have done nothing for pensioners who do not qualify for income support. They have come up with some hare-brained schemes for prospective pensioners that will not work. Such people are now providing for their pension or could be induced to provide for their pension if better and more sensibly thought out policies were introduced.
    The Government have come up with the minimum income guarantee for those who qualify, which is merely a repackaging of means-tested income support, which they love so much. They have done nothing for retired people who do not qualify for income support or are too proud to claim it. That is a disgraceful record, and it does not stop there. Not only have they done nothing for this deserving category of citizens, many of whom fought in the second world war and have been through much tougher times in the past 50, 60, 70 or 80 years than many of us could conceive of, but they have attacked them in the most brutal fashion. Pensioners will have to pay tax at 20 per cent. and will not qualify for the 10 per cent. tax rate on their savings income.
    The Government have gone even further than that. Pensioners who are not supposed to be paying tax, because their total incomes are below the threshold fixed
    818
    by Parliament at which income tax becomes payable, will nevertheless be forced to pay tax on their pathetically small savings income. The Government have not merely neglected this particularly deserving group of our fellow citizens, they have brutally and cynically attacked them.
    Mr. Peter L. Pike: I remind the hon. Gentleman that the Government have provided a 100 per cent. winter fuel payment for all pensioners next year. The Conservative Government intended to increase VAT on fuel to 17.5 per cent., whereas this Government have reduced it to 5 per cent.
    Mr. Davies: I am afraid to say that the hon. Gentleman is wrong. Those payments are means tested. [HON. MEMBERS: "No."] That is what I am complaining about.
    Mr. Bayley: It is a universal payment—£100 to every pensioner household in the land.
    3 am
    Mr. Davies: I accept that, but £100 is pretty pathetic compensation for what the Government are doing.
    It at least represents a brave attempt, and a welcome departure, that the right hon. Member for Birkenhead and the hon. Member for Northavon should try to do something for a category of pensioners for which nothing, or virtually nothing, has been done by this Government.
    There is a second aspect to the proposal, which I must say we strongly support. We think that it is on much better lines than those on which the Government have been working. When the economy permits it—when we can afford it nationally—it would be far better to try to do something to reinforce the national insurance system by rewarding contributions made out of people's incomes over many years, to make it clear that there is a reality in the national insurance system: that people who contribute are not just throwing their money away. It is not just a form of tax; it is and genuinely remains a social insurance system, rather than simply reserving any money that is available for an expansion of means-tested benefits.
    The Government have a fatal obsession with means testing. Never but never, Mr. Deputy Speaker, do I believe that anyone in this country would suppose that one of the great negative achievements of this Government—I do not offer any positive achievements—would be, having come to power in 1997, to extend means testing to bring about the biggest expansion of it since the 1930s, and as a result to reverse so much of the good work that has been done by all parties to build up our national insurance system over the generations.
    Given those aspects—the desire to see what can be done for a category of our fellow citizens who have been shamefully neglected, and the intention to do that by strengthening the national insurance system—we think that those who tabled the new clause are on the right lines. In due time, we shall present our own proposals, which—I can tell the House this now—will be a good deal closer to the principles enshrined in the proposal than the policies of the so-called new Labour Government.
    Mr. Garnier: I thank my hon. Friend the Member for Grantham and Stamford (Mr. Davies) for presenting our proposals so clearly. I agreed with much of what he said.

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    I am happy to have understood that, before long, those on the Conservative Front Bench will produce proposals that will come close to the proposals in new clause 2. There is much in new clause 2 that I think Conservatives can recommend, although I disagree profoundly with other parts of it.
    I received quite a lot of criticism in the last Parliament when I suggested to a number of my constituents in the local press that the 25p increase for pensioners over 80 was an insult, and a misuse of public money. I believed that because the 25p accumulated across the cohort of pensioners over 80 could have been better spent on the poorest pensioners over that age. Some pensioners over 80 might not need the extra 25p, and the agglomerated 25ps could be directed better to help others.
    New clause 2 suggests that it is impossible to assess the cost, as no figures are included. That point was anticipated by my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), who asked the hon. Member for Northavon (Mr. Webb) what the age ranges and price ranges—if I may use that expression—were. I was interested to hear the hon. Gentleman's explanation. It appears from what he was saying and from the illustrations that he provided that the proposals would be cheaper and better directed than the Government's present proposals, with their so-called £100 gift.
    That is one of the reasons why I hope that my hon. Friend the Member for Grantham and Stamford will persuade hon. Members to be encouraged by the new clause. We want better-targeted spending and the best use of public money in the funding of provision for our elderly citizens. I am greatly encouraged by his remarks. I am particularly encouraged that at least someone is doing some thinking about what to do with the pension arrangements.
    Where I part company with those who support new clause 2 is in relation to its creation of unspecified new powers for the Minister, or Secretary of State. Subsection (2) refers to someone being above a specified age. I ask myself what the specified age is, and I am told by subsection (3) that it is
    "an age specified by the Secretary of State in regulations."
    I am not sure that I would trust such a Government with any further powers. I am inimical to any proposals that create unspecified secondary powers through primary legislation. As I have said, I do not necessarily disagree with the thrust of the new clause, but I do not like the way in which the proposal is delivered into legislation.
    It is a pity that, increasingly, primary legislation is no more than a Christmas tree, or a collection of coat hangers—I think that the hon. Member for Torridge and West Devon (Mr. Burnett) will remember the phrase from the Committee stage of the Access to Justice Bill, which was recently completed—by which the Government give themselves the ability to create secondary legislation by handing powers to members of the Executive. Here we have another example. I hope that the Liberal Democrats will not allow themselves to be persuaded by the present Government that that is a good way in which to make legislation.
    The first concern arises when we deal with specified age. The second is to be found in subsection (2)(b), which says that someone above the specified age has to fulfil
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    "such other conditions as may be prescribed".
    There is a double vagueness. The conditions are not specified, and there may be some prescription, about which we know nothing. I do not believe that we have heard anything about that from the hon. Member for Northavon.
    It may be that the hon. Member for Northavon has, in the back of his head, a fully worked out scheme and that it is only because of lack of time, or shortage of paper that he has been unable to inform the House, either on paper or orally, what the other conditions might be and how they may be prescribed.
    Mr. Webb: May I briefly explain? The new clause mirrors the existing measure; the figure "80" is written into primary legislation. The first part of the new clause refers to the state retirement pension. The second vaguer bit relates to any other benefit where an age addition might be added. All that is beneficial to the claimant because he or she does not receive that addition at present.
    The power that the hon. and learned Gentleman is worried about the Secretary of State exercising would be to introduce additions that do not currently exist: more age additions and other benefits. That is why it is vaguely drafted. The Secretary of State could not exercise those additional powers malignly, save possibly by abolishing the 25p age addition; that is the worst that he could do under the new clause. Otherwise, it would be entirely beneficial.
    Mr. Garnier: I fully accept the sincerity and motives behind new clause 2. However, that does not stop me making the point that drafting legislation in such a manner is to be deprecated. I have a constitutional abhorrence of such legislation—which was passed increasingly by the previous Government, and is being passed increasingly by the current one. We should be aware of, and check, the practice.
    I hope, however, that my criticisms of the way in which the new clause is drafted will not prevent my hon. Friend the Member for Chingford and Woodford Green, and others who take an interest in the matter, from making proposals that are worthy of consideration.
    Subsection 4 of the new clause states:
    "Age additions shall be payable for the life of the person entitled, at weekly rates to be determined by the Secretary of State in regulations."
    Although I do not have to repeat the points that I am making, that is another example of vagueness. It is not sensible to deal with such a matter in that particular way.
    I fully accept that the Bill would be very fat—fatter than it is already—if all its rules and regulations were included in primary legislation. However, it would be of assistance to the House—as it would have been to the Standing Committee when it considered similar matters—if draft rules had been available for consideration alongside the new clause.
    In response to the intervention of my hon. Friend the Member for Chingford and Woodford Green, the hon. Member for Northavon was able to produce some additional information that, on another day, might have been available in written form. Sometimes, the Government produce explanatory notes, giving the public some idea of their intentions. In the case of this new

    821
    clause, however, we have been left with nothing but what is stated on the amendment paper. I do not expect the hon. Member for Northavon to bob up every time that I make a criticism, but am simply stating, for the benefit of the House, my concerns about the way in which the legislation is being made. I urge the House to consider very carefully any other new clauses, or any Government proposals, that are so drafted.lb/>
    Subsection (5) of the new clause states:
    "Regulations under this section may—
    (a) specify one or more specified ages at which age addition shall be payable".
    The hon. Member for Northavon has very helpfully provided us with some idea of what he had in mind there.
    Subsection (5)(b) goes on to say that the regulations may
    "provide for different rates of age addition to be payable for persons of different specified ages."
    I again applaud the hon. Member for Northavon for responding with some detail—in anticipation of my point—to the intervention of my hon. Friend the Member for Chingford and Woodford Green on that provision.
    A matter of growing concern for me, and I believe also for other hon. Members, is that we should check the increasing practice of creating legislation in which Secretaries of State are given additional, but unspecified powers to make rules and regulations. Nevertheless, despite my criticisms, I am grateful to my hon. Friend the Member for Chingford and Woodford Green for stating that at least Conservative Members will sympathetically consider proposals of this nature, subject to the strength of the economy and to economic good sense.
    Sir Richard Body: I agree wholeheartedly with my hon. and learned Friend the Member for Harborough (Mr. Garnier) in questioning whether such far-reaching power should be handed over to any Minister. However, I suspect that the intention of the hon. Member for Northavon (Mr. Webb) in moving new clause 2 was, once again, to raise a long-term issue from which so many of us run away. We all know that the ratio between those who are working and those who will be retired in 15 years' time will deteriorate quite dramatically, and that, by the time that we reach a certain year, we shall have to introduce some form of differential pensions.
    In the past, we should have shuddered at such a thought and considered it quite unfair, but, today, I do not think that that is the case. Today's 60 or 65-year-olds are much fitter and healthier than those from earlier generations.
    3.15 am
    There are five travel agents in Boston. I believe that their main clients are pensioners, who hop into aircraft and fly to exotic places. Earlier generations would have been happy with a holiday down the road in Skegness. Things have changed tremendously. I can vouch for the fact that Skegness is a good place for a holiday. The air is very bracing.
    It is still 17 May as far as the House is concerned, but in the real world outside it is 18 May. In an hour or two, I shall have been entitled to a retirement pension for seven years. I sometimes feel rather ashamed about receiving
    822
    that money. I like to think that there are still a few people in Boston who think that I am fit to carry on working and not retire yet. These days, people are far more capable than in times past of working a few more years. The days when 65-year-olds were to be seen slopping around in their houses in slippered feet have long since gone. It is quite common to see people in old people's homes in their 90s, whereas anyone reaching 80 used to be a cause for major celebration in such homes.
    We have to recognise that, as the standard of living of those in their 60s increases, we would be justified in introducing differential pensions so that, in the future, when funds are limited, the Minister will be justified in freezing the payments to those who are still in their 60s and giving an enhanced pension to those who are over 80. I see nothing unjust in that. It must happen. The new clause could be the mechanism to make it possible, but it is such a far-reaching proposal that it is not appropriate for secondary legislation. If we are to make such a drastic change in the system of pensions, it must be a matter for primary legislation, which should be debated fully on the Floor of the House before it is approved. Although I sympathise wholeheartedly with the aims behind the new clause, I shall not vote for it.
    Mr. Rendel: 1 should like to speak briefly on the new clause. There are three main areas in which the Government are proud of their policies for pensioners to date. One is the minimum income guarantee, which, as we have already heard, does not apply to the poorest pensioners—those who, for one reason or another, do not get income support but live below income support levels. The other two are the reduction in VAT on fuel and the winter fuel payment, both of which apply equally to all pensioners—those who are comparatively well off and those who are comparatively poor. The Government are clearly not aiming their main policies for pensioners at the poorest. In contrast, the new clause is clearly aimed at the poorest pensioners, because the more elderly pensioners tend to be the poorest.
    One might expect our policy to meet with some dismay from the younger pensioners, many of whom are also in some poverty. I did not have local elections in my area recently, but, during the campaign, I visited several other areas to promote our policies. I am happy to report that younger pensioners accept almost unanimously that the older pensioners need a bit more. They find that it is a fair policy that should be implemented, and that where there is extra money, it should be given to the older pensioners.
    Therefore, this is not only the right policy in moral terms—it targets those who are the poorest—but it will prove to be popular if the Government take it on. I urge them to do so.
    Mr. Timms: The hon. Member for Northavon (Mr. Webb) made a characteristically interesting and thoughtful speech, which the House will have enjoyed. The House will have enjoyed also the reminder provided by the hon. Member for Boston and Skegness (Sir R. Body) of the bracing character of his constituency.

    823
    The context of the amendment is the proposal from the Liberal Democrats to extend the age addition so that it is payable from the age of 75 at an increased rate of £3 per week, which would be further increased to £5 per week from the age of 80. The problem is not just that that is not a well-targeted proposal, as the hon. Member for Northavon accepted.
    Mr. Webb: I did not.
    Mr. Timms: The hon. Gentleman made the point that I would say that it was not well targeted, which I am doing. The problem is that, for most on income support, it would provide no help at all.
    By contrast, the minimum income guarantee—which we introduced last month—which increases income support for pensioners by three times the rate of inflation, is making a substantial difference. We have already announced that, next April, the increase in rates will be based on earnings. Next year, an older pensioner couple—where one member is over 80—on income support will be more than £400 a year better off in real terms over two years.
    By contrast, the proposal from the Liberal Democrats would provide over 80s with £260 a year and would provide nothing at all to most of those who receive income support. Our long-term aim, as resources permit, is for the minimum income guarantee to be increased in line with earnings, thus further enhancing the amount of the premium that older pensioners receive.
    The hon. Member for Northavon has been clear-he supports the minimum income guarantee for pensioners. The hon. Member for Newbury (Mr. Rendel) has been rather more equivocal. However, there is no doubt in my mind that what we are doing is the most effective way of helping those who need help most. We are addressing also the problem of those who do not claim but should, and our mechanism enables us to make a real difference in providing help to the least-well-off pensioners as quickly as possible.
    In the long term, our proposals for pension reform outlined in the Green Paper—in particular the introduction of stakeholder pension schemes and the new state second pension —will ensure that everyone with a lifetime of work behind them will build up rights to a pension that will take them above the minimum income guarantee on retirement.
    Hon. Members should consider that extending the payment of the age addition in the way that has been proposed would cost around £910 million gross, or £600 million net. That extra money would go to all pensioners, but it would be poorly targeted. The poorest pensioners—those who receive income support—would get no increase at all.
    The £100 winter fuel payment is going to every pensioner, but that provides a benefit, worth £100, to every single pensioner—whereas increasing the state pension does not, because the level of income of those on income support does not increase. The £100 payment provides the full benefit of that payment to everybody who receives it.
    Mr. Webb: Would the Minister describe paying £100 to every pensioner household in the land as targeted?
    Mr. Timms: It has certainly been extremely well received by my constituents and those of my hon. Friends. That is something to be said for it.
    Although we appreciate hon. Members' concerns, we have already done a good deal in terms of increasing the incomes of older pensioners, reducing taxes through increased tax allowances and providing help in other ways to older pensioners. The new clause is not the most effective way forward. We do not plan to use such powers, although my right hon. Friend may be grateful for the suggestion that he should have them. I urge hon. Members to reject the new clause.
    Mr. Webb: That is the reply that we expected. I sought to anticipate all those remarks, but we got them none the less. The Minister is not comparing like with like. The Government are putting £2.5 billion into the minimum income guarantee over three years, which is £800 million a year, and £600 million a year into the winter fuel payments. The question is how the money is best spent. The Government seem to think that it is right to spread half of it thinly and evenly, yet the Minister's objection to our relatively targeted strategy is that it is not targeted enough. There is obviously a complete inconsistency at the heart of that response.
    I tabled a parliamentary question asking what the 25p figure would be if the £2.5 billion over three years had been spent instead on the over-80s age addition. The answer was £11. That is the equivalent of the money that the Government are putting into the minimum income guarantee. It would provide substantially more for the over-80s, and we could probably do more for the over-75s as well.
    Mr. Duncan Smith: Does the hon. Gentleman agree that the Government may have decided to spend money in that way because two, three or four years down the road, they will have the option of not increasing the amount or even of reducing it, which would not have been the case if it had gone on to the state pension?
    Mr. Webb: The hon. Gentleman is right to point out that the £100 has no statutory indexation arrangements attached to it, so it may be a good gimmick in the run-up to the next general election, but we do not know what will happen thereafter.
    The new clause would enable the Government to create a more rational structure for the basic state pension without denying them the opportunity to carry on exactly as they are. Should they decide, in response to developments in pensioner incomes and living standards, that the proposal offers a more sensible structure, the power would be there, ready for them to use.
    We are disappointed that the Government have chosen not to take advantage of our kind invitation, so we want to see whether the House shares that disappointment, by pressing the motion to a vote.
    Question put, That the clause be read a Second time:—
    The House divided: Ayes 41, Noes 361.

    Division No.182]

    [3.41 amm

    AYES

    Allan, Richard

    Jones, Nigel (Cheltenham)

    Ballard, Jackie

    Kirkwood, Archy

    Beggs, Roy

    Livsey, Richard

    Beith, Rt Hon A J

    Llwyd, Elfyn

    Brake, Tom

    Michie, Mrs Ray (Argyll & Bute)

    Breed, Colin

    Moore, Michael

    Bruce, Malcolm (Gordon)

    Oaten, Mark

    Burnett, John

    Öpik, Lembit

    Burstow, Paul

    Rendel, David

    Cable, Dr Vincent

    Russell, Bob (Colchester)

    Campbell, Rt Hon Menzies

    Sanders, Adrian

    (NE Fife)

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

    Chidgey, David

    Smyth, Rev Martin (Belfast S)

    Cotter, Brian

    Swinney, John

    Davey, Edward (Kingston)

    Thompson, William

    Donaldson, Jeffrey

    Tonge, Dr Jenny

    Ewing, Mrs Margaret

    Tyler,Paul

    Forsythe, Clifford

    Webb, Steve

    Foster, Don (Bath)

    Willis, Phil

    George, Andrew (St Ives)

    Gorrie, Donald

    Tellers for the Ayes:

    Harvey, Nick

    Mr. Andrew Stunell and

    Hughes, Simon (Southwark N)

    Mr. David Heath.

    NOES

    Adams, Mrs Irene (Paisley N)

    Brinton, Mrs Helen

    Ainger, Nick

    Brown, Rt Hon Nick (Newcastle E)

    Ainsworth, Robert (Cov'try NE)

    Brown, Russell (Dumfries)

    Alexander, Douglas

    Browne, Desmond

    Anderson, Donald (Swansea E)

    Buck, Ms Karen

    Anderson, Janet (Rossendale)

    Burden, Richard

    Armstrong, Rt Hon Ms Hilary

    Burgon, Colin

    Ashton, Joe

    Butler, Mrs Christine

    Atherton, Ms Candy

    Byers, Rt Hon Stephen

    Atkins, Charlotte

    Campbell, Alan (Tynemouth)

    Austin, John

    campbell, Mra Anne (C'bridge)

    Banks, Tony

    campbell, Ronnie (Blyth V)

    Barnes, Harry

    Campbell— Savours, Dale

    Barron, Kevin

    Canavan, Dennis

    Battle, John

    Cann, Jamie

    Bayley, Hugh

    Caplin, Ivor

    Beard, Nigel

    casale, Roger

    Beckett, Rt Hon Mrs Margaret

    Caton, Martin

    Begg, Miss Anne

    Cawsey, lan

    Bell, Stuart (Middlesbrough)

    Chapman, Ben (Wirral S)

    Benn, Rt Hon Tony

    Chaytor, David

    Bennett, Andrew F

    clapham, Michael

    Benton, Joe

    Clark, Rt Hon David (S Shields)

    Bemiingham, Gerald

    clark, Dr Lynda (Edinburgh Pentlands)

    Berry, Roger

    Clark, Pale (Gillingham)

    Best, Harold

    Clarke, Charles (Norwich S)

    Betts, Clive

    Clarke, Rt Hon Tom (Coatbridge)

    Blears, Ms Hazel

    clarke, Tony (Northampton S)

    Blizzard, Bob

    Coffey, Ms Ann

    Blunkett, Rt Hon David

    Coaker, Vernon

    Boateng, Paul

    Cohen, Harry

    Borrow, David

    Coleman, lain

    Bradley, Keith (Withington)

    colman, Tony

    Bradley, Peter (The Wrekin)

    Connarty, Michael

    Bradshaw, Ben

    Corbet, Robin

    829

    Corbyn, Jeremy

    Heppell, John

    Corston, Ms Jean

    Hesford, Stephen

    Cousins, Jim

    Hewitt, Ms Patricia

    Cox, Tom

    Hill, Keith

    Cranston, Ross

    Hinchliffe, David

    Crausby, David

    Hodge, Ms Margaret

    Cryer, John (Hornchurch)

    Hoey, Kate

    Cummings, John

    Home Robertson, John

    Cunningham, Rt Hon Dr Jack

    Hood, Jimmy

    (Copeland)

    Hoon, Geoffrey

    Cunningham, Jim (Cov'try S)

    Hope, Phil

    Curtis—Thomas, Mrs Claire

    Hopkins, Kelvin

    Dayell, Tam

    Howarth, Alan (Newport E)

    Darling, Rt Hon Alistair

    Howarth, George (Knowsley N)

    Darvill, Keith

    Howells, Dr Kim

    Davey, Valerie (Bristol W)

    Hoyle, Lindsay

    Davidson, Ian

    Hughes, Ms Beverley (Stretford)

    Davies, Rt Hon Denzil (Llanelli)

    Hughes, Kevin (Doncaster N)

    Davies, Geraint (Croydon C)

    Humble, Mrs Joan

    Dawson, Hilton

    Hurst, Alan

    Dean, Mrs Janet

    Hutton, John

    Denham, John

    Iddon, Dr Brian

    Dismore, Andrew

    Illsley, Eric

    Dobbin, Jim

    Ingram, Rt Hon Adam

    Donohoe, Brian H

    Jackson, Ms Glenda (Hampstead)

    Doran, Frank

    Jackson, Helen (Hillsborough)

    Dowd, Jim

    Jamieson, David

    Drew, David

    Jenkins, Brian

    Drown, Ms Julia

    Johnson, Alan (Hull W & Hessle)

    Dunwoody, Mrs Gwyneth

    Johnson, Miss Melanie

    Eagle, Angela (Wallasey)

    (Welwyn Hatfield)

    Eagle, Maria (L'pool Garston)

    Jones, Barry (Alyn & Deeside)

    Edwards, Huw

    Jones, Mrs Fiona (Newark)

    Efford, Clive

    Jones, Helen (Warrington N)

    Ellman, Mrs Louise

    Jones, Ms Jenny

    Ennis, Jeff

    (Wolverhton SW)

    Field, Rt Hon Frank

    Jones, Jon Owen (Cardiff C)

    Fisher, Mark

    Jones, Martyn (Clwyd S)

    Fitzpatrick, Jim

    Kaufman, Rt Hon Gerald

    Fitzsimons, Lorna

    Keeble, Ms Sally

    Flynn, Paul

    Keen, Alan (Feltham & Heston)

    Follett, Barbara

    Keen, Ann (Brentford & Isleworth)

    Foster, Michael Jabez (Hastings)

    Kelly, Ms Ruth

    Foster, Michael J Worcester)

    Kemp, Fraser

    Foulkes, George

    Kennedy, Jane (Wavertree)

    Fyfe, Maria

    Khabra, Piara S

    Gapes, Mike

    Kidney, David

    Gardiner, Barry

    Kilfoyle, Peter

    George, Bruce (Walsall S)

    King, Andy (Rugby & Kenilworth)

    Gerrard, Neil

    King, Ms Oona (Bethnal Green)

    Gibson, Dr Ian

    Kingham, Ms Tess

    Gilroy, Mrs Linda

    Kumer, Dr Ashok

    Godman, Dr Norman A

    Ladyman, Dr Stephen

    Godsiff, Roger

    Lawrence, Ms Jackie

    Goggins, Paul

    Laxton, Bob

    Gordon, Mrs Eileen

    Lepper, David

    Griffiths, Jane (Reading E)

    Leslie, Christopher

    Griffiths, Nigel (Edinburgh S)

    Levitt, Tom

    Griffiths, Win (Bridgend)

    Lewis, Ivan (Bury S)

    Grocott, Bruce

    Lewis, Terry (Worsley)

    Grogan, John

    Liddell, Rt Hon Mrs Helen

    Hain, Peter

    Linton, Martin

    Hall, Mike (Weaver Vale)

    Lloyd, Tony (Manchester C)

    Hall, Patrick (Bedford)

    Lock, David

    Hamilton, Fabian (Leeds NE)

    Love, Andrew

    Hanson, David

    McAllion, John

    Harman, Rt Hon Ms Harriet

    McAvoy, Thomas

    Heal, Mrs Sylvia

    McCabe, Steve

    Healey, John

    McCafferty, Ms Chris

    Henderson, Doug (Newcastle N)

    McDonagh, Siobhain

    Henderson, Ivan (Harwich)

    Macdonald, Calum

    Hepburn, Stephen

    830

    McDonnell, John

    Ruane, Chris

    McFall, John

    Ruddock, Joan

    McIsaac, Shona

    Russell, Ms Christine (Chester)

    McKenna, Mrs Rosemary

    Ryan, Ms Joan

    Mackinlay, Andrew

    Salter, Martin

    McLeish, Henry

    Sarwar, Mohammad

    McNamara, Kevin

    Savidge, Malcolm

    McNulty, Tony

    Sawford, Phil

    MacShane, Denis

    Sedgemore, Brian

    Mactaggart, Fiona

    Shaw, Jonathan

    McWalter, Tony

    Short, Rt Hon Clare

    Mahon, Mrs Alice

    Simpson, Alan (Nottingham S)

    Mallaber, Judy

    Singh, Marsha

    Mandelson, Rt Hon Peter

    Skinner, Dennis

    Marsden, Gordon (Blackpool S)

    Smith, Rt Hon Andrew (Oxford E)

    Marsden, Paul (Shrewsbury)

    Smith, Angela (Basildon)

    Marshall, David (Shettleston)

    Smith, Rt Hon Chris (Islington S)

    Marshall—Andrews, Robert

    Smith, Miss Geraldine

    Martlew, Eric

    (Morecambe & Lunesdale)

    Maxton, John

    Smith, Jacqui (Redditch)

    Meacher, Rt Hon Michael

    Smith, John (Glamorgan)

    Meale, Alan

    Smith, Llew (Blaenau Gwent)

    Merron, Gillian

    Snape, Peter

    Michie, Bill (Shefld Heeley)

    Soley, Clive

    Milbum, Rt Hon Alan

    Southworth, Ms Helen

    Mitchell, Austin

    Spellar, John

    Miller, Andrew

    Squire, Ms Rachel

    Moffatt, Laura

    Starkey, Dr Phyllis

    Moonie, Dr Lewis

    Steinberg, Gerry

    Moran, Ms Margaret

    Stevenson, George

    Morgan, Ms Julie (Cardiff N)

    Stinchcombe, paul

    Morley, Elliot

    Stoate, Dr Howard

    Mountford, Kali

    Strang, Rt Hon Dr Gavin

    Mudie, George

    Stringer, Graham

    Mullin, Chris

    Stuart, Ms Gisela

    Murphy, Denis (Wansbeck)

    Sutcliffe, Gerry

    Murphy, Jim (Eastwood)

    Taylor, Rt Hon Mrs Ann

    Naysmith, Dr Doug

    (Dewsbury)

    Norris, Dan

    Taylor, Ms Dart (Stockton S)

    O'Brien, Bill (Nomranton)

    Temple—Morris, Peter

    O'Brien, Mike (N Warks)

    Thomas, Gareth (Clwyd W)

    O'Hara, Eddie

    Thomas, Gareth R (Harrow W)

    Olner, Bill

    Timms, Stephen

    O'Neill, Martin

    Tipping, Paddy

    Organ, Mrs Diana

    Todd, Mark

    Osborne, Ms Sandra

    Touhig, Don

    Pearson, Ian

    Trickett, Jon

    Pendry, Tom

    Truswell, Paul

    Perham, Ms Linda

    Turner, Dennis (WolverhIon SE)

    Pickthall, Colin

    Turner, Dr Desmond (Kemptown)

    Pike, Peter L

    Turner, Dr George (NW Norfolk)

    Plaskitt, James

    Twigg, Derek (Halton)

    Pollard, Kerry

    Twigg, Stephen (Enfield)

    Pope, Greg

    Vaz, Keith

    Pound, Stephen

    Vis, Dr Rudi

    Powell, Sir Raymond

    Walley, Ms Joan

    Prentice, Ms Bridget (Lewisham E)

    Ward, Ms Claire

    Prentice, Gordon (Pendle)

    Wareing, Robert N

    Primarolo, Dawn

    Watts, David

    Prosser, Gwyn

    White, Brian

    Purchase, Ken

    Whitehead, Dr Alan

    Quinn, Lawrie

    Wicks, Malcolm

    Radice, Giles

    Williams, Rt Hon Alan

    Rammell, Bill

    (Swansea)

    Raynsford, Nick

    Williams, Alan W (E Carmarthen)

    Reid, Rt Hon Dr John (Hamilton N)

    William, Mrs Betty (Conwy)

    Robertson, Rt Hon George

    Wilson, Brian

    (Hamilton S)

    Winnick, David

    Roche, Mrs Barbara

    Winterton, Ms Rosie (Doncaster C)

    Rooker, Jeff

    Wood, Mike

    Rooney, Terry

    Ross, Ernie (Dundee VV)

    Rowlands, Ted

    Roy, Frank

    831

    Woolas, Phil

    Wyatt, Derek

    Worthington, Tony

    Tellers for the Noes:

    Wright, Anthony D (Gt Yarmouth)

    Mr. Graham Allen and

    Wright, Dr Tony (Cannock)

    Mrs. Anne McGuire.

    Question accordingly negatived.

  New Clause 4

    INCOME SUPPORT PREMIUMS PAYABLE UPON TERMINATION OF BEREAVEMENT ALLOWANCE
    `After section 39 of the Contributions and Benefits Act there shall be inserted—
    "39D.—Where the surviving spouse after 26 weeks is eligible for Income Support and below pension age, she or he will be entitled to a premium to be paid with Income Support at a level which
    828
    Will maintain the income received from the Bereavement Allowance while she or he remains eligible for Income Support or until that surviving spouse reaches pension age"'… [Mr. Rendel.]
    Brought up, and read the first time.
    Motion made, and Question put, That the clause be read a Second time:—
    The House divided: Ayes 41, Nose 360.
    Question accordingly negatived.
    Motion made, and Question proposed, That further consideration be now adjourned.—[Mr. Bradley.]
    Mr. Quentin Davies: This is a debatable motion and we do not intend to let the Government get away with this without giving a thorough explanation to the House. The Government are evidently on the run. They have lost the support of their Members. We were debating the bereavement proposals a moment ago and it is obvious that they do not want to face the House with the even more unacceptable proposals for means-testing incapacity benefit.
    The Government came forward arrogantly with a set of proposals, mostly badly thought through and some pernicious, particularly those intended to wind down the national insurance system. They ran into much more resistance than they expected. They have been exposed already in several fields for not having done their homework properly. They were about to be exposed again. The next group of amendments related to re-rating the state retirement pension for pensioners who earned their entitlement by paying national insurance contributions, often through a lifetime, only to face a lottery if they live abroad. Depending on where they live, they may be entitled to continue to have their pensions uprated. If they live in the Philippines they will get full uprating, but in Canada they will not. The Government did not want to go into that and saw a possible trap or source of embarrassment. Defending that set of anomalies would not have been easy. The Government are already feeling pretty bruised—especially the hon. Members for East Ham (Mr. Timms) and for York (Mr. Bayley).
    What was coming up after that? We all know that it was to be stakeholder pensions, which represent a colossal Government shambles. It is an issue on which the Government are in full retreat. They got a bloody nose last week when we had the pensions debate, and they do not want another one. They are running away from that. As they have the effrontery to suggest that we should interrupt our proceedings just as we are about to embark on the important matter of stakeholder pensions, I shall remind them of some of the issues that were exposed during the Opposition day debate on pensions.
    The Labour party put an interesting sounding promise in its election manifesto to have a stakeholder pension. It all sounded splendid and Labour candidates appeared to be goodies before the electorate. The usual public relations merchants were roped in to package the scheme to give the impression that it was something for nothing and that everything would be very good if people voted for a Labour Government. However, Labour did not have the faintest idea what to do with the scheme when it was elected. We then had 18 months during which the Government were asked regularly what they were doing about the stakeholder proposals that they had promised to introduce, and answer came there none.
    The Government became more and more embarrassed. A Secretary of State and a Minister of State—the right hon. Member for Birkenhead (Mr. Field), who has been
    832
    playing a distinguished part in our proceedings—had to be got rid of. Another Secretary of State and another pensions Minister were brought in. After a few months that Minister had to be got rid of as well because nothing was happening. The Secretary of State—no doubt so as not to lose face entirely, and shivering in his shoes because he was in line to get the sack as well unless he did something—thought that he should do something extremely quickly.
    The Green Paper on stakeholder pensions was originally promised for last summer. It was then formally promised for the autumn. In December, the Government were under great pressure. So they lifted the Australian superannuation system, which was based on compulsion. It was a funded scheme administered by trustees. Everything is set out in the Green Paper, with which we have become extremely familiar. However, at the last minute the Prime Minister vetoed the compulsion element, knowing perfectly well, and correctly, that we would say that the scheme amounted to an unjustified additional new Labour tax. It would have been exactly that, and extremely damaging, particularly for the self-employed who found that cash flow was being sucked out of their businesses. They would have ended up a great deal less well off in their retirement. Many more businesses would have gone to the wall, with corresponding damage to the economy. The Government were right to veto the element of compulsion.
    The trouble was that the Government in their great hurry did not think things through. They did not realise that the rest of the structure, as invented by the Australians—the Government are rarely original in their thinking—was premised on the assumption of compulsion. When compulsion was removed, the rest of the edifice fell down. It was the equivalent of launching a new model of motor car and taking the wheels off at the moment of the launch.
    The result was a spectacular collapse. Very amusing it was for Opposition Members but it was a bad day's work for pension saving, and we much regret it on that basis.
    Mr. Burns: Does my hon. Friend agree that the Government, by trying to pull up the stumps now, are revealing yet another stage in the catalogue of confusion and disaster attendant on drawing up the Bill?
    Mr. Davies: My hon. Friend is absolutely right. It has been a discreditable story. Incompetence has been the hallmark of the Government's handling of the pensions issue, including the stakeholder scheme. However, on top of incompetence there is something far worse.
    Miss McIntosh: I am grateful to my hon. Friend for giving way. Either the Government are continuing their policy of holding the House in contempt, as we have seen on a number of occasions, or the point that I made to the Minister earlier is worrying the Government so much that they want to adjourn. They are seeking to dismantle the Beveridge system of welfare as we have known it. The Minister quoted Beveridge out of context. Which is it, in my hon. Friend's view—are the Government holding the House in contempt, or are they on the run because they are dismantling the Beveridge system?
    4 am
    Mr. Davies: It is a three-part story, which begins with incompetence. I shall return to that shortly in connection with the stakeholder pension and the other pension proposals.
    In addition to their incompetence, the Government have made a cowardly attack on the most vulnerable people in our society, with a view to clawing back from them a large sum of money, and claiming that that was a great success because the money could be used for some more electorally alluring purpose. That is a thoroughly discreditable course to adopt.
    It is no accident that the Government are trying to interrupt proceedings just a few hours before we would have got on to the vital matter of incapacity benefit. When their proposals come into effect, they intend to claw back more than £700 million in a full year, plus another £100 million from the abolition of severe disablement allowance. That is a total of £800 million in round terms, which the Government propose to get from the most vulnerable—the disabled. They would have to cough up. The Government thought that the disabled were limited in number and would be a soft target—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman cannot legitimately discuss on the motion everything that has yet to be discussed in the Bill. Presumably there will be opportunity for that. It is not in order to go through a catalogue of those matters on the present motion.
    Mr. Davies: I accept that, Mr. Deputy Speaker, but I hope you agree that it is in order for me to draw out the Government's motives, so that we can see them exposed in Parliament, and so that the public should be under no illusion about what is happening. It is an extraordinary state of affairs when the Government decide to interrupt proceedings on a range of their own legislative proposals, in the middle of our debate.
    Mr. Garnier rose—
    Mr. Davies: I hope that my hon. and learned Friend will bear with me. I must first deal with the intervention of my hon. Friend the Member for Vale of York (Miss McIntosh).
    The third aspect of what has happened is the most discreditable of all—the arrogance with which the Government have responded to the representations from the disabled, from my right hon. and hon. Friends, and from sensitive people on the Labour Benches who are concerned about the disabled and about safeguarding the traditions of the Labour party, and the traditional adherence of the Labour party to the principle of national insurance.
    The Government responded incredibly arrogantly to that. As we all know, the Secretary of State has been going round the Lobby saying, "I will get tough with them. I will see them off. We are going to defeat them—don't you worry about it." That is the principle that he has adopted in the past couple of days. We saw that this evening with the Minister's deputy, who is not an arrogant person by inclination, but who has been dealing in an extraordinary manner with interventions from senior Back Benchers on his own side. I have seen nothing like it in my time in the House.
    834
    It is regrettable that this mood should have come over the Government. They have an enormous majority, and we realise that that holds great temptations for them, but they have fallen for those temptations and are not listening to anybody at all. We are witnessing arrogance followed by nemesis, because the arrogance has not worked. The Government's bullying tactics and the dismissal of honest representations from Members in all parts of the House, including their own supporters, have not worked. Precisely because the Government cannot face up to the consequence of their arrogance, or to the revolt that is brewing on their own side, they are attempting to interrupt our proceedings.
    Mr. Jeremy Corbyn rose—
    Mr. Davies: I will come back to the hon. Gentleman in a moment. I give way first to my hon. and learned Friend the Member for Harborough (Mr. Garnier), who caught my eye first.
    Mr. Garnier: Is not the Government's decision to cease debate made all the worse by their introduction on Report of a raft of new clauses which fundamentally and dramatically enlarge the Bill? There has been no chance to discuss those measures—that was drawn to the attention of the House by my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) when we began our debates this afternoon—and no chance for these matters to receive the proper scrutiny which they would normally have received in Committee. Those measures have been foisted on the House at this late stage, and now this arrogant Government have simply decided to rip away the opportunity for debate so that they can all go off to bed and read their nursery books.
    Mr. Davies: I quite agree with my hon. and learned Friend. I had occasion to refer to exactly that point in our debate on insolvency. The Government tabled a new clause that completely contradicted the Bill that they had introduced on Second Reading and debated in Committee. The Minister of State did not want to confess that he had done a somersault or a U-turn, but he self-evidently had. Once again, the Government have been trying to run away from the consequences of their own actions.
    Mr. Corbyn: Will the hon. Gentleman give way?
    Mr. Davies: I will come back to the hon. Gentleman in a moment. I give way next to my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning).
    Mrs. Browning: The Government tabled new clauses as late as Friday past. We have been debating the Bill since 3.30 yesterday afternoon, and most of our time has been spent on Government new clauses. The Government have dispatched their own business on Report, but, arrogantly, they will not give Members who have tabled amendments reasonable time for them to be discussed and dispatched. We have been courteous enough to discuss and debate the Government's new clauses.
    Mr. Deputy Speaker: Order. I think there has been sufficient implied criticism of Madam Speaker's selection and we should move off from that.
    Mr. Davies: I did not hear any criticism of Madam Speaker's selection at all. I heard—[HON. MEMBERS: "Oh! I No, I did not; I heard criticism of the way that the Government have behaved.
    Mr. Corbyn: Will the hon. Gentleman give way?
    Mr. Davies: I will come back to the hon. Gentleman in a moment. He need have no fear because, unlike his Front Benchers, I have no desire to stop him speaking in the House. However, I must deal with the point that has been made, because it is serious.

    At stake is how the Government decide to treat not merely Parliament, but the general public. Stakeholder pensions are one of the major issues for us to debate, but the most extraordinary thing has happened. The Government rapidly produced an ill thought through Green Paper and attached to it was a consultation that would last until 31 March. The public, the experts, the industry, the academic world and so forth were all cordially invited to make their representations by that date.
    The Government must have realised that their proposals were so hare-brained that the results of the consultation would profoundly embarrass them. What did they do? They cut off the consultation procedure midstream—in fact, almost before it started—and published a Bill at the beginning of February. They got the Bill through Second Reading and Committee using their majority, and then brought the Bill out of Committee because we had finished discussing the stakeholder pension provisions several weeks before the end of the consultation.
    As if that were not enough, the Government then came here yesterday afternoon with proposals that contradict those that we debated in Committee on, for example, insolvency. They have thus treated the Committee with contempt.
    There are only two possible explanations for the Government's behaviour. Either they were not taking seriously clauses 11 and 12 of their own Bill, and knew that they had in their back pocket their real intentions, which they would try to smuggle into the legislative process later—
    Mr. Deputy Speaker: Order. I must remind the hon. Gentleman that we have dealt with those matters. The question is whether it is right that consideration of the Bill be adjourned at this point.
    Mr. Davies: Given the Government's approach to parliamentary scrutiny of their legislative proposals, which is graphically demonstrated by their behaviour in this context—as it is by many of the other examples that I have cited and will cite in the course of my remarks—we should deny the Government the right to adjourn further consideration of the Bill. Given that they have been found out, why should we allow them simply to escape the consequences of their behaviour by summarily attempting to bring our proceedings to an end?
    Mr. Corbyn: I can understand how the hon. Gentleman discovered his voice—he obviously practises megaphone
    836
    diplomacy. Will he stop shouting? It is very disturbing to many of us up here who are trying to rest. Can he not accept that at 12 minutes past four, it is a brilliant decision of the Government to propose that the House adjourn? Why does he not just accept that, and let us go home?
    Mr. Davies: I can see that, for the hon. Gentleman, the lure of his bed overrides all other considerations. That should not be our priority, because we have uncovered a Government who have been treating Parliament with systematic arrogance. I come back to their treatment of the insolvency provision because it is germane to the point that I am making.
    There are only two possibilities. Either the Government knew that the Bill as published did not contain their real legislative proposals, and they had in their back pocket something else which they would bring out tonight, having tabled it at the last minute on Thursday in the hope that no one would notice. That is a terrible thing for a Government to do in a parliamentary democracy. Alternatively, they genuinely believed in the original proposals—clauses 11 and 12—and then changed their mind or decided that they had made a mistake. Perhaps they literally do not know what they are doing between Tuesdays and Thursdays. That is another possible explanation.
    The House can choose any of those explanations; I do not know which is the least complimentary to the Government. If anybody can think of a third or fourth logically feasible possibility, I hope that they will intervene on me. Given that no one is seeking to intervene, I take that as confirmation of my description of how the Government have been conducting their affairs.
    When the Government are found out in this way, should we just let them go off to bed and try and forget all about it? I do not think we should. Some profound issues need to be brought out into the open and debated.
    We should not be afraid to give the Government a very hard time, because that is what Parliament should do with a Government who have been intoxicated by the arrogance of power. We have no intention of letting them off lightly. We intend to make them regret and repent their ways, and we shall be doing a good job for parliamentary democracy if we do so. We shall make it plain that, if they get things badly wrong and do not have the honesty and straightforwardness to accept that they have got them badly wrong; if they make mistakes or U-turns and come to the House and pretend that they have made no U-turns and that black is white and red is green, we shall not say, "Well, all right. We shall just stop proceedings because it is getting embarrassing for you. You can all go home to bed and try again another day when you might get away with it". We will not do that. We shall make them stand here and answer the many questions that require to be answered.
    Only a few hours ago, the Secretary of State was briefing the press. He told them that the Government would defeat the Opposition and would roll them over in just a few hours. They have found that that cannot be done in a few hours, and they are feeling battered and bruised. They have even put up one or two Labour Members who do not normally intervene on such occasions to save the Government's embarrassment by suggesting that we should foreclose proceedings. The best argument that the hon. Member for Islington, North (Mr. Corbyn) could put was that some of us may be feeling a little tired.
    4.15 am
    Mr. Denis MacShane: Many of us who admire the hon. Gentleman's talents have often wondered why he was not given a Front-Bench job in the last Government. Now we realise that he would never have stopped talking. He is a courteous gentlemen, so could he give us some indication of when he proposes to sit down. We could all come back for his last 30 seconds, but in the meantime we could go off and do something more useful.
    Mr. Davies: I do not know whether I should return the compliment by saying that we are sorry that the hon. Gentleman was not promoted to the Front Bench. Given the situation in which he finds himself now, perhaps a more significant and important role for him is the one that he can perform on the Back Benches. It is equally important that Labour Back-Bench Members keep the Government on their toes and prevent them from getting away with their recent monstrous assumptions about how they can treat the House. If the hon. Gentleman wants to do a good job for the Labour party, and if he wants the Labour party to have a future, I suggest that he uses his undoubted energies and talents to make it plain to the Government that such behaviour will not wash and will not be tolerated.
    Labour Members, no doubt with considerable courage—
    Mr. Deputy Speaker: Order. The hon. Gentleman must come back to the Question whether consideration of the Bill be now adjourned.
    Mr. Davies: I do not believe that consideration should now be adjourned, because we are about to launch into a discussion of important matters.
    Mr. Deputy Speaker: Order. I have already ruled that we cannot discuss future matters because they will fall to be considered on a future occasion.
    Mr. Davies: Before we allow the Government to adjourn proceedings tonight, we must probe the reasons why they have suddenly changed their mind. It is not the first time that they have changed their mind. As 1 have said, there are several inconsistencies between the proposals that they have brought before us now and the original provisions of the Bill. What is new and has happened in the past half an hour or so is that they have changed their mind about seeking parliamentary approval for the totality of these proposals.
    Mr. Deputy Speaker: Order. I must point out to the hon. Gentleman that the Question before the House is not why, it is whether.
    Mr. Davies: I wonder whether it is possible to consider the question whether without considering the question why.
    Sir Richard Body rose—
    Mr. Burns rose—
    Mr. Garnier rose—
    Mr. Davies: I shall give way to my most senior colleague, my hon. Friend the Member for Boston and Skegness (Sir R. Body).
    Sir Richard Body: My hon. Friend has been most restrained, considering the circumstances. Is there not one
    838
    argument that should be considered in favour of adjournment? We have no one up there in the Gallery to report the shambles.
    Mr. Deputy Speaker: Order. The hon. Gentleman is an experienced Member of the House, and he should realise that there can be reference to no one other than those who are present in the Chamber.
    Sir Richard Body: Is there not a chance that our proceedings might be reported, which would enable the public to appreciate what has been going on here, how arrogant and appalling the Government are and what a mess the Bill is?
    Mr. Davies: My hon. Friend is absolutely right. I know that it is not right to refer to anyone in the Chamber other than Members of Parliament, but I think it is proper to refer to the media in general, which—rightly—focus on this place. It is not an accident that the moment that the Government have chosen to try to run away from the debate is the moment at which, probably, there is the least scrutiny from the media in general, whether by individuals who may be present above the Chamber or by others. Obviously, one of the Government's motives is the fact that they do not want the media to return in the morning and find that the Government are retiring in tatters.
    Mr. Michael Colvin: Is there not a very good reason for the House not to adjourn at 4.20 am? The next clutch of new clauses, to which my hon. Friend has rightly drawn the House's attention, relate to the uprating of pensions overseas. This may be a diabolical hour for us to debate the matter in the Chamber, but for those who will be affected in Canada and Australia it is prime listening time. They are all glued to their radio sets, listening to what is going on here.
    This evening's debates have been won consistently by the Opposition and the Labour rebels. The fact that the Government continue to win the votes is immaterial: the debates have been won by those who have opposed the Government's proposals.
    Mr. Deputy Speaker: Order. The hon. Gentleman has strayed far enough from the Question.
    Mr. Davies: My hon. Friend is right. Those who are listening in from Canada, Australia or anywhere else will have no illusions about who is responsible for destroying their reasonable hopes—
    Mr. Burns: Will my hon. Friend give way?
    Mr. Davies: I will when I have finished my sentence, if that is permitted. Those people will have no illusions about who is responsible for destroying their reasonable hopes of receiving the benefit to which they are entitled through their own national insurance contributions in this country. Listeners in Canada, Australia or elsewhere will also appreciate that the Government are not prepared

    839
    to defeat and destroy their aspirations by presenting arguments. The Government are running away from the argument, which is despicable.
    Miss McIntosh rose—
    Mr. Hayes rose—
    Mr. Burns rose—
    Mr. Davies: I will give way to my hon. Friend the Member for West Chelmsford (Mr. Burns) first.
    Mr. Burns: Is not a compelling reason for us not to adjourn now the fact that, at 10 pm last night, the Government were able to choose whether to continue consideration of the Bill or to call it a day and come back another day? They made a definite decision to proceed—
    Miss McIntosh: Until any hour.
    Mr. Burns: Until any hour, as my hon. Friend says.
    What has happened between then and now? Have the Government suddenly realised that they face a defeat later this morning? Are they drawing stumps to avoid the humiliation that would be inflicted on them by a number of their hon. Friends?
    Mr. Davies: It is incontrovertible that the Government changed their mind. They have changed their mind about substance many times, and tonight they changed their mind about procedure. They found that the going was ceasing to be tolerable. They thought that they could get all the measures through as recently as 10 pm, but now they know that they cannot get them through in good order. They have lost the argument on insolvency; they have lost the argument on bereavement, on which they found that the mass of their own Back Benchers were against them. Now they simply cannot contend with us on stakeholder pensions, or, of course, on incapacity benefit.
    All Labour Members are doing is postponing the evil day. They are entirely wrong if they think that we shall simply go to our beds and forget about it, and talk about something else tomorrow or next week. Nevertheless, tonight has been very revealing. Here we have a Government who, for all their arrogance, made a clear commitment at 10 pm to getting measures through the House and then found some six hours later that they could no longer live up to it.
    Mr. Garnier rose—
    Mrs. Browning rose—
    Mr. Hayes rose—
    Mr. Swayne rose—
    Mr. Davies: I see that a phalanx wish to intervene. To be fair, I can think of no other way than to go from left to right.
    Mr. Garnier: I take it as a compliment that my hon. Friend has started from the left.
    840
    Does my hon. Friend know when the Government propose to resume the proceedings? When the Government Whip moved the motion, did he indicate when the Government would condescend to revisit the matter? If we are to adjourn now, it is essential that we should know when we can consult our constituents and when my hon. Friend can consult the experts, academics and others, so that we can revisit the matter.
    Mr. Deputy Speaker: Order. I hope that the hon. Member for Grantham and Stamford (Mr. Davies) will not go down that line. This Question must be dealt with first. Presumably, when it is dealt with, or as it is reached, an indication will be given of further consideration.
    Mr. Davies: It may be in order to anticipate. I can certainly anticipate with complete confidence that the last thing that the Government want to talk about tonight is resuming the debate, which has been disastrous for them. They will go away burying their head in their hands and hoping against hope that they never have to confront the House on those measures again, or have the shambles of their behaviour exposed again.
    Mrs. Browning: My hon. Friend will know that we have spent some 13 hours discussing and debating six sets of new clauses and amendments. I should now like to persuade him that it would be appropriate to adjourn.
    Those of us who have participated over those 13 hours, and I came to the Chamber especially to debate the measures that dealt with pensions and disability, have made a contribution; I say that to Members on both sides of the House who have contributed to the serious matters before us. However, as my hon. Friend will know, fewer Members, certainly on the Government Benches, were in the Chamber for any of the debates on various important matters—maternity allowance, work-focused interviews, the effects of insolvency on pension rights, earnings of workers and bereavement benefits—than are here for the present debate.
    I believe that, in recognition of the seriousness of the matters that still remain to be dealt with, and to give credit to the people outside who will have an interest in what we have to say on the remaining issues, it is incumbent on us not to fill those debates just with Lobby fodder, which we see before us.
    Mr. Davies: My hon. Friend speaks with genuine feeling. She has a considerable record in the House of speaking with great knowledge and understanding, particularly on disability and incapacity issues. I can understand her concern at the frivolous way in which the Government have treated our procedures, quite apart from the cruel way in which they propose to treat recipients of the various benefits. There is a fascinating contrast between the participation of Labour Members in the substantive discussions earlier and their participation now in the procedural debate, when we find that the Government Benches have almost filled up.
    It is even more fascinating that few of the Back Benchers who have been on the Government Benches during any part of our proceedings tonight have sought to defend what the Government are doing. They were clearly embarrassed. Those who were disposed to be more loyal to the Government stayed away. Those who contributed

    841
    to our proceedings—we have had distinguished speeches from many Labour Members— invariably spoke against the Government proposals, particularly those on bereavement benefit.
    Therefore, it is clear that the Government cannot mobilise their Members to support them on the substance—on their policies. The best that they can do is mobilise some support to adjourn proceedings, appealing to matters of personal comfort. Although it is understandable that people should like to go back to their homes at this time of night, surely that should not be decisive in determining the way in which we conduct our proceedings in the House of Commons.
    Mr. Hayes: I risk disagreeing with my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning), who, as my hon. Friend says, has enjoyed a distinguished career in the House, despite her rather radical feminist views—with which I do not agree, I hasten to add. I believe that it would be inappropriate to adjourn the debate. The hon. Members for Kingswood (Mr. Berry), for Gedling (Mr. Coaker) for Croydon, North (Mr. Wicks), other Opposition Members and I have sat throughout the long debates, listening quite carefully to what has been said, because we wanted to debate matters of on-going concern.
    4.30 am
    Although I accept—as the Deputy Speaker has ruled—that we are here to debate not what happened in the past, but the present, I must tell my hon. Friend the Member for Grantham and Stamford (Mr. Davies) that the public will find it very strange indeed if, having reached this point in the debate, we should choose to end it at 4 o'clock in the morning. It would have been acceptable to end the debate before completing our consideration if we had chosen to do so last night, but, having got so far into the night, the public will expect us to see the matter through.
    Mr. Davies: I absolutely agree with my hon. Friend.
    Mr. Swayne: I should like simply to draw my hon. Friend's attention to the fact that, when the business statement is made to the House on Thursdays, it is always prefaced with the remark, "subject to the satisfactory progress of business". Many Labour Members take great pleasure in being away from this place. I should warn them that, given that the House's business will not have progressed satisfactorily today, we might meet next Thursday to proceed with it.
    Mr. Davies: The Government have an overwhelming majority and, ultimately, can do what they like with the House of Commons—which is what is so terrifying about the position in which we find ourselves. Nevertheless, today, the House of Commons has had a victory against an overbearing and arrogant Government. The Government were not able, as they had originally planned, to carry on through the night. They found that they just could not take the heat any longer, and that they could no longer effectively mobilise their supporters to back them. They also knew that, with the stakeholder pension, they were entering extremely difficult country, and that—with their pernicious plans to rob the incapacitated and
    842
    disabled of the fruits of their national insurance contributions—they were facing a revolt by Members on both sides of the House.
    The best that the Government could do today was to throw in the sponge, hoping against hope that, at some point in the future, they might somehow get away with their proposals. They are a Government who are in denial about their own obvious failure to convince either side of the House of their intentions.
    Sir Richard Body: Will my hon. Friend give way?
    Mr. Davies: No; I shall not give way again. I have already taken quite a few interventions.
    Mr. Keith Bradley (Treasurer of Her Majesty's Household)rose in his place and claimed to move, That the Question be now put.
    Question put, That the Question be now put:—
    The House divided: Ayes 318, Noes 34.

    Division No. 183]

    [4.33 am

    AYES

    Adams, Mrs Irene (Paisley N)

    Clark, Rt Hon Dr David (S Shields)

    Ainsworth, Robert (Cov'try NE)

    Clark, Dr Lynda

    Alexander, Douglas

    (Edinburgh Pentlands)

    Allen, Graham

    Clark, Paul (Gillingham)

    Anderson, Donald (Swansea E)

    Clarke, Charles (Norwich S)

    Anderson, Janet (Rossendale)

    Clarke, Rt Hon Tom (Coatbridge)

    Armstrong, Rt Hon Ms Hilary

    Clarke, Tony (Northampton S)

    Ashton, Joe

    Clelland, David

    Atherton, Ms Candy

    Clwyd, Ann

    Atkins, Charlotte

    Coaker, Vernon

    Austin, John

    Coffey, Ms Ann

    Barnes, Harry

    Cohen, Harry

    Barron, Kevin

    Coleman, lain

    Battle, John

    Colman, Tony

    Bayley, Hugh

    Connarty, Michael

    Beard, Nigel

    Corbett, Robin

    Bell, Stuart (Middlesbrough)

    Corbyn, Jeremy

    Benn, Rt Hon Tony

    Corston, Ms Jean

    Bennett, Andrew F

    Cousins, Jim

    Benton, Joe

    Cox, Tom

    Bermingham, Gerald

    Crausby, David

    Berry, Roger

    Cryer, John (Hornchurch)

    Best, Harold

    Cummings, John

    Betts, Clive

    Cunningham, Jim (CoV'try S)

    Blears, Ms Hazel

    Curtis—Thomas, Mrs Claire

    Blizzard, Bob

    Dalyell, Tam

    Boateng, Paul

    Darling, Rt Hon Alistair

    Borrow, David

    Darvill, Keith

    Bradley, Keith (Withington)

    Davey, Valerie (Bristol W)

    Bradley, Peter (The Wrekin)

    Davidson, Ian

    Bradshaw, Ben

    Davies, Rt Hon Denzil (Llanelli)

    Brinton, Mrs Helen

    Davies, Geraint (Croydon C)

    Brown, Russell (Dumfries)

    Dawson, Hilton

    Browne, Desmond

    Dean, Mrs Janet

    Buck, Ms Karen

    Dismore, Andrew

    Burden, Richard

    Dobbin, Jim

    Burgon, Colin

    Donohoe, Brian H

    Butler, Mrs Christine

    Doran, Frank

    Byers, Rt Hon Stephen

    Dowd, Jim

    Campbell, Mrs Anne (C'bridge)

    Drew, David

    Campbell, Ronnie (Blyth V)

    Drown, Ms Julia

    Cann, Jamie

    Eagle, Maria (L'pool Garston)

    Casale, Roger

    Edwards, Huw

    Caton, Martin

    Efford, Clive

    Cawsey, Ian

    Ellman, Mrs Louise

    Chapman, Ben (Wirral S)

    Ennis, Jeff

    Chaytor, David

    Field, Rt Hon Frank

    Clapham, Michael

    Fisher, Mark

    843

    Fitzpatrick, Jim

    Laxton, Bob

    Fitzsimons, Lorna

    Lepper, David

    Flynn, Paul

    Leslie, Christopher

    Follett, Barbara

    Levitt, Tom

    Foster, Michael Jabez (Hastings)

    Lewis, Ivan (Bury S)

    Foster, Michael J (Worcester)

    Lewis, Terry (Worsley)

    Foulkes, George

    Liddell, Rt Hon Mrs Helen

    Fyfe, Maria

    Linton, Martin

    Gapes, Mike

    Lloyd, Tony (Manchester C)

    Gardiner, Barry

    Lock, David Love, Andrew

    George, Bruce (Walsall S)

    McAllion, John

    Gerrard, Neil

    McAvoy, Thomas

    Gibson, Dr Ian

    McCabe, Steve

    Gilroy, Mrs Linda

    McCafferty, Ms Chris

    Godman, Dr Norman A

    McDonagh, Siobhain

    Godsiff, Roger

    Macdonald, Calum

    Goggins, Paul

    McDonnell, John

    Gordon, Mrs Eileen

    McFall, John

    Griffiths, Jane (Reading E)

    McGuire, Mrs Anne

    Griffiths, Nigel (Edinburgh S)

    McIsaac, Shona

    Griffiths, Win (Bridgend)

    McKenna, Mrs Rosemary

    Grocott, Bruce Grogan, John

    Mackinlay, Andrew

    Hall, Patrick (Bedford)

    McLeish, Henry

    Hamilton, Fabian (Leeds NE)

    McNamara, Kevin

    Hanson, David

    McNulty, Tony

    Heal, Mrs Sylvia

    MacShane, Denis

    Healey, John

    Mactaggart, Fiona

    Henderson, Ivan (Harwich)

    McWatter, Tony

    Hepburn, Stephen

    Mallaber, Judy

    Hesford, Stephen

    Mandelson, Rt Hon Peter

    Hewitt, Ms Patricia

    Marsden, Gordon (Blackpool S)

    Hinchliffe, David

    Marsden,Paul (Shrewsbury)

    Home Robertson, John

    Marshall, David (Shettleston)

    Hoon, Geoffrey

    Martlew, Eric

    Hopkins, Kelvin

    Meacher, Rt Hon Michael

    Howarth, George (Knowsley N)

    Meale, Alan

    Howells, Dr Kim

    Merron, Gillian

    Hoyle, Lindsay

    Michie, Bill (Shefld Heeley)

    Hughes, Ms Beverley (Stretford)

    Milburn, Rt Hon Alan

    Hughes, Kevin (Doncaster N)

    Miller, Andrew

    Humble, Mrs Joan

    Mitchell, Austin

    Hurst, Alan

    Moffatt, Laura

    Iddon, Dr Brian

    Moonie, Dr Lewis

    Illsley, Eric

    Morgan, Ms Julie (Cardiff N)

    Ingram, Rt Hon Adam

    Mullin, Chris

    Jackson, Ms Glenda (Hampstead)

    Murphy, Denis (Wansbeck)

    Jackson, Helen (Hillsborough)

    Murphy, Jim (Eastwood)

    Jamieson, David

    Naysmith, Dr Doug

    Jenkins, Brian

    Norris, Dan

    Johnson, Alan (Hull W & Hessle)

    O'Brien, Bill (Normanton)

    Johnson, Miss Melanie

    O'Brien, Mike (N Warks)

    (Welwyn Hatfield)

    O'Hara, Eddie

    Jones, Barry (Alyn & Deeside)

    O'Neill, Martin

    Jones, Mrs Fiona (Newark)

    Organ, Mrs Diana

    Jones, Helen (Warrington N)

    Osborne, Ms Sandra

    Jones, Ms Jenny

    Pearson, Ian

    (Wolverh'ton SW)

    Pendry, Tom

    Jones, Dr Lynne (Selly Oak)

    Perham, Ms Linda

    Jones, Martyn (Clwyd S)

    Pickthall, Colin

    Jowell, Rt Hon Ms Tessa

    Pike, Peter L

    Kaufman, Rt Hon Gerald

    Plaskitt, James

    Keeble, Ms Sally

    Pollard, Kerry

    Keen, Alan (Feltham & Heston)

    Pond, Chris

    Keen, Ann (Brentford & Isleworth)

    Pope, Greg

    Kelly, Ms Ruth

    Pound, Stephen

    Kemp, Fraser

    Powell, Sir Raymond

    Kennedy, Jane (Wavertree)

    Prentice, Ms Bridget (Lewisham E)

    Khabra, Piara S

    Prentice, Gordon (Pendle)

    Kidney, David

    Prosser, Gwyn

    King, Andy (Rugby & Kenilworth)

    Purchase, Ken

    King, Ms Oona (Bethnal Green)

    Quinn, Lawrie

    Kingham, Ms Tess

    Radice, Giles

    Kumar, Dr Ashok

    Rammell, Bill

    Ladyman, Dr Stephen

    Raynsford, Nick

    Lawrence, Ms Jackie

    Roche, Mrs Barbara

    844

    Rooker, Jeff

    Taylor, Ms Dari (Stockton S)

    Rooney, Terry

    Temple—Morris, Peter

    Ross, Ernie (Dundee W)

    Thomas, Gareth (Clwyd W)

    Rowlands, Ted

    Thomas, Gareth R (Harrow W)

    Roy, Frank

    Thompson, William

    Ruane, Chris

    Timms, Stephen

    Ruddock, Joan

    Todd, Mark

    Russell, Ms Christine (Chester)

    Touhig, Don

    Ryan, Ms Joan

    Trickett, Jon

    Salter, Martin

    Truswell, Paul

    Sarwar, Mohammad

    Turner, Dennis (Wolverh'ton SE)

    Savidge, Malcolm

    Turner, Dr Desmond (Kemptown)

    Sawford, Phil

    Turner, Dr George (NW Norfolk)

    Sedgemore, Brian

    Twigg, Derek (Halton)

    Shaw, Jonathan

    Twigg, Stephen (Enfield)

    Short, Rt Hon Clare

    Vis, Dr Rudi

    Simpson, Alan (Nottingham S)

    Walley, Ms Joan

    Singh, Marsha

    Ward, Ms Claire

    Skinner, Dennis

    Wareing, Robert N

    Smith, Rt Hon Andrew (Oxford E)

    Watts, David

    Smith, Angela (Basildon)

    White, Brian

    Smith, Miss Geraldine

    Whitehead, Dr Alan

    (Morecambe & Lunesdale)

    Wicks, Malcolm

    Smith, Jacqui (Redditch)

    Williams, Rt Hon Alan

    Smith, John (Glamorgan)

    (Swansea W)

    Smith, Llew (Blaenau Gwent)

    Williams, Alan W (E Carmarthen)

    Soley, Clive

    Williams, Mrs Betty (Conwy)

    Southworth, Ms Helen

    Wills, Michael

    Squire, Ms Rachel

    Winnick, David

    Starkey, Dr Phyllis

    Winterton, Ms Rosie (Doncaster C)

    Steinberg, Gerry

    Wise, Audrey

    Stevenson, George

    Wood, Mike

    Stinchcombe, Paul

    Woolas, Phil

    Stoate, Dr Howard

    Wright, Anthony D (Gt Yarmouth)

    Strang, Rt Hon Dr Gavin

    Wright, Dr Tony (Cannock)

    Stringer, Graham

    Wyatt, Derek

    Stuart, Ms Gisela

    Sutcliffe, Gerry

    Tellers for the Ayes:

    Taylor, Rt Hon Mrs Ann

    Mr. Mike Hall and

    (Dewsbury)

    Mr. Keith Hill.

    NOES

    Allan, Richard

    McLoughlin, Patrick

    Beggs, Roy

    Moore, Michael

    Body, Sir Richard

    Nicholls, Patrick

    Brady, Graham

    Öpik, Lembit

    Browning, Mrs Angela

    Pickles, Eric

    Burns, Simon

    Rendel, David

    Colvin, Michael

    Russell, Bob (Colchester)

    Davies, Quentin (Grantham)

    Sanders, Adrian

    Duncan Smith, lain

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

    Ewing, Mrs Margaret

    Stunell, Andrew

    Foster, Don (Bath)

    Swayne, Desmond

    Gale, Roger

    Swinney, John

    Garnier, Edward

    Syms, Robert

    Gray, James

    Tyler, Paul

    Hayes, John

    Webb, Steve

    Hughes, Simon (Southwark N)

    Hunter, Andrew

    Tellers for the Noes:

    Lait, Mrs Jacqui

    Mrs. Eleanor Laing and

    McIntosh, Miss Anne

    Mr. Tim Collins.

    Question accordingly agreed to.
    4.45 am
    Mr. Roger Gale: On a point of order, Mr. Deputy Speaker. The closure was taken when only one Opposition Member had been called to speak, on a matter that was debatable and could have been discussed for a considerable time. That is worrying to those of us who are concerned about the manner in which the procedures of the House are being manipulated. My point of order very specifically for the Chair—
    Mr. Deputy Speaker (Mr. Michael Lord): Order. I will deal with that point of order straight away. When closures are accepted is entirely a matter for the Chair, and that decision has been taken.
    Mr. Gale rose—
    Mr. Deputy Speaker: No, I have dealt with the point of order.
    Mr. Gale rose—
    Mr. Deputy Speaker: Order. I have dealt with the point of order. Closures are entirely a matter for the Chair. The hon. Gentleman is an experienced Member of Parliament and must know that.
    Mr. Gale rose—
    Mr. Deputy Speaker: Order.
    Mr. Gale: On an entirely different point of order, Mr. Deputy Speaker. Madam Speaker is the United Kingdom president of the Commonwealth Parliamentary Association. It is a matter that she takes very seriously indeed. Last year, I and others visited Canada with the Commonwealth Parliamentary Association, and we were lobbied very hard by overseas pensioners who are very concerned about their pension rights. The—
    Mr. Deputy Speaker: Order. The hon. Gentleman is reopening a debate that we had earlier. I will not hear his point of order any further.
    Question put accordingly, That further consideration be now adjourned:—
    The House divided: Ayes 314, Noes 21.

    Division No. 184]

    [4.47 am

    AYES

    Adams, Mrs Irene (Paisley N)

    Brinton, Mrs Helen

    Ainger, Nick

    Brown, Russell (Dumfries)

    Ainsworth, Robert (Cov'try NE)

    Browne, Desmond

    Allen, Graham

    Buck, Ms Karen

    Anderson, Donald (Swansea E)

    Burden, Richard

    Anderson, Janet (Rossendale)

    Burgon, Colin

    Armstrong, Rt Hon Ms Hilary

    Butler, Mrs Christine

    Atherton, Ms Candy

    Campbell, Alan (Tynemouth)

    Atkins, Charlotte

    Cann, Jamie

    Austin, John

    Casale, Roger

    Barnes, Harry

    Caton, Martin

    Barron, Kevin

    Cawsey, Ian

    Battle, John

    Chapman, Ben (Wirral S)

    Bayley, Hugh

    Chaytor, David

    Beard, Nigel

    Clapham, Michael

    Benn, Rt Hon Tony

    Clark, Rt Hon Dr David (S Shields)

    Bennett, Andrew F

    Clark, Dr Lynda

    Benton, Joe

    (Edinburgh Pentlands)

    Bermingham, Gerald

    Clark, Paul (Gillingham)

    Berry, Roger

    Clarke, Charles (Norwich S)

    Best, Harold

    Clarke, Rt Hon Tom (Coatbridge)

    Betts, Clive

    Clarke, Tony (Northampton S)

    Blears, Ms Hazel

    Clelland, David

    Blizzard, Bob

    Clwyd, Ann

    Boateng, Paul

    Coaker, Vernon

    Borrow, David

    Coffey, Ms Ann

    Bradley, Keith (Withington)

    Cohen, Harry

    Bradley, Peter (The Wrekin)

    Coleman, lain

    Bradshaw, Ben

    Colman. Tony

    846

    Connarty, Michael

    Hurst, Alan

    Corbett, Robin

    Iddon, Dr Brian

    Corbyn, Jeremy

    Illsley, Eric

    Corston, Ms Jean

    Ingram, Rt Hon Adam

    Cousins, Jim

    Jackson, Ms Glenda (Hampstead)

    Cox, Tom

    Jackson, Helen (Hillsborough)

    Crausby, David

    Jamieson, David

    Cryer, John (Hornchurch)

    Jenkins, Brian

    Cunningham, Jim (Covtry S)

    Johnson, Alan (Hull W & Hessle)

    Curtis—Thomas, Mrs Claire

    Johnson, Miss Melanie

    Dalyell, Tam

    (Welwyn Hatfield)

    Darling, Rt Hon Alistair

    Jones, Barry (Alyn & Deeside)

    Darvill, Keith

    Jones, Mrs Fiona (Newark)

    Davey, Valerie (Bristol W)

    Jones, Helen (Warrington N)

    Davidson, Ian

    Jones, Ms Jenny

    Davies, Rt Hon Denzil (Llanelli)

    (Wolverh'ton SW)

    Davies, Geraint (Croydon C)

    Jones, Dr Lynne (Selly Oak)

    Dawson, Hilton

    Jones, Marlyn (Clwyd S)

    Dean, Mrs Janet

    Jowell, Rt Hon Ms Tessa

    Dismore, Andrew

    Kaufman, Rt Hon Gerald

    Dobbin, Jim

    Keeble, Ms Sally

    Donohoe, Brian H

    Keen, Alan (Feltham & Heston)

    Doran, Frank

    Keen, Ann (Brentford & lsleworth)

    Dowd, Jim

    Kelly, Ms Ruth

    Drew, David

    Kemp, Fraser

    Drown, Ms Julia

    Kennedy, Jane (Wavertree)

    Eagle, Maria (L'pool Garston)

    Khabra, Piara S

    Edwards, Huw

    Kidney, David

    Efford, Clive

    King, Andy (Rugby & Kenilworth)

    Ellman, Mrs Louise

    King, Ms Oona (Bethnal Green)

    Ennis, Jeff

    Kingham, Ms Tess

    Ewing, Mrs Margaret

    Kumar, Dr Ashok

    Field, Rt Hon Frank

    Ladyman, Dr Stephen

    Fisher, Mark

    Lawrence, Ms Jackie

    Fitzpatrick, Jim

    Laxton, Bob

    Fitzsimons, Lorna

    Lepper, David

    Flynn, Paul

    Leslie, Christopher

    Follett, Barbara

    Levitt, Tom

    Foster, Michael Jabez (Hastings)

    Lewis, Ivan (Bury S)

    Foster, Michael J (Worcester)

    Lewis, Terry (Worsley)

    Foulkes, George

    Liddell, Rt Hon Mrs Helen

    Fyfe, Maria

    Linton, Martin

    Gapes, Mike

    Lock, David

    Gardiner, Barry

    Love, Andrew

    George, Bruce (Walsall S)

    McAllion, John

    Gerrard, Neil

    McAvoy, Thomas

    Gibson, Dr Ian

    McCabe, Steve

    Gilroy, Mrs Linda

    McCafferty, Ms Chris

    Godman, Dr Norman A

    McDonagh, Siobhain

    Godsiff, Roger

    Macdonald, Calum

    Goggins, Paul

    McDonnell, John

    Gordon, Mrs Eileen

    McFall, John

    Griffiths, Jane (Reading E)

    McGuire, Mrs Anne

    Griffiths, Nigel (Edinburgh S)

    Mclsaac, Shona

    Griffiths, Win (Bridgend)

    McKenna, Mrs Rosemary

    Grocott, Bruce

    Mackinlay, Andrew

    Grogan, John

    McLeish, Henry

    Hall, Patrick (Bedford)

    McNamara, Kevin

    Hamilton, Fabian (Leeds NE)

    McNulty, Tony

    Hanson, David

    MacShane, Denis

    Heal, Mrs Sylvia

    Mactaggart, Fiona

    Healey, John

    McWalter, Tony

    Henderson, Ivan (Harwich)

    Mahon, Mrs Alice

    Hepburn, Stephen

    Mallaber, Judy

    Heppell, John

    Mandelson, Rt Hon Peter

    Hesford, Stephen

    Marsden, Gordon (Blackpool S)

    Hewitt, Ms Patricia

    Marsden, Paul (Shrewsbury)

    Hinchliffe, David

    Marshall, David (Shettleston)

    Home Robertson, John

    Marshall—Andrews, Robert

    Hoon, Geoffrey

    Martlew, Eric

    Hopkins, Kelvin

    Meacher, Rt Hon Michael

    Howarth, George (Knowsley N)

    Meale, Alan

    Hoyle, Lindsay

    Merron, Gillian

    Hughes, Ms Beverley (Stretford)

    Michie, Bill (Shefld Heeley)

    Hughes, Kevin (Doncaster N)

    Miller, Andrew

    Humble. Mrs Joan

    Mitchell, Austin

    847

    Moffatt, Laura

    Smith, John (Glamorgan)

    Moonie, Dr Lewis

    Smith, Llew (Blaenau Gwent)

    Morgan, Ms Julie (Cardiff N)

    Soley, Clive

    Murphy, Jim (Eastwood)

    Southworth, Ms Helen

    Naysmith, Dr Doug

    Squire, Ms Rachel

    Norris, Dan

    Starkey, Dr Phyllis

    O'Brien, Bill (Normanton)

    Steinberg, Gerry

    O'Brien, Mike (N Warks)

    Stevenson, George

    O'Hara, Eddie

    Stinchcombe, Paul

    Olner, Bill

    Stoate, Dr Howard

    O'Neill, Martin

    Strang, Rt Hon Dr Gavin

    Organ, Mrs Diana

    Stringer, Graham

    Osborne, Ms Sandra

    Stuart, Ms Gisela

    Pearson, Ian

    Sutcliffe, Gerry

    Pendry, Tom

    Swinney, John

    Perham, Ms Linda

    Taylor, Rt Hon Mrs Ann

    Pickthall, Colin

    (Dewsbury)

    Pike, Peter L

    Taylor, Ms Dart (Stockton S)

    Plaskitt, James

    Temple—Morris, Peter

    Pollard, Kerry

    Thomas, Gareth (Clwyd W)

    Pond, Chris

    Thomas, Gareth R (Harrow W)

    Pope, Greg

    Timms, Stephen

    Pound, Stephen

    Todd, Mark

    Powell, Sir Raymond

    Touhig, Don

    Prentice, Ms Bridget (Lewisham E)

    Trickett, Jon

    Prentice, Gordon (Pendle)

    Truswell, Paul

    Prosser, Gwyn

    Turner, Dennis (Wolerh'ton SE)

    Purchase, Ken

    Turner, Dr Desmond (Kemptown)

    Quinn, Lawrie

    Turner, Dr George (NW Norfolk)

    Radice, Giles

    Twigg, Derek (Halton)

    Rammell, Bill

    Twigg, Stephen (Enfield)

    Raynsford, Nick

    Vis, Dr Rudi

    Roche, Mrs Barbara

    Walley, Ms Joan

    Rooker, Jeff

    Ward, Ms Claire

    Rooney, Terry

    Wareing, Robert N

    Ross, Ernie (Dundee W)

    Watts, David

    Rowlands, Ted

    White, Brian

    Roy, Frank

    Whitehead, Dr Alan

    Ruane, Chris

    Wicks, Malcolm

    Ruddock, Joan

    Williams, Rt Hon Alan

    Russell, Ms Christine (Chester)

    (Swansea W)

    Ryan, Ms Joan

    Williams, Alan W (E Carmarthen)

    Salter, Martin

    Williams, Mrs Betty (Conwy)

    Sarwar, Mohammad

    Wills, Michael

    Savidge, Malcolm

    Winnick, David

    Sawford, Phil

    Winterton, Ms Rosie (Doncaster C)

    Sedgemore, Brian

    Wise, Audrey

    Shaw, Jonathan

    Wood, Mike

    Short, Rt Hon Clare

    Woolas, Phil

    Simpson, Alan (Nottingham S)

    Worthington, Tony

    Singh, Marsha

    Wright, Anthony D (Gt Yarmouth)

    Skinner, Dennis

    Wright, Dr Tony (Cannock)

    Smith, Rt Hon Andrew (Oxford E)

    Wyatt, Derek

    Smith, Angela (Basildon)

    Smith, Miss Geraldine

    Tellers for the Ayes:

    (Morecambe & Lunesdale)

    Mr. Mike Hall and

    Smith, Jacqui (Redditch)

    Mr. Keith Hill.

    NOES

    Allan, Richard

    Nicholls, Patrick

    Body, Sir Richard

    Öpik, Lembit

    Brady, Graham

    Rendel, David

    Browning, Mrs Angela

    Russell, Bob (Colchester)

    Foster, Don (Bath)

    Sanders, Adrian

    Gray, James

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

    Hayes, John

    Stunell, Andrew

    Hughes, Simon (Southwark N)

    Syms, Robert

    Hunter, Andrew

    Webb, Steve

    Lait, Mrs Jacqui

    Tellers for the Noes:

    McIntosh, Miss Anne

    Mr. Desmond Swayne and

    Moore, Michael

    Mr. Roger Gale.

    Question accordingly agreed to.
    Bill to be further considered tomorrow.

  Litter Laws
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Betts.]
  4.57 am
  Mr. Bob Blizzard: I was going to start by saying, "When the drama is over", but I think that, after the last hour, I should say, "When the farce is over." When the farce is over, the crowds disappear and all that remains is the Adjournment debate; so it is with my topic this evening, or this morning—or whatever it is. When the town centres empty of people, all that remains is the litter.
  My central point is that litter is a form of pollution—pollution of the environment in its most basic and common form. It occurs throughout the country. Litter is a form of pollution with a very simple cause. One does not need a chemical factory pouring effluent into a river, or a smokestack discharging into the air, or a vehicle with exhaust emissions —just ordinary people dropping litter, as a result of laziness, thoughtlessness, carelessness, plain disregard or loutishness. That pollution is very visual, spoiling our streets, the alleyways and corners of our built environment and spoiling the natural environment of our countryside, especially on verges beside roads as litter is often lobbed out of cars. It also spoils our beaches, parks, open spaces and other places of recreation.
  Litter is also a health risk, as it includes rotting material, broken glass, jagged metal, dangerous objects, cigarette ends and other things that can be picked up by young children. Dog fouling constitutes an even more serious health risk in the form of toxocariasis—a disease carried in dog faeces—which can be picked up by children playing in a fouled area and which can damage their eyesight.
  Litter pollution has a much simpler solution than most other forms of pollution. There is no need to fit filtering devices to chimneys, to set up purifying processes in chemical plants, or to develop an integrated transport policy to reduce car usage, or even to devise a climate change level. The answer is simple: do not drop litter and do not leave the dog dirt behind. The ordinary person may feel that large, pollution-type issues, such as reaching Kyoto targets, are beyond their grasp and must be left to Government, but litter control is something which we can all understand and share in—and yet we do not.
  The culture in the UK is that we live and walk around in our own litter until it is cleared up. That bad habit is acquired early. In all my years as a teacher, children told me that they cared about the environment. They wanted to save the whale and protect the ozone layer, but they dropped litter all over the school grounds. Despite the efforts of teachers, school playgrounds must be the most littered places in the country, although litter is everywhere.
  The current approach—national and local—concentrates on paying to have litter cleared up afterwards. People judge councils by how well they keep the streets clean. People expect litter to be cleared, and many councils do a relatively good job, but it costs the taxpayer about £400 million a year. That figure is based on an estimate from the Department of the Environment, Transport and the Regions of £323 million in 1996, which did not include parks, beaches, special events and fly-tipping recovery. Waveney district council spends £470,000 a year just clearing up mess.

  849
  Why do we not change course to concentrate more on prevention than on clearing up? Why not stop people dropping litter and leaving dog dirt behind? There has been recent legislation. Part IV of the Environmental Protection Act 1990 concentrates mainly on clearing up the mess, placing duties on councils to ensure that their land is clear, to designate control areas, to set standards and to put up litter control notices on places such as takeaway food outlets. I read recently that the Government plan to plug some of the gaps in the Act by making Railtrack and other railway companies responsible for clearing railway lines. However, this approach resembles the legend of Sisyphus, rolling a rock for ever up the hill. When it comes to clearing litter, we never completely succeed.
  The 1990 Act went further by introducing fixed penalty fines of £25 that could be levied by authorised council officers, a recognition that prevention and deterrence had to be applied. Similarly, and for the first time, the Dogs (Fouling of Land) Act 1996 put dog fouling on the same basis as litter on designated land. It also introduced fixed penalty fines.
  Dropping litter and failing to clean up after a dog are offences. There is a fixed penalty system of enforcement. However, the record of the application of the law is interesting. In 1996, there were 626 prosecutions under the 1990 Act, resulting in 468 convictions. The following year, there were 505 prosecutions, and 352 convictions. In 1997–98, 297 fixed penalty fines were paid. That makes just a few hundred cases in a country of 56 million people. I do not believe that that is because not much litter is dropped. The laws are not being enforced, and there is evidence of a worsening situation. In 1990, there were 2,543 prosecutions, leading to 2,212 convictions.
  The point is that there are few convictions. In Suffolk in 1995, there were only six convictions from the seven cases taken to court. In 1996, there were five convictions from seven cases. Those figures do not mean that Suffolk is litter free. In the Waveney district council area, there have been no recent prosecutions and no fixed penalties for litter. There has been just one fixed penalty for dog fouling.
  Why is the law not enforced? What have councils done to respond to the 1996 Act? A Tidy Britain Group survey showed that 40 per cent. of councils have adopted it, and half of them have adopted fixed penalty fines. Ninety eight per cent. of councils have appointed dog wardens, but, in most cases, those amount to one or two people. Only 47 out of 474 councils employ litter wardens—again, I suspect that those consist of only one or two people. They are meant to deal with millions of litter droppers and the 6.9 million dogs in 5.38 million households that produce 1,000 tonnes of faeces daily, which I am told that half the dog owners never clear up.
  When we bear in mind the fact that litter and dog wardens are involved in other activities, such as campaigns, education drives, poop-scoop promotions and so forth, it is clear that the resources are scarce to enforce the laws. That is why the laws are not working. The fixed penalties are not being used and, at a cost of £500 per prosecution, the number of prosecutions is falling.
  People say that they are very concerned about litter and dog fouling. Surveys show that to be the case time and again. The Tidy Britain Group survey, which compared the people's attitudes to local environmental quality
  850
  issues, put dog fouling at the top of the list with 80 per cent. and littered streets at 60 per cent. If we compare that with poor street lighting at 37 per cent., and broken pavements at 33 per cent., we see that people want something done.
  When I was a member of my local council, we conducted an extensive survey of residents. Litter and dog fouling were at the top of the list of complaints and issues that people wanted more done about, yet the mountain of litter to be cleared up remains as large as ever.
  We have had campaigns for as long as I can remember. I can remember the "Keep Britain Tidy" campaign when I was a small boy, and I can still see the logo in my mind. Now, we have more bins than ever before throughout the country. The sad conclusion is that when it comes to litter, education does not appear to work—and I say that as an ex-teacher.
  When I was leader of my local council, I went out one morning with a team that clears up Lowestoft beach in the summer. We went out at 5.30 am and I found out what a back-breaking job it is to clear the beach. People come there because it is a blue-flag beach—a clean beach. According to the English tourist board, it is the best beach in England. I asked the cleaners whether people were dropping less litter and respecting the beach. The answer was no—people were dropping even more.
  We have to concentrate on enforcement against those who drop litter. We must adopt the principle that is applied to other forms of pollution, which is to make the polluter pay. The problem is that councils do not have the resources to do so. We must allow councils to keep the revenue from fines or have the Treasury return it to them to be ring-fenced within councils for enforcement purposes. Then councils would use the fines to employ more litter and dog wardens, who would enforce the law against the polluters. We would change the culture of the country in a relatively short time.
  Two problems are usually cited when I suggest that idea. First, I am told that it is a case of the perverse incentive and that a council should have no pecuniary interest in prosecution or giving a fixed penalty. That is a narrow legal view, which is not shared by the people at large. The council, as the community's representative, should have every incentive to bear down and drive out that anti-social activity. It is perverse that we tolerate the present situation. We have a law that is not enforced and councils without the resources, and the police, probably understandably, feel that they have more serious matters than litter on which to concentrate. Constituents tell me of police who walk past when people are seen dropping litter.
  There are precedents for councils being allowed to use revenue from fines for enforcement. Councils regularly enforce and keep the penalty receipts from people who default on paying car park fees. We have residents' on-street parking in my constituency. The council uses the fines from that to finance the officers who enforce it. A few months ago, it was seriously suggested that the revenue from speeding fines should be used to set up more speed cameras, which were the reason people were caught and fined in the first place. We should go that way with litter.
  Secondly, people ask whether the suggested approach would work. Would people who were not police officers be able to accost litter louts? Would litter louts pay up?

  851
  It is already happening. People are paying fixed penalty fines, but it is not happening on a large enough scale. The main areas affected—the town centres—often have closed circuit television cameras. I am told that when people are caught on CCTV committing other offences, the police have only to tell them that they have been caught on camera for them to admit their guilt. That would happen with dog fouling. If wardens confronted offenders and said, "I saw you drop that litter or fail to pick up that dog dirt and you have been caught on camera," those people would admit it. They would rather pay a fixed penalty fine than risk going to court to face camera evidence and the maximum fine of £2,500. Such a system would quickly change our culture. If people knew that they would be caught, the overwhelming majority would not drop litter. I draw comparisons with the laws on seat belts and crash helmets, which were the subjects of long campaigns with limited success before real laws were adopted and enforced.
  I am pleased that the Government have today published the document "A Better Quality of Life". It sets out principles, including making the polluter pay, the enforcement of regulations and the improvement of local surroundings. The section on local environmental quality refers to litter and states:
  "Poor local environmental quality can detract from town and city living in particular".
  Litter contributes to that. Zero tolerance of such offences can send the right signals to criminals and help fight crime in general. It is important that we take the fight against litter seriously.
  Recycling fines would cost the Government virtually nothing. The Government get little income because there are few fines. If we overcame the litter problem, we could use the bulk of the £400 million that we spend on clearing up on more worthwhile and constructive services. If we were prepared to take this strong step, it would be popular. Litter will continue to blight our environment and cost us money as long as we permit it. Let us get serious and make the polluters and litter droppers and those who allow their dogs to foul the streets pay. Let us enforce the law of the land properly.
  5.13 am
  The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Alan Meale): Mr. Deputy Speaker, thank you for doing your duty. We often forget that people such as you are here until the end of the day. I thank also the Labour Members, and the hon. Member for Colchester (Mr. Russell), who have stayed beyond the call of duty.
  I congratulate my hon. Friend the Member for Waveney (Mr. Blizzard) on securing this debate on the enforcement of anti-litter laws. I am pleased to respond on an issue that should concern everyone. It is commonly held that we are a messy nation and that there is far too much unsightly litter blowing around the streets of Britain. While the annual cleanliness index compiled by the Tidy Britain Group has shown a year-on-year reduction in the amount of litter in our streets, my departmental postbag confirms that many people are still concerned about what remains and want something done about it.
  The amount of litter in the streets may not be due to a lack of legislation or local authority action through cleansing regimes. All local authorities take these duties
  852
  seriously, as my hon. Friend said. He has considerable knowledge of the subject, particularly as an ex-leader of Waveney district council.
  Only today, Newham council has announced a borough-wide series of new and co-ordinated initiatives aimed at improving the environment and, of course, raising awareness. As part of that initiative, the borough will begin to target particular areas to tackle a variety of local environmental problems, including litter. On a lesser scale, some local authorities may wish to take the opportunity to provide thoughtfully sited bins as part of their anti-litter strategy, and to use imaginative and innovative designs. That is sensible when we consider the many innovative designs that are available.
  It is important to educate people, and particularly the young. It often amazes me when I see litter bin designs that have been around for many years, which clearly do not do their job. Litter blows out of them throughout the countryside, and especially around parks and town centres. We have not yet tried to use innovative designs that will attract children to use litter bins, although areas of the United States have gone down that path with much success. In this country there has been basic recycling education, especially with regard to bottles and tin cans. That has captured the imagination, particularly of young people.
  I am glad to say that bins for cigarette smokers have been introduced outside the Department of the Environment, Transport and the Regions. In many continental countries, ash stub areas are placed within litter bins so that people are encouraged to extinguish their cigarettes in litter bins rather than stamp them out in the streets. Sometimes the great design techniques that we have in this country do not lead to designs that might be incorporated in standard designs to try to educate people.
  On the positive side, I am informed that local authorities in England spent more than £330 million in 1997–98 on their street cleaning and litter responsibilities, and that the budget for 1998–99 was even larger. When they are spending such sums in future they might consider corporate design or even competition among school children to try to encourage young people to be educated in litter awareness.
  Mr. Bob Russell: May I put to the Minister a suggestion that I have put to the Colchester local authority with regard to hot food takeaway establishments? I know that they are not responsible for what their customers do with the packaging, but does the hon. Gentleman agree that if these establishments formed their own litter patrols, covering about a 100 yd radius outside their premises, that would go a long way to reducing the amount of litter that is left for local authorities to pick up? There is also the curse of chewing gum, which disfigures many of our pavements.
  Mr. Meale: The hon. Gentleman is right. I hope to deal with such points later in my remarks.
  The simple truth is that much of the litter on the streets should not have been dropped or allowed to remain in the first place, and there is legislation to deal with these matters. That legislation can be split into two distinct parts. There is the enforcement of anti-litter laws as they apply to those who drop litter, and the enforcement of legislation that requires litter authorities to keep their areas reasonably free of litter.

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  As my hon. Friend knows, it is already an offence to throw down and leave anything so as to cause, or contribute to, the defacement of any public place by litter. The term "litter" has a wide interpretation which can include such things as cigarette butts and, as the hon. Member for Colchester said, chewing gum. The law therefore deals with what is done with the thing rather than what it is.
  It is a common belief that no one is ever prosecuted for dropping litter. That is clearly not the case. The police and local authorities may and do bring prosecutions, which are heard in magistrates courts. Members of the public may report offences to the police or their local authority, who will decide whether legal action is appropriate. In 1997–98 there were 505 prosecutions for the dropping of litter, of which 352 were successful, with an average fine of £115. All police cases were dealt with by the Crown Prosecution Service, which decided whether a case was sound, whether it was in the public interest and whether it was a proper use of public funds. However, even a straightforward case costs between £500 and £800 to bring to court, so for each case there is considerable pressure on the public purse.
  Local authorities may prosecute their own cases or appoint authorised officers who can issue fixed penalty fines to anyone who they have reason to believe has committed an offence. Those fines were increased to £25 in 1997, and 650 fines were collected in 1998–99.
  Because of the scale of the problem in certain areas, and the fact that the police deal with other priorities, many people ask why there are not more litter wardens on our streets. My answer is simple—decisions to appoint litter wardens are left to the discretion of local authorities in the light of local priorities and resources. It is left to them to decide whether litter may be more efficiently tackled in other ways, such as education and increased cleansing.
  I disagree with my hon. Friend's assertion that the argument for education has largely been lost. Other countries have a better record in educating their population. One example that I would cite is Cyprus, where young people of all ages at all schools are responsible for a portion of the beach in their area. Every school child participates in collecting the litter on that part of the beach throughout the year. A sum of money is paid by the Government to the school for that activity. It certainly educates the children of Cyprus to a high degree. The areas where mainly resident Cypriots live are very tidy. The tourist resorts bring 2.5 million tourists a year to that wonderful country, including 1.9 million from Britain. It is the tourists who are responsible for most of the litter.
  Despite the perceptions of some members of the British public, almost a quarter of local authorities have already appointed wardens, and I would encourage more to do so. One of the reasons given by local authorities for not employing litter wardens is that the fines that they collect, which substitute for fines in the courts, are returned to the Exchequer. I know that my hon. Friend knows something about that, as he has frequently raised concerns about the matter with my Department.
  I accept that keeping the fines may prove an incentive to local authorities. I can inform the House that my Department is in discussion with the Treasury on the issue of hypothecation of the litter fines and also those for dog fouling. I know of my hon. Friend's knowledge of the
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  subject, if only because of the numerous questions that he puts to the Office for National Statistics. As with litter, local authorities have a duty to keep public land clear of dog faeces. Furthermore, allowing a dog to foul may be an offence if the local authority has a byelaw against fouling or if the land has been designated under the Dogs (Fouling of Land) Act 1996.
  The maximum fines are much heavier in such cases—£500 and £1,000 respectively. The 1996 Act allows local authorities to appoint officers who can issue £25 fixed penalties for fouling offences. Almost 300 fixed penalty fines were issued in 1997–98.
  With regard to litter, local authorities may take matters into their own hands if the problem is caused not by individuals, but by larger concerns—a problem to which the hon. Member for Colchester referred. In that respect, they may issue a street litter control notice to the occupiers of premises to prevent the accumulation of litter and refuse in and around any street or open land adjacent to any street. The types of premises, which are described by an order made by the Secretary of State, can be commercial or retail premises such as cinemas, theatres or fast-food outlets.
  A street litter control notice specifies an area of open land that adjoins or is in the vicinity of the premises and makes reasonable requirements for the clearing of litter or refuse on it. The definitions for the street litter control notices were broadened in 1997 to include betting shops and lottery outlets—presumably that was an expression of the number of losing punts—and in 1997–98 nearly 70 notices were issued by local authorities.
  Failing to comply with a requirement of the notice may result in a court order being made and a subsequent maximum fine of £2,500. Local authorities may also designate certain types of land as litter control areas, such as markets, industrial estates and sports arenas if they are of the opinion that the state of the land is likely to be detrimental to local amenities. My hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) is sitting on the Front Bench. He is an ex-leader of Sheffield city council and was fully aware of the need to control littering in and around the sporting arenas of which that fine city has so many. I see the smile on the face of the hon. Member for Colchester.
  Designating land a litter control area places a duty on the occupier to ensure that it is, so far as is practicable, kept clear of litter and refuse. Failure to comply with a litter control area order can result in substantial fines. I said earlier that there is also a mechanism to ensure that local authorities carry out their responsibilities. The Environmental Protection Act 1990 permits any person to make a complaint to a magistrates court on the ground that he is aggrieved by the defacement of land by litter or refuse.
  Proceedings may then be brought against any person under a duty to keep land clear of litter —
  The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-seven minutes past Five o'clock.