Commons Sitting of 6 July 2000

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRIVATE BUSINESS

  MERSEY TUNNELS BILL (By ORDER)
  Order for Second Reading read.
  To be read a Second time on Thursday 13 July.

Oral Answers to Questions
  EDUCATION AND EMPLOYMENT
  The Secretary of State was asked—
  EDUCATION AND EMPLOYMENT

    Further Education
    Mr. David Ruffley: If he will make a statement on the funding of further education. [127920]
    The Secretary of State for Education and Employment (Mr. David Blunkett): I announced last November that there would be an additional £365 million for the further education sector next year. That is a real-terms increase of 7.7 per cent., the largest single increase that the further education sector has ever received. It will bring the total to £3.9 billion.
    Mr. Ruffley: Is the Secretary of State aware of the grave concern of many FE colleges, including my own, the West Suffolk college in Bury St. Edmunds, which feel badly let down by the performance of the Further Education Funding Council this year? Is the right hon. Gentleman aware that many colleges have not yet even received clear indicative allocations of their basic funding? Is he aware that agreements relating to Learn Direct, adult growth programmes and the standards fund have not yet been completed in advance of the new financial year in August?
    When will the Secretary of State get a grip? Will he undertake to make sure that the Learning and Skills Council that is to take over from the FEFC performs better and behaves in an efficient manner, so that FE colleges are not subjected to the delays and confusion which are marring further education at present?
    Mr. Blunkett: I shall certainly make sure that the Learning and Skills Council acts effectively to pull together the further education and training and enterprise funding and to deliver it with high quality and effective management. We are pleased that Bryan Sanderson has
    404
    agreed to be the chair of the new Learning and Skills Council and that Nick Reilly, the managing director of Vauxhall, has agreed to be the new chairman of the adult learning inspectorate. I am certain that, between them, they will ensure that the quality and improvements that we seek will be achieved. If there is a particular problem at Bury St. Edmunds, I shall be happy to look into it with my colleagues and to make sure that the college gets the information that it needs.
    Mr. Barry Sheerman: May I inform my right hon. Friend that many of the FE colleges that I visit as Chairman of the Select Committee tell me that the Government have indeed got a grip on funding? There are still some complaints about efficiency savings and the need to find another 1 per cent. this year to pay for the pay rises, so it is not all sweetness and light in the FE sector, but there is a widespread feeling that we are moving in the right direction. I rarely agree with the hon. Member for Bury St. Edmunds (Mr. Ruffley), but is my right hon. Friend aware that serious concern has been expressed about the running of the FEFC? I, too, welcome the appointment of Bryan Sanderson and, perhaps, the start of a new page in the history of further education, which the Government have initiated.
    Mr. Blunkett: We have had a proud record of avoiding some of the difficulties inherent in parts of the private sector with regard to training in further education, but as my hon. Friend knows, we have taken draconian steps to tackle inefficiency and the quality of provision in colleges. We are pleased that this year we have managed to get 45 colleges out of category C in relation to their financial management. That is an important achievement, but there is much still to do. That is why we have been rigorous in tackling failure wherever it occurs.
    Mr. Tim Boswell: Although any increase in funding is welcome—provided that it is a real increase, not a smoke-and-mirrors type of increase—there is still concern in further education colleges because they cannot pay lecturers competitive rates, particularly in market-related sectors such as business and computing. It is extremely difficult for them to recruit and deliver in those areas. Can the Secretary of State explain to the House why, despite his claims to have a grip on the situation, and his projections of a rapid increase of 700,000 in further education enrolments over two years, the actual turnout can best be described as flat-lining on a base, and is in fact genteelly declining under his stewardship?
    Mr. Blunkett: It was the Conservatives who did away with demand-led expenditure, which led to a dramatic fall in the number of students recruited to further education. We have—we make no apology for this—combed out the inappropriate franchising, which led to what can only be described as a complete fiddle of the numbers in further education. The 1 per cent. drop in full-time equivalent students will be reversed as we put £240 million next year into improving and increasing access.
    The measure of what we are doing is our commitment to the standards taskforce agenda, which is about a massive expansion in the sector, but also underlining it with quality. We have a challenge: to meet the skills needs of tomorrow. When I speak this afternoon at the skills

    405
    festival in Birmingham, I shall underpin that by giving a clear commitment to the expansion and status of vocational education, including the introduction of a vocational GCSE.
    Mr. Ian Pearson: I welcome the extra funding for further education, which is widening opportunities and participation, but will my right hon. Friend consider a quid pro quo: removing the cap on student numbers at some of our best universities providing that they agree to increased participation by those from socially disadvantaged backgrounds?
    Mr. Blunkett: We are involved with the Higher Education Funding Council in the direction of resources for next year, particularly the additional cash that will be available specifically for improving access. I welcome the steps that have been taken by Mansfield college in Oxford, and others, and we are keen specifically to target further education, tertiary and sixth form colleges, a neglected area in terms of university access, to ensure that their best students can be recruited to those universities.

    Selection
    Mr. Christopher Chope: What his policy is on selection in schools. [127921]
    The Parliamentary Under-Secretary of State for Education and Employment (Jacqui Smith): It is a matter for local parents to decide whether or not local grammar schools continue to use selective admissions. The admissions code of practice gives schools guidance on other issues and it is for the schools adjudicator to resolve disputes where they arise, including on issues of partial selection.
    Mr. Chope: That is not a very satisfactory answer from the Minister. Why is it the Government's policy to force popular schools to select pupils on the basis of whether their parents can afford to move into their catchment area? That is one of the most pernicious aspects of the Government's selection policy. Would it not be much fairer to allow school boards to decide for themselves their own admissions criteria?
    Jacqui Smith: There we have an outrider for the Leader of the Opposition's speech this week, asking us to create a sort of free-for-all in admissions policies—presumably that would be what the Opposition wants—which would presumably also apply to primary schools, whose governing bodies would also have the right to select. Are we now to see the nightmare vision of primary moderns in our system—not just a return to the 11-plus, but a 4-plus for our children?
    Mr. Christopher Leslie: Is my hon. Friend aware that, following the interview by the shadow Education Secretary on Channel 4's "Powerhouse" yesterday, many schools in my constituency are extremely worried, particularly primary schools, that they will have to consider selection by academic ability, and that many
    406
    of them will be left as part of a second-rate tier of schools? What on earth can we do to avoid that threat posed by the Conservative proposals?
    Jacqui Smith: My hon. Friend raises a matter of considerable concern among parents. It is important that we continue with the planned situation, which gives parents the chance, where possible, to choose, but also, through the admissions forum, provides much more certainty about what will happen. The key point about our proposals, by contrast with those of the Opposition, is that it is not possible to allow both parents and schools to choose. Our emphasis is that, wherever possible, parents need to be able to express a preference, not that schools should have the right to weed out children whom they do not want, thereby depriving parents of their choices.
    Mr. John Bercow: Given that the hon. Lady is in review mode, will she confirm one thing that she will not do and three things that she will? Will she promise to do nothing to make it easier to abolish a grammar school, promise to limit petitions to one every five years, promise to allow grammar school parents the right to vote in all ballots, and promise to adopt the Conservative policy of making every school a free school—free to select its pupils, free to choose its term times, free to manage its budget, free to arrange its transport, free to enforce its discipline and free to run its own affairs?
    Jacqui Smith: I think that I lost count of the questions as we went through them. The key matter is that we made it clear that, where grammar schools exist, parents will decide the future of their selective admission arrangements. We have extensively debated concerns about balloting arrangements. We have no plans to review the threshold. We have no plans to take away the right of parents to decide on the future of selective admission arrangements, which is what the Opposition's proposals would do.

    Access Funds
    Mr. Paul Goggins: If he will make a statement on access funds in further education. [127922]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): Access funds provide help with transport, course and living costs. They are available to students of 16 and over in schools and colleges. Access funds have been increased from £9 million in 1997–98 to £63 million this year.
    Mr. Goggins: I thank my hon. Friend for his answer. At City college, Manchester, where I am a member of the governing body, access funds increased from £96,000 two years ago to more than £700,000 in the current year. I warmly welcome the Government's strong commitment to extending student support and widening participation; but what action is my hon. Friend taking to ensure that further education colleges are held firmly to account for the way in which they distribute the new funds?
    Mr. Wicks: That is an important point. As the fund increases, we need to be rigorous about its allocation.

    407
    The National Audit Office has considered arrangements centrally and has found them to be acceptable. Our departmental auditors are working with the Further Education Funding Council to ensure that arrangements for managing and allocating funds at college level—considerable funds, now—are robust. As with any social security system, if I may put it that way, we must ensure that those in need get these funds and not those who know how to work the system.
    Miss Anne McIntosh: Does the Minister share my concern at the cut in Government spending on further and higher education by removing student grants? Will he apologise to those students who are now not able to go into further and higher education? Will he apologise also for failing to meet the Government's pledge of increasing expenditure on education as a proportion of GDP?
    Mr. Wicks: I would share the hon. Lady's concern if for one moment what she suggests were true. We are proud that we have introduced record funding for further education and extra funding for university education. It is important in both sectors that we enable more of our young people, and older citizens, too, to benefit from further and higher education, and that we do not sacrifice quality when we go for quantity. That is what we are doing, and that is our policy.

    Foundation Degrees
    Mr. Keith Darvill: If he will make a statement on foundation degrees. [127923]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): Foundation degrees will offer a new vocationally focused route into higher education and employment. They will equip students with the specialist technical knowledge and employability skills needed in our new economy and contribute to wider participation by attracting many people who do not enter higher education.
    Mr. Darvill: I am grateful for that reply. Does my hon. Friend agree that foundation degrees provide an excellent opportunity to link higher education and employers more effectively so that we can meet the new high levels of skills needs? Does he agree also that it is typical of the Opposition's contempt for vocational learning that they oppose foundation degrees?
    Mr. Wicks: One of the great challenges for the Government is achieving a better interface and overlap between the academic and the vocational. The foundation degree is part of that strategy. The skills taskforce has told us that we are short of people at associate professional and technician level. The foundation degree will be an attractive route for many people, some of whom will have completed modern apprenticeships to get into university.
    Mr. Phil Willis: We strongly support the foundation degree principle and its vocational basis. There is a niche in the market for such a degree. However, there is an inconsistency in the Government's thinking, in that the funding will be provided by the Higher Education Funding Council rather
    408
    than the Learning and Skills Council. Is it not a slight on our further education colleges that they cannot bid directly to run foundation degrees, which would form part of their core market? The ability to bid directly would be preferable to depending on crumbs from the rich man's table to deliver the programmes. When the Minister and the Secretary of State attend the festival in Birmingham today, will they review the position and try to ensure that there is a seamless progression between further education and higher education, to avoid creating needless barriers?
    Mr. Wicks: As the hon. Gentleman knows, many further education institutions provide higher education through partnerships with universities. We expect them to play a role in future. The hon. Gentleman also knows that we are keen to establish close links between the university sector nationally and the new Learning and Skills Council. We shall do that. Even more importantly, we need to build on relationships between universities and the wider community. That means close links with local learning and skills councils.

    Specialist Schools
    Mrs. Betty Williams: What plans the Government have to extend the specialist schools programme. [127924]
    The Secretary of State for Education and Employment (Mr. David Blunkett): With the additional 55 specialist schools that were announced on 20 June, there will be a total of 534 such schools by September. That compares with the 181 specialist schools that we inherited in 1997. We have, of course, altered the funding to ensure collaboration with the cluster of schools in the area, and developed the programme so that it reaches out into the local community.
    Mrs. Williams: I thank my right hon. Friend for that answer. In view of proposals that the Conservative party recently announced, will my right hon. Friend tell the House whether he believes that it is sensible or indeed possible to expand specialist schools without granting them targeted extra resources?
    Mr. Blunkett: Specialist schools have specific additional resources to share with neighbouring schools and to develop the core specialism on which their designation is based. If Conservative party proposals were adopted—bearing in mind that half the resources they mentioned involved double counting—and we did away with the standards fund and specific resources, we would not be able to fund and match-fund the specialist school programme. As with much else that was announced on Tuesday, Conservative policy would unravel a programme that has been highly successful in raising the standard and quality of education in schools, and in contributing to the education programme in their communities.
    Mr. Patrick McLoughlin: The Secretary of State talks about opportunity for all; what has he to say to people who do not live in an area that has a specialist school?
    Mr. Blunkett: I say that, with collaboration, including the use of information and communication technology,

    409
    we are now able—and when we reach our target of 800 specialist schools in the next three years, will be even better able—to ensure that those schools reach out and provide the additional specialism in the locality where it is needed. For example, we are developing the sports college programme. Sports co-ordinators, who will work with primary and secondary schools in an area, will be attached to it to provide not only a targeted specialism, but the ability to draw in the wider community of schools and the neighbourhood, thus enabling them to develop and enjoy expertise.
    Charlotte Atkins: Is my right hon. Friend aware of the considerable success of Clough Hall technology school, which he visited some years ago, in my constituency? It has been successful not only in exam results but in other ways. I welcome the different approach to specialist schools that the Government have adopted. It means that each school has to share its resources with the community and with other schools. That contrasts with the previous Government's approach, which meant that every specialist school could take all the resources for itself, without sharing them with the community. The new approach has meant that Clough Hall shares resources with Maryhill high school, with the community, and with after-school clubs.
    Will my right hon. Friend consider joint approaches by individual schools in regard to the according of specialist status? This sharing approach—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Lady is supposed to be asking a question, not making a speech.
    Mr. Blunkett: We are happy to consider joint approaches. In fact, we have already done so, and were pleased to announce not only the joining of schools that have faced particular challenges, but the joining of schools with different emphases. There is, for instance, an interesting joint proposal for specialist status from a grammar school and a secondary modern, which will unite their endeavours to raise standards rather than divide both schools and pupils.
    Mrs. Theresa May: Yet again, the Government are changing their line on free schools. We have had spin line number five, six or seven from the Secretary of State today. The only double counting on education funding comes from this Government, who claimed that there was an extra £19 billion for schools when there was less than £6 billion.
    Does the Secretary of State accept that last year the average percentage of pupils gaining five or more GCSE grades between A and C in specialist schools improved by two thirds as much again as in other schools? Does he also accept that, of the top 100 schools in terms of GCSE results, nearly half were former grant-maintained schools and about a quarter more were church schools?
    Mr. Blunkett: Of course I accept the statistics about specialist schools. With the London school of economics and Leeds university, we sponsored the research that the hon. Lady has used. We are pleased about what has happened, because we have emphasised the need to build the confidence of teachers, and that of schools generally,
    410
    in their ability to concentrate on and subsequently develop from a specialism. That is why we are dramatically increasing the number of specialist schools.
    Let me say how pleased I am that the hon. Lady has made it here this morning. Given the bruising that she got on Tuesday's "Newsnight", and the complaint submitted by her party to the BBC that she cannot really take it, I feared that she would not turn up.
    Mrs. May: The real problem is that this Government cannot take the truth of what they are doing in education. Specialisation—a separate ethos, and freedom for schools—has been shown to raise standards to the benefit of children. Today, we see the head of a rural primary school taking a £10,000 pay cut to become a lorry driver, because he is fed up with the mountain of bureaucracy. Should not the lorry be taking away the paperwork, not the head teacher? Is it not time that the Government got off the back of schools, trusted teachers and parents, and set schools free to raise standards?
    Mr. Blunkett: Under the proposals announced by the Leader of the Opposition on Tuesday, all head teachers would have to become drivers, because under those proposals the transport provided by their authorities would be withdrawn.

    Literacy and Numeracy
    Mr. David Watts: What steps the Government have taken to improve standards of literacy and numeracy in schools. [127925]
    The Parliamentary Under-Secretary of State for Education and Employment (Jacqui Smith): The national literacy and numeracy strategies, supported this year by funding of £200 million, have transformed the quality of teaching, and raised standards in primary schools. In the 1999 key stage 2 tests, the number of 11-year-olds achieving the expected level for their age increased by six percentage points for English, and by 10 percentage points for mathematics.
    Mr. Watts: The Government's initiative in St. Helens is improving the level of attainment of most children, and is very welcome. What does my hon. Friend think would happen if we implemented the Tories' proposals, and sacked all those involved in that important initiative?
    Jacqui Smith: I, too, congratulate both the teachers and the support staff who have been involved in the raising of standards in St. Helens.
    My hon. Friend has raised an important point. Much of the success of the national literacy and numeracy strategies has been due to local support from experts in training, and teachers who have been able to promote the better teaching of reading, writing and mathematics. They have been funded through the standards fund, which was described by the Leader of the Opposition as "a gimmicky grant." I do not think that those children or the parents who are benefiting from the higher standards in our schools think that it is gimmicky to support local

    411
    education authorities and schools to teach our children to read, to write and to add up better than they did under the previous Government.
    Mr. George Stevenson: Will my hon. Friend join me in congratulating the head, the staff, the pupils and the parents at Western Coyney infants school in my constituency, which has just been awarded beacon status? They have an excellent record on literacy and numeracy. Is not that award even more commendable owing to the fact that the school does not select its pupils and is in the middle of one of the most socially and economically deprived areas in my constituency? Does it not show the success and determination of the Government in raising standards?
    Jacqui Smith: I certainly join my hon. Friend in congratulating the teachers, the children and the governors at that school, because it is clear that the standards that we are seeing in literacy and numeracy have been achieved because of the commitment and enthusiasm of teachers and of those who support them in LEAs, and by the Government's commitment to ensuring that we raise standards. The work has been done at school level and many congratulations are due to those who have done it.

    Computers for Teachers
    Mr. David Amess: What recent representations he has received about computers for teachers. [127926]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Michael Wills): We have received a significant number of representations about late payment of claims and many thank-your for the scheme, the first ever to give teachers real help to buy a computer for their own use. However, all delays are a matter of regret. As soon as I became aware that delays were taking place, we took urgent action to remove them. More than 90 per cent. of eligible claims have now been paid. The remainder will be paid in the next few days, subject only to their eligibility.
    Mr. Amess: Will the Minister now admit that the computers for schools scheme has been incompetently managed? Will he explain to my constituent, Mrs. Day, who is one of the 10 per cent. of teachers who took up the scheme, how £15 can adequately compensate her for her wait, which was five months, and for the money that she had to borrow to pay her child's university tuition fees? How much has the scheme cost? How many £15 compensation payments will he make? Will he reassure the House that the new assessment scheme, which has been taken up by 80 per cent. of teachers, will not be incompetently managed?
    Mr. Wills: I can assure the hon. Gentleman on all those points. May I go through them one by one? If he had read his correspondence, he would have the answers to most of his questions already. As he well knows, as soon as the matter was brought to my personal attention, I acted on behalf of his constituents. If he goes back to the correspondence and reads it, he will receive the answers to a lot of his questions.
    412
    I repeat our regret that there have been delays, but we have got a grip on the problem—there are no further delays. In answer to the hon. Gentleman's question about the number of payments, we are not yet in a position to tell him that. [Interruption.] The reason why we are not yet in a position to answer that question is simply that the priority, as I am sure he will agree, is to get the small minority of remaining claims paid.
    I ask Conservative Members to bear one thing in mind: it is the first ever such scheme. If I were a teacher, I would far rather wait a few weeks to get £500 from a Labour Government than 18 years to get absolutely nothing from a Tory Government.

    New Deal (Over-50s)
    Ms Hazel Blears: What assessment he has made of the effectiveness of new deal pilot schemes for people aged over 50 years. [127927]
    The Parliamentary Under-Secretary of State for Education and Employment (Ms Margaret Hodge): New deal 50-plus was widely welcomed in the nine pilot areas. A total of 1,050 people were helped into work through the package of support that it offered. More detailed evaluation findings will be published from later this month. As my hon. Friend knows, the Prime Minister launched the programme nationally in April.
    Ms Blears: I thank my hon. Friend for that reply. Is she aware that, in the Manchester and Salford city pride new deal area, we have got more than 200 people into work in the past six months? They include Mary, who had not worked for 13 years, who got a job as a sales assistant at Boots the Chemists, and whose life has changed dramatically—she has made new friends and is earning a decent income for the first time in years; and George, who is now a manager on £30,000 a year in Manchester through the new deal programme. Those opportunities would be destroyed by the Conservative party.
    We must be aware, however, that many people over 50 need extra help to get into work. Will the Government ensure that the extra support for young people to prepare them for work will also be available to people over 50 who want the chance of a fresh start and hope for the future with the Labour Government?
    Ms Hodge: The answer to the second part of my hon. Friend's question is a simple yes, we are aware of the additional requirements. The answer to the first part of the question is that I congratulate those of her constituents who have successfully found work. Since the scheme went national, every week so far, 600 people over 50 on voluntary schemes have been helped into work by the new deal 50-plus.
    Mr. Desmond Swayne: Given that there are just short of 3 million people over 50 but under retirement age who are not working, half of whom have not worked for five years, why have the Government

    413
    skewed their policy frivolously to waste resources on the new deal to so little effect, while that cohort have been denied the resources that they require?
    Ms Hodge: It is an outrage for a Conservative Member to dare to stand in the Chamber and talk about the number of over-50s out of work. In the 20 years before we came into government, the number of over-50s in work decreased from 84 per cent, in about 1979, to 66 per cent. when we came into office. That was the legacy that we inherited. The sums that we are spending on adults in the new deal overall are similar to those that we are spending on young people. We do not want to consign anyone to the dustbin of unemployment.

    Small Schools
    Mr. Michael Clapham: If he will make a statement on the small schools support fund. [127928]
    The Parliamentary Under-Secretary of State for Education and Employment (Ms Margaret Hodge): We are spending £40 million on the small schools support fund from September 2000 to 31 March 2001. We want to encourage schools to pilot new ways of working with others. I hope that the pilots will benefit schools in two ways: first, to help them to identify more efficient and cost-effective ways of working, through sharing and collaborating with others; and secondly, to raise their standards even further.
    Mr. Clapham: I thank my hon. Friend for that answer. She will be aware that between 1993 and 1997, during the Tory Administration, 450 schools closed. In my constituency, that affected the four villages of Hood Green, Hazel Head, Crane Moor and Crow Edge. Can she say how the new support system for small schools will halt the Tory trend of closing rural schools, and what types of benefits that support will bring back to the rural community?
    Ms Hodge: This Government have reduced the closure rate for rural schools from 30 to four each year. We have done that by investing in and deliberately supporting rural schools in their efforts to stay open. In my hon. Friend's local education authority, if not in his constituency, 37 nursery, primary, special and secondary schools and referral units will be supported by the small schools budget. It is up to them to find the most appropriate way of maintaining themselves, whether that is through information technology, additional staff development or the sharing of facilities.

    Access to Higher Education
    Helen Jones: What steps he is taking to improve access to higher education for students from lower socio-economic groups; and if he will make a statement. [127929]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Malcolm Wicks): Our concern is clear: all those who have ability should have access to universities, including the top ones. We are tackling that in a number of ways. Through the Higher
    414
    Education Funding Council, for example, we are providing £24 million in respect of students from disadvantaged backgrounds, which recognises the extra work in recruiting and retaining students from that group. The Higher Education Funding Council will be developing that work.
    Helen Jones: I am grateful to my hon. Friend for that reply. Does he agree that as almost 66 per cent. of students who achieve three grade As at A-level come from schools in the state sector, it is time that some of our leading universities looked seriously at the way in which they set out to attract those youngsters, and at their admissions procedures, to ensure that they are fair and really based on merit, rather than on the schools that people went to. Does he agree that it is scandalous for the Opposition to defend the privileges of the few rather than ensuring that all our youngsters have a proper chance to develop their full potential?
    Mr. Wicks: We should certainly acknowledge the fact that many comprehensive schools now enable very bright youngsters to get first-class A-level results, and we should pay tribute to the comprehensive system. We are now working with universities, including Oxford university, through summer schools and the rest, to ensure that children from disadvantaged backgrounds have access to university. As for the Opposition, by their interests they shall be judged. Today they have spoken about selection, grammar schools and elitism. Our interests are rather different. We are concerned with all children, all schools and fair access to universities.
    Mr. Nick St. Aubyn: It was the Chancellor of the Exchequer who spoke about elitism in universities. That was his obsession and no one else's. What has the Minister to say about the evidence that the vice-chancellor of Oxford university gave the Select Committee on Education and Employment yesterday, when he said that the Chancellor's attack was ill informed and might have damaged Oxford's efforts to attract the greatest possible number of the brightest and best, wherever they come from?
    Mr. Wicks: Oxford university's own working paper on the subject many months ago recognised the problem that, for different reasons, many able boys and girls from state schools, who have good A-levels, are not getting into our top universities. Now, instead of just having a row about it, we must move on to remedy the situation, and that is what we are doing. I predict that in future more able boys and girls from state schools will go to our top universities. That will be the test, and I am confident that we will succeed.
    Valerie Davey: Does my hon. Friend agree that the Chancellor's introduction of education maintenance allowances for 16 to 18-year-olds will probably be the best legacy of this Government's first term, as it will enable more young people from lower socio-economic groups to get into university? Will the Department encourage the Treasury to extend that scheme universally?
    Mr. Wicks: Yes. We thank the Chancellor for many things, not least for funding the education maintenance

    415
    allowance schemes. The schemes are already successful and more people from disadvantaged backgrounds are staying on in further education after the age of 16. That will help us to ensure that those bright boys and girls have a fair chance of getting into university. We are motivated by the values of equality; the lot opposite are more concerned about elitism.
    Dr. Evan Harris: Is the Minister aware of evidence given to the Select Committee by the Universities and Colleges Admission Service, the Higher Education Funding Council, the Sutton trust, the Independent Schools Association and universities, suggesting that a barrier that prevents people from less well represented areas and poorer backgrounds from applying to universities is fear of debt? Can he explain to the House how the removal of maintenance grants from the poorest students helps them to access higher education? Is not the student support scheme that he introduced making students from poorer backgrounds still poorer, and will that not be the legacy of this Government that people remember?
    Mr. Wicks: I think that the answer to that long question is no. We are introducing opportunity bursaries so that students from poor backgrounds have an opportunity to go to university; 40 per cent. of university students do not pay tuition fees, and the number will increase. The student finance system is fair. We are increasing the number of our young people who go to university, while maintaining quality. Under the previous Administration, unit funding per student declined. We will not tolerate that. We are maintaining quality as well as quantity. There was a time when the Liberal party attacked elitism rather than defending it.

    Plessington Catholic High School
    Mr. Ben Chapman: If he will make a statement on the community learning centre being established at Plessington catholic high school technology college. [127930]
    The Parliamentary Under-Secretary of State for Education and Employment (Jacqui Smith): Plessington Catholic high school will become a beacon school in September 2000. It has submitted an expression of interest under the Government's ICT learning centres initiative. The Government office for the north west will work with the school and give it a preliminary assessment by the end of July, so that it can work up a full application by 6 October 2000.
    Mr. Chapman: Does my hon. Friend agree that schools such as Plessington have high standards in information technology and communication skills, which can help materially in raising standards? Will she join me in congratulating Plessington on the work it is doing in the context of the community learning sector, in partnership with business, to make those skills and technologies available to people who would not previously have had access to them?
    Jacqui Smith: Yes; I am especially pleased that Plessington school will benefit from the beacon schools initiative, which will give it some £32,000 a year on
    416
    average to share its expertise, which lies especially in using information and communication technology to improve learning, and will also give it the opportunity—as my hon. Friend points out—to work imaginatively with local businesses to ensure that they can deliver locally the national objective of sharing good practice between schools and opening up opportunities in our communities through the use of information and communication technology, for the widest possible learning to take place.

    Class Sizes
    Mr. James Gray: If he will make a statement on the average size of secondary school classes. [127931]
    The Parliamentary Under-Secretary of State for Education and Employment (Jacqui Smith): The average size of classes in secondary schools is 22.0—[HON. MEMBERS: "That is 22."]—about five lower than in primary schools. If head teachers spent the extra funding that they received in the Budget on teachers, the pupil-teacher ratio could be reduced by 0.4. In addition, since January 1998 we have already reduced by 300,000 the number of children in infant classes of more than 30 pupils.
    Mr. Gray: Will the Minister join me in congratulating the excellent Wootton Bassett comprehensive school in my constituency, which came top of the A-level league tables last year, and is just about to start a new PFI scheme for a new school, brought in by the Conservative-controlled Wiltshire county council? Will she also admit to an error in her answer? The average class size today is 22.02, not 22.0, as she said. The figure of 22.0 applied last year. Will she agree that that compares disgracefully with the 21.66 average class size when the Government came to power? They committed themselves to reducing the average class size, but it has gone up, which is making it more difficult for ordinary comprehensive schools across England to compete with Wootton Bassett.
    Jacqui Smith: I am always willing to congratulate schools on achieving high standards, and I am willing to do so today—but the hon. Gentleman is wrong. Average class sizes have fallen and primary class sizes have fallen, but there has been a 0.1 per cent. increase in secondary class sizes in the past year. That is a trend that has been going on since 1988. As I have already pointed out, we are delivering on our pledge, which was to reduce class sizes for five, six and seven-year-olds—a pledge that means 12,000 additional places in popular schools and £5.8 million for Wiltshire to support that initiative. We said that we would do that, and we are delivering.
    Of course, the situation in secondary schools is slightly different. Head teachers should be allowed to use the extra money that we are putting into secondary schools and decide how they organise their classes. I am sure that if he visits secondary and primary schools, the hon. Gentleman understands that. We pledged to reduce primary class sizes and we are doing that—and we are reducing class sizes overall as well.
    Mr. James Clappison: Would not the class size pledge have been seen in a different light in 1997 if it had been known that while some class sizes

    417
    would go down, others would go up? Is not the plain fact—irrespective of the Minister's selective use of statistics—that class sizes today are higher for seven to 11-year-olds, and for secondary schoolchildren, than they were in 1997? If we include all schools, as we were invited to do by the Under-Secretary of State, the hon. Member for Croydon, North (Mr. Wicks), the pupil-teacher ratio is the same as it was in 1997. In three years the Government have delivered nothing. We have had three years of all spin and no substance. If we look at the whole picture, we see that the Government have failed to deliver.
    Jacqui Smith: The hon. Gentleman is wrong. In the past year, average class sizes have fallen for key stages 1 and 2, in primary schools, and overall. We have to judge the matter in the light of the Leader of the Opposition's pledge to do away with other "gimmicky" money—the money that we are putting in to reduce class sizes for children aged five, six and seven. We said at the election that we would do that, and we are delivering on that pledge. The Tories would take that money away if they ever got into power.

    New Deal
    Mr. Graham Brady: What assessment he has made of the effectiveness of the new deal programme. [127932]
    The Minister for Employment, Welfare to Work and Equal Opportunities (Ms Tessa Jowell): The new deal is one of the most comprehensively evaluated programmes ever. We have used the evidence to help us develop our strategy for continuously improving the new deal, and to build on its success still further. I announced further measures to achieve that earlier this week.
    Mr. Brady: I thank the Minister for her reply, light on detail though it was. She will recall that she told the Select Committee on Education and Employment on 17 May that the new deal for young people had so far cost the taxpayer £611 million. She said that that equated to a cost of just under £4,000 per job created. Will she confirm that she arrived at that figure only by including some jobs that lasted for less than a day, and others that lasted for less than 13 weeks? Did she not also include jobs that are subsidised, and choose to disregard the Government's own estimate that 60 per cent. of people going into jobs through the new deal would have got those jobs in any case?
    Taking all those matters into account, will she confirm that the true figure is closer to £11,000 per sustained, unsubsidised job? Will she at least accept that the true cost is much higher than £4,000 per job, if the 60 per cent. dead weight is taken into account?
    Ms Jowell: I would like to offer the hon. Gentleman one of the numeracy classes that we announced this week would be available for young people entering the new deal. The Tories seem to have taken an incomplete lesson from Mark Twain, who said:
    Get your facts first, and then you can distort them as you please.
    418
    What are the facts about the new deal? It is a fact that by any measure, unemployment has fallen among young people and older people, with the greatest fall among the new deal client group. It is a fact that the independent National Institute of Economic and Social Research showed that the new deal has had a significant and positive impact on youth unemployment, and is close to being self-financing. It is a fact that the new deal would not exist under a Tory Government. The Tories do not want a better new deal—they want no new deal for young people.

    Literacy Tests
    Fiona Mactaggart: If he will make a statement on progress towards his target of 80 per cent. of pupils achieving level 4 in literacy tests at key stage 2. [127933]
    The Secretary of State for Education and Employment (Mr. David Blunkett): We inherited a situation in which 56 per cent. of 11-year-olds had reached the acceptable level of ability at reading and writing. Last year, we achieved 71 per cent. of children reaching level 4 at that age. We were very pleased to find an even bigger increase in the reading skills of youngsters of that age.
    We face a problem with writing skills, which I highlighted when the statistics were announced last September. We have set about that problem this year, and have recruited the help of a range of outside organisations and individuals—including the poet laureate—to inspire and encourage young people to learn to write more effectively.
    Fiona Mactaggart: I thank my right hon. Friend for that reply, and invite him to join me in congratulating the pupils and teachers of Slough. Just after I was elected, only 58 per cent. of children there were reaching level 4 and above at key stage 2, but last year the proportion had risen to 68 per cent. I am confident that the figure will continue to improve in the coming year.
    My right hon. Friend identified the teaching of writing, which has also been identified in a recent Ofsted report. It is clear that our focus on reading, given the national year of reading and the energy put into reading in the literacy hour, has delivered results, and we must focus on improving the teaching of writing. The Leader of the Opposition announced plans to cut—among all the other cuts—the number of those who are responsible for training primary teachers to deliver the teaching of writing and the literacy hour. If such a policy were implemented, could the ambitious plans to improve the quality of the teaching of writing in primary schools be delivered? If we got rid of those trainers, would we be able to reach the target—
    Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Lady is making a speech. We have heard the question.
    Mr. Blunkett: I congratulate the heads and teachers working so hard with pupils in Slough, and hope that we see substantial further improvement in the youngsters' results from the end of May. This year, through the standards fund, we are putting £200 million into the

    419
    literacy and numeracy programmes. That involves the employment of 300 co-ordinators throughout the country, working with schools on the programme and reinforcing the use of phonics, grammar and spelling. If those resources, those co-ordinators and that work with the schools were to be withdrawn, the Conservatives would take us back to the position we inherited in 1997. The previous Government evangelised and pleaded, but they did nothing to raise standards.
    Mr. David Tredinnick: Will the Secretary of State admit that the rate of improvement has been no greater during the Government's term of office than it was under the previous Government? [HON. MEMBERS: "Not true."] By how much have literacy standards at key stage 3 improved over the past two years, and by how much did they improve in the previous two years?
    Mr. Blunkett: I have just spelled out that there was a 15-point improvement in literacy, from 56 to 71 per cent. I do not recall the exact figures for the years between 1994 and 1997, but there certainly was not an improvement from 41 to 56 per cent. If there had been, we would have adopted the policy that Opposition Members were then following—which was to do sod all. [HON. MEMBERS: "Oh!"]
    Mr. Deputy Speaker: Order. I hope that the right hon. Gentleman will—
    Mr. Blunkett: I immediately apologise. That was entirely unparliamentary language, and I have corrected myself.
    Mr. Deputy Speaker: Order. I am grateful to the Secretary of State that, on prompting, he corrected himself.

    Internet
    Mr. Paul Flynn: What measures he is taking to increase knowledge of the internet among those in full-time education. [127934]
    The Parliamentary Under-Secretary of State for Education and Employment (Mr. Michael Wills): We have provided an improved and strengthened curriculum in information and communication technology, better advice to teachers—including a £230 million teacher
    420
    training programme—and an unprecedented increase in equipment and resources to schools. The pupil-computer ratio in primary schools has reduced from 1:18 to 1:13, and internet access has improved dramatically—62 per cent. of primary schools are now connected to the internet, compared with only one in six in 1997.
    Mr. Flynn: Is the internet not a wonderful new resource for those in full-time education, enabling them to research their work in greater depth and breadth than was possible using traditional means? Is it not also a marvellous new way in which those in education can publish their own creative work to a huge audience? Would it not give a marvellous impetus if the Government added to the great work that they have done in that area by holding a competition to encourage schools that produce excellent work, and publishing that work on the Department's website?
    Mr. Wills: I thank my hon. Friend. I agree that these technologies provide unprecedented opportunities for children to improve their education. We are already seeing evidence that they are driving up standards. I welcome my hon. Friend's suggestion, which will form part of our continuing review aimed at improving the national grid for learning.
    Dr. Julian Lewis: Does the Minister accept that the delivery of education via the internet is subject to the same restrictions as other forms of education so far as partisan propaganda is concerned? In particular, does he realise that the Education Act 1986, which said that politically controversial subjects must be treated even-handedly, is being blatantly disregarded by the No. 10 website? I have in my hand an internet printout of an interview in which the Minister for Europe answers questions from schoolchildren on European unification. It is totally one-sided propaganda, with no indication of the arguments against the case.
    Mr. Deputy Speaker: Order. Time is passing, and the hon. Gentleman must ask his question.
    Mr. Wills: To be honest, Mr. Deputy Speaker, I was rather lost as the hon. Gentleman put out his own propaganda. He has fundamentally missed the point of new technologies. Use of the internet to deliver the curriculum fundamentally drives up standards. That is why we are investing so much money in it. It is a shame that the hon. Gentleman does not recognise the opportunities that it offers.

Business of the House
12.30 pm
Sir George Young: May I ask the Leader of the House to give us the business for next week?
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for next week will be as follows:
MONDAY 10 JULY—Proceedings on the Consolidated Fund (Appropriation) Bill.
Consideration of Lords amendments to the Terrorism Bill.
The Chairman of Ways and Means is expected to name opposed private business for consideration at 7 o'clock.
TUESDAY 11 JULY—Consideration of a timetable motion relating to the Police (Northern Ireland) Bill.
Followed by remaining stages of the Police (Northern Ireland) Bill.
WEDNESDAY 12 JULY—Remaining stages of the Care Standards Bill [Lords].
THURSDAY 13 JULY—Opposition Day [17th Allotted Day].
Until about 4 o'clock there will be a debate entitled "Government Neglect of the Crisis in Agriculture".
Followed by a debate entitled "The Relationship between Parliament and the Executive". Both debates will arise on Opposition motions.
FRIDAY 14 JULY—Subject to further discussions through the usual channels, the House may sit to consider Government legislation.
The provisional business for the following week will be:
MONDAY 17 JULY—Consideration of Lords Amendments to the Utilities Bill.
Consideration of Lords Amendments to the Postal Services Bill,
TUESDAY 18 JULY—Progress on remaining stages of the Finance Bill.
WEDNESDAY 19 JULY—Conclusion of remaining stages of the Finance Bill.
THURSDAY 20 JULY—Consideration of Lords Amendments which may be received to the Government Resources and Accounts Bill.
FRIDAY 21 JULY—Private Members' Bills.
The House may also be asked to consider any Lords messages which may be received.
The House will also wish to know that on Wednesday 12 July there will be a debate on European Document No: 8795/00 and COM(00)268, relating to financial assistance to the Western Balkans and an unnumbered explanatory memorandum relating to the preliminary draft budget of the European Communities for 2001 in European Standing Committee B.
Details of the relevant documents will be given in the Official Report.
[Wednesday 12 July 2000:
European Standing Committee B—Relevant European Union Documents: (a) 8795/00;(b) COM(00)268, Financial assistance to the Western Balkans and revision
422
of the financial perspective. (c) Unnumbered EM submitted by HMT dated 27 June 2000, Preliminary Draft Budget 2001. Relevant European Scrutiny Committee Report: HC 23-xxiii (1999–2000).]
Sir George Young: The House is grateful for next week's business and for that indication of the following week's business.
In view of the worrying position in Northern Ireland now that troops are back on the streets, may we have an undertaking that the House will be kept informed of developments there?
The House is still owed a debate on procurement for the armed forces, which is made more urgent by today's National Audit Office report of an average four-year delay on major weapons and a £3 billion overspend. With our armed forces being asked to do more for less, that debate is urgent.
Will the Chancellor of the Exchequer make an announcement on the comprehensive spending review during the next two weeks? If so, when? The statement is as important as the Budget, and the House would welcome details of the date and confirmation that there will be a full day's debate in Government time before we rise for the summer.
Will the Leader of the House clarify the position for Friday next week? Does it require a resolution of the House if we are to sit on that day? If so, when will that resolution be taken? If the day is earmarked for the football hooligans Bill, when will the draft Bill be published? Do the Government intend to take all stages of the Bill in one day, in normal time and with a guillotine? We should certainly resist that. In view of the importance of the Bill, which we support in principle, and given the congestion in the Government's programme, would it not be better to sit beyond the planned date of rising or abandon some other piece of legislation?
Finally, can we have an early debate on the damaging proposals of the Select Committee on the Modernisation of the House of Commons, which risk further undermining and bypassing the House of Commons?
Mrs. Beckett: I undertake to draw the right hon. Gentleman's remarks to the attention of my right hon. Friend the Secretary of State for Northern Ireland. The Government endeavour to keep the House informed on such matters; I know that my right hon. Friend will want to do so, should that become necessary.
The right hon. Gentleman will know that we have accepted the fact that there will need to be a debate on defence procurement. I am not sure whether the NAO report makes that more urgent, as—if I recall the matter correctly—the NAO was looking back at the disasters in the procurement of defence equipment under the previous Government. That does not exactly suggest that dealing with the report is urgent, although I accept that it is important and will require scrutiny in the House.
I anticipate that there will be an announcement on the spending review before the recess, although I am not yet able to give the right hon. Gentleman a firm date; we shall do so as soon as possible.
The right hon. Gentleman is right to point out that a resolution would be needed, were the House to choose to sit on Friday 14 July. That would, of course, be a decision

423
for the House. He is also right to identify the fact that the possibility of such a sitting has been raised because of a possible Bill on football hooliganism. I understand that it is hoped to publish a draft Bill, or to have one available soon—perhaps tomorrow, but certainly in the quite near future. He will know that my right hon. Friend the Home Secretary has already indicated to the House that he wants to hold the widest consultation on any proposals.
As to the notion that this matter shows, in some way, confusion in the Government's programme—
Mr. Douglas Hogg: All stages?
Mrs. Beckett: That will be a matter for discussion.
As for the Government's programme, I have repeatedly reminded the right hon. Member for North-West Hampshire (Sir G. Young) that the number of Bills in train during this Session is almost identical to the number put through by the Conservative Government, in which he served, at a similar stage of the previous Session. Indeed, as one looks back over the years of Conservative Governments—especially during the 1980s—the programmes of legislation that they put through were substantially heavier than that currently being undertaken by the Labour Government.
The notion that the Government should abandon some other piece of legislation casts into sharp focus the progress of the present discussions with the Opposition on such issues. The shadow Home Secretary—not for the first time—comes to the Dispatch Box demanding that action be taken and offering Opposition co-operation, but follows that with constant back-pedalling after the discovery that they cannot deliver. That seems to be the position on the issue—it is one that we have been in on several occasions in the past. The fact that opposition commitments are given that the right hon. Lady apparently cannot substantiate is a matter for them; it certainly does not provide grounds for the Government to start ditching parts of their programme.
With regard to the proposals made by the Modernisation Committee, I cannot refute strongly enough the notion that they would in any way damage or undermine the ability of the House to scrutinise Government business. The proposals will provide a basis whereby there can be a reasonable—indeed, better—division of responsibility between Government and Opposition, because the Opposition would have more control over how the available time would be used. There is no suggestion that the time need be reduced. The proposals provide a framework in which decisions could be taken at a sensible time, and not at 3 o'clock in the morning.
Mr. Hilary Benn: As my right hon. Friend may be aware, earlier this week, a British citizen, Mr. David Chell, was sentenced to death in Malaysia on charges of drugs smuggling, which he denies. Given the Government's principled opposition to the use of the death penalty in all circumstances, could my right hon. Friend find time for a statement on the steps that the Government are taking to offer Mr. Chell support to save his life?
Mrs. Beckett: I understand the concern expressed by my hon. Friend. I fear that I cannot undertake to find time
424
for a statement on the case in the near future, although I shall certainly draw it to the attention of my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs. Foreign Office questions will be held during the week after next, by which time the position may be a little clearer. In the interim, my hon. Friend might try to raise the matter in Westminster Hall.
Mr. Paul Tyler: Does the Leader of the House recognise that the proposed football hooliganism legislation raises serious issues, and will require careful examination. Members on both sides of the House have already said that we do not want to follow the pattern of the Dangerous Dogs Act 1989 and have the dangerous yobs Act passed at such speed that we do not take all the considerations fully into account. Will the right hon. Lady give us a clear assurance that it is the Government's intention to try to obtain an agreed programme motion for the discussion of this legislation?
In that connection, may I warmly welcome the report of the Modernisation Committee and ask the Leader of the House to give appropriate credit to some of the authors of the ideas that it contains? Does she recall that it was the right hon. Member for East Devon (Sir P. Emery) who, in his capacity as Chairman of the Procedure Committee, was the pioneer of the ideas that are contained in that report?
I wonder whether the Leader of the House has also had an opportunity to read a slim little pamphlet, called "Mr. Blair's Poodle", by the hon. Member for Chichester (Mr. Tyrie), in which he promotes the very ideas for programming motions in the House to which the Modernisation Committee has now given the force of its own recommendations? Does she accept that, at long last, many members of the Conservative party recognise that the proper role of Opposition is to give effective scrutiny to the Government's legislation, rather than simply to waste time in the middle of the night?
Mrs. Beckett: I cannot recall whether the hon. Gentleman was able to be in his place for the Home Secretary's statement, but I am sure that he knows that the Home Secretary did make it plain that he understood fully and shared the view that any proposals that came forward would require to be most carefully examined. I assure the hon. Gentleman that the Government recognise that.
The hon. Gentleman asked me for an assurance that the Government would seek an agreed programme motion, and I can give him that assurance. We are seeking agreement; indeed, I would go further and say that the Government are seeking, if at all possible, to get an agreed Bill. If it is not possible to get such agreement, obviously that will call into question to what degree and at what pace such proposals can be proceeded with.
The hon. Gentleman then asked me about the issues that are raised in the Modernisation Committee report. I share his view that it is right and proper that the right hon. Member for East Devon (Sir P. Emery) should receive credit for the proposals that he has advocated over many years of a long career in the House, and that the right hon. Gentleman has argued that we should take those steps.
I am afraid that I have not as yet had time to peruse the interesting pamphlet produced by the hon. Member for Chichester (Mr. Tyrie), who, as I understand it, speaks for

425
the Conservative party from the Front Bench on constitutional matters. My hon. Friend the Parliamentary Secretary has read it, and tells me that it is much to be recommended. I look forward to reading it.
Mr. Peter L. Pike: Disregarding for a moment the sad fact that, yesterday, the Tory dinosaurs on the Modernisation Committee rejected modernisation and attempts to improve the way in which we scrutinise legislation, does not the statement that my right hon. Friend has just made with regard to the business of the House for the next fortnight highlight the fact that we really should make more use of an earlier report of the Modernisation Committee with regard to carry-over legislation? Is it not time that we moved forward to a five-year Parliament which the people elect with a rolling programme of legislation, without the need for an annual Queen's Speech and state opening of Parliament, and time that Bills should be limited and have to complete all their stages within one year of their introduction?
Mrs. Beckett: I share my hon. Friend's regret that, for the first time, it was not possible to reach more of a measure of agreement on the Modernisation Committee, but that is behind us. I am conscious, too, that it was he who, in that Committee, proposed the measures for greater use of carry-over legislation from one Session into another—of course, only by agreement—that were agreed by the Modernisation Committee in an earlier report.
The issue of a five-year rolling programme, which my hon. Friend has raised today, is a further step in that direction. It has often been considered, and may well be explored again in future, not only in this forum but among the many other bodies that from time to time consider how this place works. I am also mindful of the fact that my hon. Friend, very sensibly, has also suggested that, were Parliament to move to a wider programme, there would need to be other mechanisms to ensure that legislation did not simply drag on, as a discipline both for the House and for the Government.
Mr. Tony Baldry: The Leader of the House may know that the people of Banbury have been sending a Member to this place since the reign of Mary Tudor, and that—with the exception, I suppose, of the dark days of Charles I—never have a Government treated the House with such contempt.
We have Ministers who make statements to the media rather than to the House. The Chancellor of the Exchequer never even came to the House to announce that he was handing over to the Bank of England control of interest rates; that was something that the House learned from the media. We have a Prime Minister who has changed Prime Minister's questions from twice a week to once a week, and rarely attends the House. Now, for the Prime Minister's convenience, a book is to be placed in the Division Lobby, so that those who are too idle actually to attend the House may sign in on a Wednesday afternoon. It will be not a three-day week under this Government, but a one-day week, with the Executive treating the House and the people whom we represent with contempt.
Mrs. Beckett: I have seldom heard such nonsense, even from the hon. Gentleman. As to the suggestion that
426
the Government in some way treat the House with contempt, may I remind him, as the statistics make quite clear, that the present Prime Minister attends Prime Minister's Question Time more frequently than did his predecessor, answers more questions and deals with more issues? Indeed, Ministers under this Government make more statements in the House than did our predecessors. Those are the facts. I know that they are loathed by the Conservative party, but they are facts.
The hon. Gentleman has perhaps slightly misunderstood our proposals. Even under this Government, it will not be possible to sign to register one's views in the Lobby without actually being present.
Ms Rosie Winterton: Has my right hon. Friend received any indication from Home Office Ministers as to when draft legislation on the private security industry is to be produced and whether that draft legislation will include measures to curb the outrageous activities of cowboy wheel clampers, who cause havoc for motorists up and down the country?
Mrs. Beckett: I cannot give my hon. Friend an exact date for the publication of draft legislation. I am well aware that it is an issue on which she has long campaigned, and I share her view that such activities cause great annoyance to members of the public. I understand that it is hoped to publish a draft shortly, but I cannot give her a more precise date than that.
Sir Michael Spicer: Is the Leader of the House aware that a lobby is coming to Parliament this afternoon to protest against the Government's policy for the Defence Evaluation and Research Agency, particularly in the light of the report of the Select Committee on Defence on the subject and the effect that the policy will have on defence relations with America? Will she provide Government time soon to debate this important subject?
Mrs. Beckett: I fear that I cannot undertake to find Government time in the near future. The hon. Gentleman will know that, at this time of year, there is always considerable pressure on such time. I am conscious of the great interest that has been taken in the future of DERA, and the Select Committee on Defence has produced an interim report. I was not aware that a lobby was coming to Parliament, but I am sure that it will be received with great welcome by Members from both sides of the House.
Mr. David Winnick: May I raise with my right hon. Friend a matter that I have mentioned to her on two previous occasions—compensation for former prisoners of war of the Japanese? Is it possible for her to consult her ministerial colleagues so that a decision—obviously, we all hope that it is a favourable one—can be made before we rise for the long summer recess at the end of July? There is overwhelming support for the view that these brave people should be compensated at long last, although that should have been done by the Japanese. I hope that my right hon. Friend will urgently examine the issue.
Mrs. Beckett: As my hon. Friend quite rightly said, he has raised the issue on a number of occasions. Indeed, he has campaigned long and hard on it and I know that that

427
fact is widely recognised on both sides of the House. I fear that I cannot say to him with certainty that it is likely that an announcement will be made before the recess. He knows that the matter is receiving careful consideration, but I certainly undertake to draw his concerns and his pressure for an early announcement to my right hon. Friend the Secretary of State for Defence.
Mr. Peter Brooke: May I join my right hon. Friend the Member for North-West Hampshire (Sir G. Young), the shadow Leader of the House, in seeking to dissuade the Leader of the House from any plan to have a guillotine next Friday, because it is coincidental with Bastille day—a day devoted to the release of prisoners? The coincidence might confuse both schoolchildren and criminologists.
Mrs. Beckett: I thought that the date was familiar.
Mr. Dale Campbell-Savours: Can we have a statement on Inland Revenue inquiries into the criminal actions of the imposter who secured from the Inland Revenue private information on the personal tax files of Lord Levy? In that statement, can we be assured that all the journalists from The Sunday Times who are connected with the story have been interviewed? Can we also be assured that the Conservative party has no connection in any way with those criminal actions?
Mrs. Beckett: I share my hon. Friend's view that no one should be amused at the notion that anyone's tax affairs can be revealed simply as the result of a telephone call. Our laws do not say that, and I would have hoped that it is not what anyone in the House would expect. It is particularly remarkable that the person who obtained that information managed to do so without noticing that Lord Levy had paid—
Mr. Campbell-Savours: Millions.
Mrs. Beckett: Well, not only millions in previous years, but, as I understand from today's report, some £25,000 in corporation tax in the year in question. Apparently, that was overlooked by the people who wrote the story to which my hon. Friend referred. I am afraid I have no knowledge of whether people at The Sunday Times are being interviewed about the matter, nor, indeed, whether they have any connection with the Conservative party. I would hope that it is a matter of regret to anyone in the House that people's private tax affairs were not kept private.
Mr. Roy Beggs: I draw the attention of the Leader of the House to early-day motion 850.
[That this House welcomes the proposal announced in the Budget to lower VAT on women's sanitary products to 5 per cent. from 1st January 2001; agrees that women's sanitary products are not luxury consumer products; notes that continence products also classify as sanitary products and are not luxury consumer products; and calls on Her Majesty's Government to ensure that their definition of sanitary products will allow for the lowering of VAT to 5 per cent. on continence products, which are required, according to Government estimates in Good Practice in Continence Services, by up to 20 per cent.
428
of the female population aged under 65 years, 40 per cent. of women aged over 65 years and between 7 to 10 per cent. of men aged over 65 years.]
That early-day motion has now received the support of 113 Members, many of whom are Government Back Benchers. Does the Leader of the House agree that that level of support illustrates the concern of Members about the anomaly that will exist from January 2001, when VAT on sanitary products is reduced, rightly, to 5 per cent., while the VAT that consumers will pay on incontinence pads will stay at the standard rate? Will she ask her right hon. Friend the Chancellor to come to the House and make a statement explaining his reasoning on the matter, which, if implemented as planned, would adversely affect the quality of life of an estimated one in four women in the United Kingdom?
Mrs. Beckett: I shall draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Chancellor. The hon. Gentleman will know that one reason why Chancellors in successive Governments tend to be reluctant to make such changes is that, having made a change in one area, they are pressed to make it in another. However, the hon. Gentleman makes a valid point and, as I said, I shall certainly draw it to the attention of my right hon. Friend.
Ms Julie Morgan: I, too, congratulate my right hon. Friend on the report of the Modernisation Committee, which she chairs. If adopted by the House, the report will finally end late-night sittings, which are not conducive to the making of good legislation. I urge my right hon. Friend to have a debate on the report as soon as possible, perhaps before the recess.
Mrs. Beckett: I fear that I cannot promise my hon. Friend a debate before the recess. Indeed, that would not be necessary because, as long as the House has an opportunity to consider the matter in this Session, it has an opportunity to make its own decision as a House about whether it wishes to pursue this experiment.
I am certainly grateful for my hon. Friend's remarks, and it is important that, as a House, we use the time available to us well and effectively. Of course, although we have made repeated efforts—indeed, my hon. Friend the Member for Bolsover (Mr. Skinner) has offered to conduct seminars to educate the Opposition on how to be a good Opposition—I am afraid that they are not listening yet.
Mr. Eric Forth: Can the Leader of the House arrange an urgent debate, preferably next week, on the thinking behind the Government's priorities in their legislative programme? It would appear that the Government are about to try to force on the House and the people of this country a Bill that threatens to take away some of our most ancient and precious civil liberties on the spuriously urgent grounds that the matter must be dealt with extremely quickly and without proper scrutiny or consideration.
That contrasts with the fact that, already in this Session, the Government have given great priority to Bills such as the Sea Fishing Grants (Charges) Bill, the Fur Farming (Prohibition) Bill, the Royal Parks (Trading) Bill and the Census (Amendment) Bill, to name but four. Does that not seem very odd? Before we are asked to sign away

429
civil liberties on the basis of urgency, the House would appreciate knowing why the Government apparently gave greater priority to those other matters.
Mrs. Beckett: The right hon. Gentleman chides us for making it a legislative priority to bring forward proposals to deal with issues of hooliganism, particularly those associated with football. However, I remind him that, in theory at least, that is also the priority of his Front-Bench colleagues. They challenged the Government to introduce legislation on that point and, indeed, offered the support of the Conservative party. The right hon. Gentleman has just made it plain why their words on the matter are not worth much.
As to why the Government chose to give greater priority to the Bills that the right hon. Gentleman mentioned, I recognise that they are matters with which he apparently has some quarrel, but he should know that, in fishing communities, the need to tackle the problems that had arisen with the sea fishing grants regime was of considerable importance. That may not matter much in Bromley, but there are many parts of the UK where it matters very much indeed. Similarly, there was great concern about those who were affected by the anomalies that required correction by the Royal Parks (Trading) Bill, which received a great deal of support from other Conservative Members.
As to whether those Bills should be a priority in terms of the time that they are given in the legislative programme, I share the right hon. Gentleman's view that they are relatively minor matters, but we believe that they make necessary improvements and they have to be passed. I agree with him that they should not have detained the House for a great deal of time, but the fact that they did is entirely down to him and his colleagues.
Mr. Jeremy Corbyn: May I take the Leader of the House back to the Modernisation Committee and its proposals? When we finally get round to debating them, would she welcome amendments to bring under parliamentary control and scrutiny the operation of the royal prerogative by the Prime Minister and other Ministers, to introduce a committee to scrutinise all appointments to quangos by Ministers, and to enable the House to have some say in the appointment of members of Select Committees, rather than the current arrangement whereby the Whips decide who the members should be?
Although many of us welcome any appropriate proposals that enable the public to see and understand what is happening, Parliament has an important role in asking questions and scrutinising and controlling what the Government do. Does the Leader of the House appreciate that, in modernising, we have to move forward and make the House as democratic as legislatures in many other countries?
Mrs. Beckett: Well, no, I can confidently say that I would not welcome any of my hon. Friend's proposals, for two good and simple reasons. First, they are totally outside the remit of the report to which we are referring and do not arise from the debate. Secondly, although they
430
are obviously issues of great interest which are often discussed, ill thought out proposals would not do anybody any favours.
Miss Julie Kirkbride: Further to the questions that the right hon. Lady has already been asked about the Modernisation Committee's determination to close down the House and its democratic procedures, will she tell the House exactly how she plans to proceed with the measures? Will she be offering the House a free vote on them in this Session or the next? Will she be offering any vote on them at all, so that we will know whether they are likely to go ahead? Will she explain to my constituents how it can possibly be democratic for the House to vote only once a week on important matters that affect their lives?
Mrs. Beckett: From what the hon. Lady says, I doubt whether she has read the report. She ought to know by now that such matters are put before the House for it to decide; they are House matters and as a consequence there will be a free vote. I hope that there will be a free vote for Conservative Members as well, although I doubt it. If she is nurturing the illusion that in some way there is a diminution of democracy in the proposals, she definitely has not read the report.
Shona McIsaac: I understand that Europe is about to impose VAT on tolls in this country. Will my right hon. Friend acknowledge that that will have a devastating effect not only on people who use the Humber bridge, which already has the most expensive tolls in this country, but on those who use bridges throughout the land? The announcement is likely to be made in the recess, so will she ensure that nothing is done until we have had a statement in the next Session and, if the matter requires legislation, could she try to bury it at the bottom of the pile?
Mrs. Beckett: I freely confess to my hon. Friend that I am not aware of the time scale for such proposals, but I certainly undertake to get a reply for her from the relevant authorities. I fully understand her anxiety about the proposal and about such an extension of the operation of VAT. It strikes me that it will weaken still further the Opposition's case that we in this country face uniquely high transport charges, since so much traffic elsewhere in the European Union is on toll roads.
Mr. Michael Jack: Will the proposed football hooligan Bill be drawn widely enough to take into account other forms of anti-social behaviour abroad? Many of my constituents do not like lager louts in Benidorm performing acts of holiday hooliganism. Equally, those who have seen hooliganism on airliners might think that legislative attention should also be given to such people. Will the Bill be drawn widely enough to include those aspects as well?
Mrs. Beckett: I am not sure that even my right hon. Friend the Home Secretary could draft legislation that would deal with every kind of anti-social behaviour in all circumstances, but I understand that any legislative proposal is likely to focus particularly on those who already have convictions for violence, although not necessarily for violence previously identified as being

431
football related. That will be the key element in the Bill, but the proposals are still being considered and will be fully discussed.
Mr. Paul Flynn: When can we hold a debate entitled "What happened to the peace dividend?" so that we can draw attention to the new arms race in Europe and the world? The threat to world peace has been greatly exaggerated and countries that are still impoverished, such as the former communist states, are being urged to spend less on education, health and housing and more on arms. America is pushing a new missile race based on the absurd claim that it is terrified of the might of North Korea. There has been a peace dividend, but, as always, it has cascaded into the pockets of arms traders'—principally American arms traders—who constantly exaggerate the threat to world peace.
Mrs. Beckett: I have some sympathy with my hon. Friend's concern that countries, especially those whose finances are already under pressure, should not be encouraged to spend more than necessary on their defence, given that they have other priorities for the support of their people. Hon. Members on both sides of the House understand the concern that he expresses. With respect, however, it is easy to poke fun at the notion that the United States should be alarmed at the activities of much smaller countries, but those who have access to atomic weapons should be feared if they are likely to use them. That is the matter of concern. I understand my hon. Friend's anxiety that resources should not be misused, but equally, he, like all hon. Members, would want us to be properly defended.
Mr. Hogg: The right hon. Lady will know that many hon. Members are deeply concerned about the problems in prisons, such as overcrowding and other conditions. She will also know that there is apparently a proposal that Brixton prison should be transferred to the private sector, something of which I would approve. Will she consider holding an early debate on prisons and, perhaps more importantly, an annual debate thereafter on prisons, possibly to coincide with the annual report of the inspector of prisons?
Mrs. Beckett: I have a great deal of sympathy with the concern that the right hon. and learned Gentleman expresses about conditions in the Prison Service, and I understand his reference to the recent reports of particular anxieties in Brixton prison. That important issue needs to be aired. but I fear that the pressure is naturally heavily on dealing with Government legislation at this time of year. He will understand that from his own experience in government. I cannot undertake to find time for a debate on the Floor of the House, even on prisons. However, although this will not be welcome, I recommend the attractions of Westminster Hall, which provides a further opportunity to initiate debates and to scrutinise Government policy.
As for the right hon. and learned Gentleman's proposal for an annual debate, he attends business questions often enough to know that, if we accepted all the proposals for annual debates on subjects of great worth, we would never
432
do anything else. Some Opposition Members might welcome that, but it would not be welcome to those who want legislative change.
Mrs. Linda Gilroy: I warmly congratulate my right hon. Friend on the Modernisation Committee's proposals and those hon. Members on both sides of the House who have worked hard to introduce them. I note the response that she gave to the call from my hon. Friend the Member for Cardiff, North (Ms Morgan) for an early debate, which I would also welcome—but could that debate be held on a Tuesday or Wednesday as main business so that, in keeping with the spirit of the proposals, we introduce some of the education to which she referred, and, given that the proposals are about efficiency, so that those hon. Members who like to make efficient use of their time have the maximum opportunity to take part in that important debate?
Mrs. Beckett: I am grateful for my hon. Friend's remarks, and I am sure that all members of the Committee will be, because a considerable amount of work was done on those issues, although not all of it came to fruition. I undertake to bear her remarks in mind, although I cannot say at this point when the debate is likely to take place. However, I recognise the importance of holding that debate at suitable time.
Several hon. Members rose—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sure that we could all make more efficient use of our time if questions and answers were briefer.
Mr. Mike Hancock: Will the right hon. Lady reconsider her response to the shadow Leader of the House, the right hon. Member for North-West Hampshire (Sir G. Young), who asked about a debate on the NAO report on defence projects? There has been no debate in the House on such a report for the past decade, although when her Government came to power, they promised substantial changes. Some of the issues discussed in the report are relevant to Government action since 1997 and I believe that a debate is long overdue. Considering that what has happened can be described as bungling bureaucratic incompetence at best, or a procurement fiasco at worst, the issue should urgently be discussed by the whole House.
Mrs. Beckett: I remind the hon. Gentleman that we have a defence procurement debate every year—although obviously the report was not previously available. I accept the importance of holding such a debate, but I cannot find time for it before the recess.
Dr. Phyllis Starkey: I add my congratulations to the Modernisation Committee on its report, which I skimmed through briefly before coming to the Chamber. I regret that Conservative members of the Committee have chosen to submit their own report, even though some of them did sterling work on previous reports, and previous Conservative members of the Committee made two important recommendations, which the Committee has brought forward.
May I press my right hon. Friend on the point about the House being given the opportunity to vote on the proposals, and seek her confirmation that such an opportunity will be

433
provided this Session so that we can have a proper, efficient and effective Parliament for the next Session, which is what most of our constituents—and, I suspect, most of those of Conservative Members—desire?
Mrs. Beckett: I can assure my hon. Friend that the Government intend that the House should have an opportunity to reach a view on the proposals this Session. I share her view. I have long observed that there are those who nurture the illusion that they make sense and contribute valuably to debate in the small hours. I have never observed that to be true for the recipients.
Mr. Edward Leigh: No one would accuse the right hon. Lady of having been unconcerned about civil liberties during her long and distinguished parliamentary career, but may I put it to her—I am sure that she will agree—that a fundamental tenet of civil society is that a person should be prevented from leaving his country only after a hearing in an independent court, free of the police and the Executive? If that centuries-old freedom is to be abrogated, does she agree that it would be absurd to do so just because a football match is coming up in early September? I ask her most seriously whether we can go through our normal procedures: the production of a proper consultation document to enable the police to give their views, Second Reading of the Bill in the House, debates in Committee, consideration by the Lords and reconsideration by the House. Then we would have a Bill that we could all support.
Mrs. Beckett: The hon. Gentleman makes an important point, and I shall certainly draw his remarks to the attention of my right hon. Friend the Secretary of State. He will know that the Government do not intend to proceed other than with proper scrutiny and agreement, and when the draft Bill is published he may find that some of the points that he has raised are covered. He has made an important point and the Government are mindful of it.
Mr. John Cryer: May I press my right hon. Friend a bit further on the question raised by my hon. Friend the Member for Walsall, North (Mr. Winnick)? She will have seen early-day motion 900, on the compensation to be paid by the Manx Parliament to former prisoners of war of the Japanese.
[That this House congratulates the Tynwald for its decision to make an ex gratia payment of £10,000 to residents of the Isle of Man who were either prisoners of war or internees held by Japan during the Second World War; and calls on Her Majesty's Government to make a decision on whether it will make an equivalent payment, including widows, in the UK before this House rises for the summer adjournment.]
Will she undertake to point out to Defence Ministers that time is running short if they are to make a statement and follow the example of the Manx Parliament, as I think that they want to?
Also, when Opposition Members were asking questions, it occurred to me to ask her to remind the House who introduced the Jopling proposals—our side or theirs?
Mrs. Beckett: I take on board my hon. Friend's remarks. I note that he, too, has much pressed the claims
434
of those who were prisoners of war of the Japanese, and I undertake to draw his remarks to the attention of my right hon. Friend the Secretary of State for Defence.
With regard to the Jopling proposals, my hon. Friend is right. They were produced by an all-party Committee, which was chaired by a distinguished member of the Conservative party. The proposals were put forward. in 1991–92. My hon. Friend has correctly identified part of my own contention—that that is a direction in which the House has been moving for a considerable number of years and which, in theory, has agreement in all parts of the House. The abrogation of that understanding and agreement during this Parliament has led to the present proposals.
Mr. Stephen O'Brien: In the light of the recent publication of the Government's proposals for a national waste strategy, will the Leader of the House give an undertaking that we will have an early debate on the matter, so that applications such as the one in my constituency by Minosus to deposit toxic waste down the Winsford rock-salt mine can be taken in that context, instead of the present piecemeal approach, which could be extremely damaging for the long-term future of the environment and our people?
Mrs. Beckett: I fear that I cannot undertake to find time for a debate on that in the near future. The hon. Gentleman might find time for one in Westminster Hall, and the Department of the Environment, Transport and the Regions takes questions next week.
Helen Jackson: Will my right hon. Friend allow me to pay tribute to her important role in relation to today's Modernisation Committee report in trying to reach consensus and make that an all-party recommendation? Does she agree that the proposals for programming and better use of time in the Chamber and Westminster Hall should be read carefully by all hon. Members? Those proposals are sensible and a decision should be taken to adopt them as an experimental way forward in the next Session of Parliament.
Mrs. Beckett: I am grateful to my hon. Friend. She is right to say that I endeavour to reach agreement and consensus on such matters, building on the consensus that has existed in the House for many years, until quite recently. We should continue to try to get such an agreed way forward. If the House agrees to proceed with such an experiment, I expect that few will wish to turn the clock back.
Mr. Andrew Tyrie: Earlier, the hon. Member for North Cornwall (Mr. Tyler) suggested that I was supporting the proposals in the Modernisation Committee's report for the programming of legislation. In fact, what I wrote in my pamphlet was that we in the House need to scrutinise power where it really lies—that is, with the Prime Minister, who hardly ever comes to the House, hardly ever votes here and hardly ever speaks here. Will the Leader of the House give urgent consideration to the possibility of a debate to find ways in which we can bring the Prime Minister nearer to the centre of our deliberations in the House?
Mrs. Beckett: No one ever suggested that the hon. Gentleman was supporting the proposals in the report.

435
I confidently expect that he, along with most other, and perhaps all, members of the parliamentary Conservative party, is likely to vote against the report, as I see no indication of a free vote or free thinking on the matter on their side. The hon. Member for North Cornwall (Mr. Tyler) was probably quoting his remarks that programming is not only a good and valuable way of making the best use of time, but was somewhat inevitable.
On the issue of scrutinising where power really lies, and the Prime Minister's role, I repeat to the hon. Gentleman that he should know that the Prime Minister's record of attendance in the House and his record of statements in the House are infinitely superior to those of his predecessor. It is true that there was a substantial break with precedent with regard to the number of occasions on which Prime Ministers speak in the House. It was made by the right hon. Lady Thatcher.
Several hon. Members rose—
Mr. Deputy Speaker: Order. We must now move on.

Points of Order
1.15 pm
Dr. Evan Harris: On a point of order, Mr. Deputy Speaker. You and the House may be aware that yesterday there was an announcement in the press of £1 billion extra funding for science. That was also reported to be in a speech by the Chancellor, but no statement appears to have been made in the House, and no question appears to have been answered in today's Hansard on the matter. Should not Ministers be making such announcements to the House rather than through the media and in speeches outside the House? Questions on whether that announcement is welcome, whether there will be funding for equal opportunities in higher education, whether the unit of resource should be better funded, and other such matters could then be put directly to Ministers.
Mr. Deputy Speaker (Sir Alan Haselhurst): The Chair has received no notification of any announcement in any form to the House. I can only repeat what Madam Speaker has said on a number of occasions—that significant changes of policy should be announced to the House by one means or another.
Mr. John Bercow: On a point of order, Mr. Deputy Speaker. Have you had any indication from the Prime Minister or another Minister that the Government intend to return to twice-weekly Question Times, in the light of the new precedent established yesterday of the Prime Minister answering a question this week which he had failed to answer properly the previous week?
Mr. Deputy Speaker: No such notification has been received. That is not a matter for the Chair.

ESTIMATES DAY
[2ND ALLOTTED DAY]
ESTIMATES DAY
  ESTIMATES, 2000–01
    Class XV1, Vote 4

      HM Customs and Excise
      [Relevant documents: Second Report from the Treasury Committee, Session 1999–2000, on HM Customs and Excise, HC53, and the Government's response thereto, HC442; and HM Customs and Excise Departmental Report 2000: The Government's Expenditure Plans 2000–2001 to 2001–2002, Cm 4616.
      Motion made, and Question proposed,
      That a further, revised sum, not exceeding £482,077,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges which will come in course of payment during the year ending on 31st March 2001 for expenditure by the Customs and Excise Department on the administration of taxation; the operation of customs and revenue controls and other Customs and Excise-related services; and payments in respect of Shipbuilder's Relief and the Customs and Excise National Museum.—[Mr. Kevin Hughes.]
      1.16 pm
      Mr. Giles Radice: As Chairman of the Select Committee on the Treasury, not of the Sub-Committee, I shall make only a brief intervention. The hon. Member for West Worcestershire (Sir M. Spicer) is the Chairman of the Sub-Committee, so he will make the Chairman's speech. I simply wanted to act as a master of ceremonies, introducing the guests to the hosts.
      The Sub-Committee was set up in 1998 to scrutinise the bodies and organisations for which Treasury Ministers are responsible. For a year now it has been well chaired by the hon. Member for West Worcestershire. This afternoon we are discussing the Sub-Committee's fourth report, the second report of this Session on HM Customs and Excise.
      The Sub-Committee had five sessions of oral evidence and visited Canada to consider the merger of authorities. It has done a thorough job. There were three issues of which the Sub-Committee rightly made much. The first was whether it was desirable to merge Customs and Excise with the Inland Revenue, and the Sub-Committee concluded that it was a good idea, for three main reasons—that it would improve compliance with taxation, reduce businesses' compliance costs and reduce the Government's revenue costs.
      The Government, as my hon. Friend the Paymaster General knows, rejected our proposal and defended their position of so-called closer working between the Inland Revenue and Customs and Excise. I look forward to hearing the Government justify their position. In that context, I want to mention the news yesterday, reported in the Financial Times, that an internal investigation ordered by the new chairman of Customs and Excise has identified losses of up to £1 billion, which apparently could be double that, in Customs and Excise's collection role. That is its core activity, on which, apparently, it has fallen down. That is another reason why the Government might reconsider their position on merger. In any case, I should like to hear something about that matter.
      438
      The Sub-Committee also investigated alcohol and tobacco smuggling. It concluded that tobacco smuggling was a much more serious problem than alcohol smuggling, in the sense that the revenue loss is much greater, and it recommended that further resources should be given to Customs and Excise to slow down and eventually stop tobacco smuggling. I congratulate the Government on accepting many of our recommendations under this heading. I understand that they have provided extra resources amounting to £209 million. I should like to know how that money will be spent. Is it new money? This is a useful occasion on which to inform the House about that.
      The third main issue that the Committee considered was compliance and compliance costs. Again, the Government have accepted some of our proposals. We believe it to be important that they target reductions in compliance costs, and that there should be legislative underpinning of the so-called Sheldon doctrine. I understand that in a sense the Government have come forward with a compromise proposal, and that is a code of practice. I would like to hear about that, too.
      I end by congratulating the Sub-Committee on doing extremely useful work for the House. It has demonstrated the useful work that Select Committees can do in digging away at things. Their work is useful for Parliament—that is their main purpose—and for the Government. There are some who consider that Select Committees are there to attack the Government. In fact their role is to make Government accountable, so there should be a win, win situation. It is right that Government should be investigated and made accountable. It is right also that the activities of Government should be transparent, and the report provides a good example of a Select Committee doing its work properly.
      1.22 pm
      Sir Michael Spicer: I feel these days that I should begin all speeches by declaring an interest, however remote or obscure it is, as president of the Association of Electricity Producers. I do not think that there will be any read-across, but I declare the interest in case there is.
      I do not want my remarks to turn into a boring, self-congratulatory society debate. However, I shall return two of the compliments of the right hon. Member for North Durham (Mr. Radice). First, he is an excellent Chairman of the Select Committee on the Treasury. He is particularly good in the way that he has devolved responsibility. He allows the Treasury Sub-Committee freedom to investigate the range of departments and agencies for which the Treasury is responsible. I thank my other colleagues on the Committee, who have given a great deal of time to its work. I see some of them in the Chamber. Working on the Treasury Committee with the Sub-Committee has become almost a way of life for us.
      The Sub-Committee is behind the report, and it drafted the initial report. It has taken a pretty dyspeptic view about Customs and Excise and the way in which it is run. I believe that it is fair to say that we think that, as a department, it is defensive and pretty secretive. Perhaps that is because before the Committee began its work it was unused to discussing its policies in the light of day. It is pretty unwilling to innovate. Above all, it has been unsuccessful in carrying out its policy remit, particularly

      439
      its remit of closing down the revenue gap that arises from smuggling. As the right hon. Member for North Durham has suggested, this is perhaps symbolised by the revelation yesterday that Customs and Excise had lost up to £2 billion between 1995 and 1998 in unfound excise duties. That was in the period when Customs and Excise also lost around £1 billion of VAT, which, as far as I know, has not been found yet. Perhaps the Minister will tell us later that that money has been found. The loss of £1 billion in VAT is additional to the latest revelation of the £2 billion that was lost in excise duty.
      Smuggling is at the centre of the problem, especially cigarette smuggling, which is not only serious but increasing greatly. In the report, we accept that various remedies may exist for the massive loss of duties, which occurs through cross-channel and other international smuggling, especially of tobacco, but also of alcohol. We found that, were duties lowered, fewer losses through smuggling would be likely. When we visited Canada, we discovered that, when the Canadian Government reduced duties, especially on tobacco, there was a reduction in smuggling.
      However, we also accepted the conclusions of the Institute for Fiscal Studies, which showed that a reduction in duties would lead to a reduction in revenue. We acknowledge that the industry does not accept that conclusion. It argues that leakages occur, and that the elasticities are such that further increases in duties might lead to losses in revenue through further leakages to smugglers and negative elasticity.
      There is much logic in the industry's comments. We also recognise that the Treasury has forecast a fall in revenue, which accompanies high duties, but makes no assumption about future duty levels. However, the industry's position is not based on any independent research. There is no substantive research behind the industry's conclusions. We therefore have to accept that the IFS study is the only truly independent study that has been undertaken of the effect of duties on revenue. We took that study as our evidence. That is why the Taylor report is important in that context.
      There is a suspicion among those in the tobacco and alcohol industries that the Taylor report recommended a reduction in duty in response to the problem of smuggling. There is a further suspicion that the report's publication was suppressed because of that advice to the Government. The Committee was saddened by the fact that the conclusion and analysis of the Taylor report, which was forecast in the Budget last year, could not be published. The suspicion therefore lingers that the Government have on their desk recommendations to reduce duty in the context of smuggling and the general efficiency of Customs and Excise.
      Mr. Oliver Letwin: Did the Treasury Sub-Committee seek to take evidence from Mr. Taylor, and discover his account of his recommendations in the undisclosed document?
      Sir Michael Spicer: No, we did not decide to take evidence directly from Mr. Taylor. However, we pressed the Government hard to produce the papers behind the Taylor report. We received a negative response.
      Mr. Letwin: My hon. Friend will realise that it is important for the House to hear the answer to my next question. Why did the Sub-Committee decide not to interview Mr. Taylor?
      Sir Michael Spicer: I suppose the Sub-Committee accepted that, because the Government had commissioned the report, it was for the Government to determine whether it should be published. We certainly pressed the Government. Indeed, I shall press the Government today, as I shall return to the issue shortly. We all thought that it would have been helpful to have the report, but we also thought that, as it was a Government report, it was for the Government to decide whether to release it.
      Having dealt with the question of reduction of duties, we were left with the question of how we were to address the serious and remaining problem of what to do about the increase in smuggling, and the loss of revenue, amounting to as much as billions of pounds, resulting from the current rate. We considered two possible solutions. The first was greater administrative efficiency, which led us to discuss the possibility of closer working between Departments on revenue-raising. We found that the roots of what has come to be described as closer working were planted as long ago as 1994; we also found that very little had actually happened. In fact, no proper liaison committee had been established until our Committee's interest in the subject had been made public.
      We were unhappy about both the progress of closer working and the way in which the Government seemed to be setting about pursuing it in the future. In our report, we said:
      We are surprised that more thought has not been given to the evaluation of the Closer Working programme… We received no clear indication from Customs and Excise of how it intended the Closer Working programme to develop in future.
      We concluded:
      do not believe that the Closer Working programme will fully achieve its objectives and deliver the benefits claimed by Customs and Excise. Consequently, the option of merger requires serious consideration.
      That brought us to the question of merger between the Inland Revenue and Customs and Excise. In part, we referred to Canada on that, because Canada had recently carried out precisely such a merger. We said to the Canadians, "We have two revenue-raising departments, one of which does not seem to be working particularly well. Do you think that there are arguments for merging?" We found that, in Canada, many of the worries about merging did not apply. It had worked, and we thought that there was at least a case—a case that the Government should consider—for merging the two departments. The argument would be that, given that Customs and Excise says that it is short of resources, merging the departments would make economies. More money could be used for customs purposes than is used at present, and the whole arrangement would be administered better.
      Other arguments were advanced. The right hon. Member for North Durham mentioned compliance costs for industry. It has been argued that—certainly in regard to the collection of VAT—Customs and Excise is less than assiduous in allowing for the needs of business, and in making business tax collection as efficient as possible in terms of costs. The Inland Revenue undoubtedly does that; it is argued that Customs and Excise tends to be more heavy-handed. Compliance costs might therefore be another factor in favour of merging the departments.
      However, the Committee was particularly interested in efficiency in the context of customs and collection. When we questioned the Minister, we learned that the

      441
      Government had not particularly studied the Canadian example—which we had pressed them to do for some time—and that they were relying on a report produced some six years ago, under an earlier Administration, which had apparently argued against a merger. We pressed on many occasions to have the report put on the Table, but were unsuccessful. We were even prepared to look at it in confidence, but there was complete reluctance to let us look see it. As it was used constantly in evidence—it was the only real justification for not going further into the merger issue—we were extremely dissatisfied.
      I must read to the House the conclusions that we reached. It was a serious matter to us. We felt that we should have been allowed to look at the report on the question of merger. We say in paragraph 22:
      It is extremely disappointing that, as the Freedom of Information Bill began its passage through Parliament, Customs and Excise refused us access to a six year old report on a matter of departmental organisation central to our present inquiry, far removed from party political controversy or national security, defence or foreign policy concerns. We entirely fail to see how the public interest could be harmed by the disclosure of this report, although, of course, the Government's case against merger of the revenue departments might easily be harmed if we were to have found that the report's analysis of the costs and benefits of merger had been inadequate or skewed against the merger option. We are led to conclude from this episode that the 1993 report would not have stood up to vigorous scrutiny by this Committee.
      That was a fairly serious thing for us to say. It did not please me to have to say it, but I still hope that Customs and Excise and the Government will reconsider the matter. An argument against merger cannot be based on the findings of a report whose analysis and premises we are not allowed to see.
      In trying to achieve greater efficiency in Customs and Excise, proposals have been made to introduce new technology, particularly X-ray equipment. The problem is that, in recent years, none of the three great initiatives on the matter seems to have had any positive effect. The first resulted from the 1998 alcohol and tobacco fraud review. That ended with a lot of conclusions about the need for more technology and various other proposals, focusing particularly on X-ray equipment. That stood in the open and was apparently applied, but, when we got to last year's pre-Budget report, the programme put forward as the answer to the problem was almost precisely the same as that which had been put before Parliament almost two years previously. Apparently, nothing in the meantime had happened. The smuggling had become worse in the process.
      Then on 30 June, just a week ago, the Paymaster General announced that she had
      commissioned a full independent investigation into the collection of excise duties in HM Customs and Excise,
      so we have had three promises of new initiatives on Customs and the way in which it collects duties. In the meantime, no one disputes that the situation is getting worse and worse.
      The last Government initiative was certainly in anticipation of the latest scandal being revealed. There we have it. Once the £2 billion had been acknowledged to have been lost, the Government came up with yet another initiative, which seems similar, if not identical, to previous initiatives, which so far have failed.
      442
      That leaves us with a number of questions to ask the Government. What did the Taylor report say? They are not prepared to let us look at the actual text of any report, but we need to know. The Committee decided to leave the Government quite a lot of room for manoeuvre on the question of excise duties and their effect on smuggling; some of us even felt that we left them too much room for manoeuvre. In return, Parliament must be allowed to know the details of the Taylor report.
      Has there been—or will there be—proper consideration of the merger issue? Specifically, will the Government think again about why Parliament should not be allowed to see a six-year-old report on which they seem to be basing the entirety of their case for not considering the merger issue further?
      There have recently been three statements that new technology will be introduced. But why has technology not been more effective? Why have there not been greater results from a programme that has now been under way for several years? Why is the programme becoming less effective with the passing of each year?
      There is also the issue of the latest scandal. If there is to be a public inquiry, when will it be established and when will it report? Given that the new scandal comes on top of what one might call previous unfortunate incidents, will the Government start to take a rather less cavalier attitude to the overall issue of smuggling and reforming Customs and Excise? Will Ministers also reconsider the Committee's suggestions—although they have already rejected most of the major ones?
      1.41 pm
      Mr. Jim Cousins: I do not envy my hon. Friend the Paymaster General in having to address this issue. The Government's inheritance from the previous Administration on the issue was woeful. That was made clear to the Treasury Sub-Committee in the evidence presented to us in our examination of Customs and Excise. It is quite clear that Customs and Excise have long been badly led and managed, badly resourced and badly organised. It is also clear that there are not sufficient resources for it to do the job that it wants to do and should do.
      Nevertheless, I acknowledge the heroic work with VAT and excise duty, being done by many people in the front line of Customs and Excise. The House should pay tribute to the excellent work being done daily by them in a desperate and heroic attempt to stem a tidal wave of abuse that they are not properly equipped and organised to deal with. The House should try to address that issue in this debate.
      We must deal with some very serious abuses affecting our communities and striking at the heart of public confidence in some key aspects of the machinery of government. If we cannot stem the rising tide of tobacco and alcohol smuggling, the very integrity of Government policy will be put at risk. Thousands of legitimate jobs and businesses are being put at risk by those growing abuses. We should not overlook the similar problem in the collection of value added tax. VAT evasion and growth in the informal economy also are endangering legitimate jobs and businesses. The Sub-Committee has attempted to address that overall issue.
      The Sub-Committee clearly formed the view that the abuses that I have described are real and increasing, and that they are probably more extensive than Customs and

      443
      Excise were at that time prepared to tell us. I think that the Sub-Committee's instinct on that matter has been proved by subsequent events to be entirely correct.
      Secondly, the Treasury Sub-Committee realised that wholly new demands were being placed upon Customs and Excise, particularly around the growth of electronic commerce and the problems of identifying businesses and tracking commercial activity for the purposes of excise and VAT control and enforcement.
      Thirdly, the report drew attention to some massive and quite deep-rooted organisational failures and inefficiencies and the lack of resources available to Customs and Excise either to deal with the growing number of abuses or to confront the need to expand their efforts and organisation to deal with new areas of commerce and the new demands.
      Since the Treasury Sub-Committee reported, at least four major inquiries have either reported with reference to Customs and Excise or are about to do so. They include Lord Grabiner's report on the informal economy, particularly VAT abuse, and the report of his honour Gerald Butler on his inquiry into the case of Regina v. Doran, the so-called "Operation Steeler" case, which threw considerable doubt on the internal effectiveness and good order of Customs and Excise as an investigating and prosecuting organisation. The Government responded to the Butler inquiry by setting up a further inquiry, led by the Attorney-General, into whether Customs and Excise should properly retain their powers of prosecution.
      There was also—this makes life particularly difficult for my right hon. Friend the Paymaster General this afternoon—the inquiry that she launched only last Friday as a result of information that was brought to her by the new chair of the Customs and Excise board into excise evasion, this time in respect of alcohol. This afternoon's debate provides an opportunity for my right hon. Friend to set out her objectives and those of the Government in that inquiry. I am sure that she will do that.
      Although one must always show proper courtesy, respect and restraint on these occasions, I very much welcome the indication that the new chair of the Customs and Excise board will be more proactive than several members of the Sub-Committee felt that the previous leadership of the Customs and Excise board had been. That is an excellent sign, albeit that it puts my hon. Friend the Paymaster General in a difficult position this afternoon. The House will rightly expect to know a great deal more about her intentions. Much of the debate should be taken up by my hon. Friend explaining to the House how she intends to address the problems.
      A number of other points should also be mentioned. First, we should consider the large scale of the abuses in respect of tobacco and alcohol. The hon. Member for West Worcestershire (Sir M. Spicer) referred to the fact that in its evidence to the Select Committee, the Tobacco Manufacturers Association, which obviously has an interest in the matter, asked for a reduction in tobacco duties as a method of controlling the abuse. I do not share that view, but the association showed evidence to the Committee that almost one in three of packets and cartons of cigarettes sold in this country were either smuggled in or re-imported after having been disguised as exports. The association attributed a total revenue loss of some £3 billion to smuggling on that scale.
      444
      The scale of the abuses is recognised in some of the court cases. A gentleman in Essex was fined £10 million by a court after being found guilty of smuggling offences, which shows that the scale of abuse is considerable. Legitimate traders are extremely concerned about the scale of abuse. I have been given a dossier of evidence by a firm which runs a cash and carry business in Essex, which reveals an extensive correspondence between the firm and the south London and Thames branch of Customs and Excise in an attempt to address obvious abuses that have come to the firm's attention, but without success.
      It is a cause of concern that the ability to tackle the growing scale of abuse appears non-existent. That is partly because of the considerable cuts in staff numbers that were made by the previous Government. They reduced numbers and also disrupted some of the lines of command and control that would have been useful to contain the growing abuses. However, it is fair to point out that the latest annual report from Customs and Excise shows that the number of man-years available in the south-east—which is in the front line of our defence against excise duty abuses—in 1999–2000 was less than in the previous year. That is a matter for concern.
      The Government intend to recruit almost 1,000 additional officers for Customs and Excise, but it is important that my hon. Friend the Paymaster General sets out how that will take place and on what scale. What resources and organisation will be provided to support those additional members of staff?
      The Paymaster General (Dawn Primarolo): I do not intend to intervene through the debate but will give a reply at the end. However, on the specific points that my hon. Friend raises about the south-east, he will know that we now deploy staff in teams according to risk, and we move the teams around considerably. However, I understand that that is not happening in the south-east. My hon. Friend raises an important point that I may not be able to deal with in detail later. I have heard his comments and I will try to address them when I reply. I shall try to address all the specific points that hon. Members raise.
      Mr. Cousins: I am grateful to my hon. Friend for saying that. I draw to her attention the fact that I had hoped to be able to say—based on the annual report from Customs and Excise—that the unsatisfactory position in the south-east in 1999–2000 would be corrected in 2000–01. Conservative Members will understand that Labour Members constantly hope for such relief, but I was not able to find it when I read the Customs and Excise report. I was filled with gloom to discover that a change in regional boundaries meant that the figures for the south-east for 2000–2001 were not available. That does not reinforce confidence among people whose businesses and jobs are at risk in the area.
      One of the Committee's conclusions was that there are deficiencies in the internal organisation of Customs and Excise. Although the possibility of closer working, or even merger, with the Inland Revenue has been suggested, the people responsible for value added tax do not work sufficiently closely with the people in the excise section. In addition, the respective Inland Revenue and Customs and Excise computer systems do not talk to each other, even though huge resources have been applied to them.

      445
      The internal information arrangements in Customs and Excise involve a computer system called PRISE, which the previous chairman of the Customs and Excise board assured the Committee was not relevant to increasing the efficiency of excise enforcement. Other internal information systems include CRIP, the compliance risk information project, and the analytical centres project. Considerable sums of money have been spent on both, but the Committee was unable to satisfy itself about who in Customs and Excise had access to them.
      The overall picture is an extremely unhappy one. The Government must rectify that, urgently.
      The Government have pledged £209 million in additional resources for Customs and Excise, and have focused particularly on the £23 million being made available for new scanners. They will greatly improve the speed, efficiency and effectiveness of excise evasion detection, and I hope that my hon. Friend the Paymaster General will clarify whether that £23 million is included in the total of £209 million, or is additional to it.
      However, the first of those scanners will not become operational until November. Originally, they were being installed to deal with excise duty problems but now—after the almost incredible horror of the incident in which so many unfortunate Chinese people were trapped in a container—it is clear that they will also have to bear the burden of immigration detection. The additional resources will therefore have to cope with demands way in excess of what was forecast when they were first allocated.
      Mr. David Kidney: Would not every lorry go through fixed X-ray scanners at ports? Could not the scanners detect illegal immigrants in one lorry, and an illegal load of cigarettes or tobacco in another?
      Mr. Cousins: My hon. Friend is right, of course, but he should bear in mind that using the scanners is complex. New and much larger dedicated parking areas will have to be laid out, where lorries can queue to use the scanners. Clearly, moreover, not every lorry could be scanned. Questions of intelligence, preselection and so on would therefore arise again. That only reinforces my anxiety about whether Customs and Excise is sufficiently well organised internally to be able to do the job with the greatest effectiveness.
      In addition, when the scanners are put into use we shall soon hear about horrendous parking problems and delays in processing lorries and vehicles through Dover. The House had better stand ready for those complaints, because there will then be immense pressure on Customs and Excise to reduce the number of lorries that it seeks to check and scan. These are very difficult issues.
      Mrs. Ann Winterton: I have been very interested in the hon. Gentleman's remarks about the scanners that are to be introduced into our major ports. I hope that he will forgive my ignorance, but I wonder whether a solution, as far as immigration is concerned, is that lorries should pass under gantries, which can be built quite easily, and that there should be heat-seeking cameras on the top and at the sides, rather like those used by the police when they go up in helicopters to try and find people who are missing but not yet dead. Is that an
      446
      over-simplistic view, or could it be carried out more simply than the complete scanning? Would it cost less and be easier to implement?
      Mr. Cousins: The hon. Lady raises an issue that does not properly form part of this debate, and to attempt to respond to it is totally beyond my information. She speaks of immigration, which is the responsibility of the Home Office. I was seeking to draw the attention of the House to the fact that the scanners, which were acquired for the purposes of detecting excise duty evasion, may be given a new range of responsibilities as a result of other events. That will make life more difficult when it comes to detecting excise duty evasion.
      There is considerable confusion of investigatory authorities in considering excise duty evasion. It was of interest to me that in its most recent report, the Intelligence and Security Committee drew attention to the fact that drug smugglers and other organisations with political purposes, which are often linked to trade in materials such as drugs, are switching their organisational skills into tobacco smuggling. It is closer to legality in most regimes than drugs, and the profits are as great or greater.
      The Intelligence and Security Committee was extremely concerned about the lack of co-ordination of our investigation services in redeploying to meet that difficulty. We have the National Criminal Intelligence Service, the national investigation service within Customs and Excise, normal police arrangements and the activities of the security services. The Intelligence and Security Committee echoed the evidence of the Select Committee on the Treasury in its great concern about the lack of co-ordination and effectiveness between the various investigatory agencies.
      The matter goes to the heart of the Butler report about the collapse of the Steeler case, in which those very issues are highlighted dramatically. The Government must, as a matter of urgency, address the confusion and lack of effectiveness on the part of the various arms of investigation. They are coming at the same problem from a number of different directions, using various techniques, resources and legal channels, and the result is not in the public's best interests.
      Let me turn to closer working. The Committee discussed a merger of Inland Revenue and Customs. The House must confront the old Spanish—perhaps I should say Spanish-British—practice of having two distinct revenue collection agencies. Most modern revenue collection regimes have a single agency. Those who defend the practice of having two should justify it. It is not normal, and other revenue collection regimes have not found it the most efficient and effective model.
      The Government, however, favour closer working between the Revenue and Customs. That requires us to confront long-established cultural differences between the two organisations—the main reason why people reject merger. We cannot escape the problem of having two organisations with different histories and cultures by simply avoiding the question of merger. That difficulty will have to be addressed if closer working is to be established.
      There is practical evidence for that proposition. The Inland Revenue, which has historically not visited taxpayers in great numbers, has introduced a programme

      447
      to increase visits. Customs and Excise, meanwhile, which has historically made many visits to those who pay VAT, is scaling back. That is an example of what closer working means, and of the difficulties involved.
      The legal basis and status of investigation officers in the two organisations are hugely different. Closer working cannot overcome that. We must put investigations on a platform of common intelligence and common investigatory powers. To forestall anything that the hon. Member for West Worcestershire might say about that, I do not mean that we should always scale up the powers of the Inland Revenue to those available to Customs and Excise. We should find new, more appropriate legal powers to address issues such as electronic commerce.
      The establishment of a single business register list will be an important innovation, providing an identifier and a tax collection point for Inland Revenue taxes, VAT or excise duties. The Government have launched pilots, experiments and test studies on a list, but I am far from satisfied that their approach is as well co-ordinated as it should be. Some initiatives have been taken through the Department of Trade and Industry and others through the Treasury. I wonder whether enough co-ordination or urgency is being given to a simple organisational change that could provide a platform for more effective regulation and enforcement to protect legitimate business.
      Neither the Committee nor the House knows what commitment the Inland Revenue and Customs and Excise are genuinely making to closer working. There is a great deal of talk, and some money has been allocated. Mysterious switches of money are made between Customs and Excise and the Inland Revenue, but what it all actually involves remains entirely obscure. Today's debate provides a chance to begin to tease out what closer working means.
      The House is in a difficult position. The scale of the problems that we detected when we made the studies that helped to produce the report has been entirely borne out by subsequent events. Looking back on the matter, there was almost an attempt to conceal from the Committee the true scale of some of the difficulties. Even while the Sub-Committee was conducting its investigations, certain matters must have been known; for example, the collapse of the Steeler case and the subsequent discrediting—fairly or unfairly—of the Customs and Excise as a prosecuting authority. I have some doubts—
      Dawn Primarolo indicated dissent.
      Mr. Cousins: The Minister shakes her head, so I accept that she is trying to reassure me. However, I remain concerned as to whether Customs and Excise were frank enough with us during our inquiries. We were there to help. We identified problems. They are much greater than even we had supposed. The matter is of serious public importance. It puts at risk jobs and businesses throughout Britain. The scale of abuse in the excise area and, to some degree, in the informal economy discredits some of our normal, legitimate practices.
      Such matters cannot be overlooked; they must be addressed. The Paymaster General is entirely capable of shouldering the burdens and setting us on the right course. We look to her to reassure us and to tell us clearly that we are set on a course whereby these matters will be addressed.
      2.11 pm
      Mr. Edward Davey: I apologise to the House for the fact that, unfortunately, I shall not be present for the end of the debate. I apologise especially to the Paymaster General, because her answers and her summing up of such debates are always useful—certainly in relation to my remarks.
      I serve on the Select Committee on the Treasury and attended a few of the Sub-Committee's hearings, although I did not play a great part in the inquiry. I pay tribute especially to the hon. Member for West Worcestershire (Sir M. Spicer) and to my other colleagues who undertook the bulk of the work. It is a tribute to the operation of Select Committees that when I considered the proposals and recommendations made by my colleagues, I agreed with all of them.
      The report is strong; it is hard hitting. As the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) says, it raises many questions about the way in which Customs and Excise has been working for many years. We may question whether we got to the bottom of all the issues. The Sub-Committee may have to return rapidly to the issue of Her Majesty's Customs and Excise. The questions that we focused on need to be answered quickly.
      Sir Michael Spicer: The hon. Gentleman reminds me that we had already agreed to return to the matter. The Liaison Committee has said that the Sub-Committee should follow up that report and we certainly intend to pursue the matter.
      Mr. Davey: I welcome that news. It makes this debate even more important. It is the job of the House and of the Committee to ensure that we play our part in turning around that failing organisation. There could be many reasons for the failures. It could be under-resourcing, although I think that it has much to do with poor leadership over several years. The new head of the board faces a real challenge.
      Two major issues were identified in the report. The first is smuggling and the measures that are needed to bear down heavily on that abuse. The second is the merger. The Committee came out strongly in favour of merging Customs and Excise with the Inland Revenue.
      Customs and Excise might not be capable of taking on both those challenges simultaneously. However, that is not an argument against having a strategic vision for that important Department of State. It is crucial that the Government go much further than they did in their reply to the Committee. Although this may not be the time to take a rapid approach to merger, they should tell us that merger is the goal. It may take place in four or five years, but the Government should tell us that that is what they want for Customs and Excise.
      Many of the remarks made by the hon. Member for Newcastle upon Tyne, Central were especially pertinent. He referred to the failures of co-ordination and communication within Customs and Excise. Those are shown clearly by the report. It is thus doubtful whether a quick merger would be possible, because of such weaknesses—mainly in Customs and Excise. However, merger must be the vision.
      I was delighted to read, in Wednesday's Financial Times, the suggestion that the Government may be considering merging Customs and Excise with the Inland

      449
      Revenue because of the failures of Customs and Excise in relation to alcohol smuggling. Obviously, the Paymaster General will want to put on record the Government's position and whether, after the recent evidence, they have shifted from their reply to the Committee's report.
      Dawn Primarolo indicated dissent.
      Mr. Davey: The hon. Lady shakes her head, so it appears that they have not done so.
      I hope that she will leave the door open to that policy goal—as she did when she came before the Committee. Possibly, she will suggest that there will be a review or an independent inquiry into the possibility, so that the debate can progress. That is the right route.
      The Committee's arguments for a merger should be put clearly to the House. The evidence showed many benefits, such as improved compliance with taxation. Presumably, that would bring a greater yield to the Exchequer. Another important advantage is often overlooked—indeed, far too often overlooked in Whitehall: the reduction in business compliance costs.
      When we debate the regulations that we impose on the private sector, we often overlook the fact that taxation is the biggest source of regulation, involving not just the cost of the tax itself, but the compliance costs for completing forms, keeping records and contacting the tax authorities. Taxation—be it VAT, excise duties or corporation tax—is the largest regulatory burden faced by business.
      For too long, the House has paid too little attention to that fact—especially as it relates to Customs and Excise. We must bear down on business compliance costs; they are far too high, especially for small businesses, which face too many inspections. If there was only one point of contact with Government in respect of taxation, that would simplify their affairs. They would expend less senior management time and less anxiety on their relationship with the tax authorities. From the point of view of the private sector, that is a strong case for merger. It should be one of the clinching arguments.
      The reduction in the Government's revenue collection costs is a strong argument. I was struck by some of the examples in the Committee's evidence. In a former life, I undertook a little research into the Swedish taxation system. For my sins, I visited the centre outside Stockholm where taxation forms are printed, as my job was to ask about the questions on the forms. It was interesting to see how many taxes were dealt with by one form; for example, income tax, VAT and property tax.
      Sweden may be smaller than Britain, but there is no reason why we should not take that route. We could try to include as many aspects of taxation as possible—especially for business—on one form. That is a real goal. It certainly coincides with the Committee's recommendations.
      I would go a little bit further, but I promise that I will not spend too long on this subject because you would call me out of order, Mr. Deputy Speaker. I believe that we have far too many bureaucracies in our town halls. One of the strongest arguments for abolishing council tax and introducing a local income tax is that it could piggyback on the Inland Revenue. We could then get rid of a lot more of the tax bureaucracies in this country and save an awful lot of money in the process.
      450
      The Committee heard some very strong arguments for a merger of Customs and Excise with the Inland Revenue; so why do the Government persist in not going ahead with it? I was interested in the physical reaction, from a sedentary position, of the Paymaster General when I said that perhaps Customs had lot on its plate at the moment, especially in tackling the smuggling problem. That may be the reason why the Government are not pushing ahead with considering the merger. If that were so, it would be slightly more understandable. If it is the case, I hope that the Minister will confirm it, because I found the arguments in the Government's reply unconvincing.
      There were two main arguments. It was said, first, that a merger would entail risks, costs and structural upheaval. Of course there would be up-front costs; of course it would be an upheaval. Of course there are risks in the process—there are in any structural change, and certainly one of this magnitude. That is why there would be a long process of consultation, a process in which the merger was planned out over a period of four or five years, to ensure that we got things right. That is not an argument against the merger; it is just an explanation of the obvious.
      The second main argument is that closer working can achieve the benefits of merger without the disbenefits. Well, we have been experiencing closer working and it does not seem to have been very effective, for many of the reasons that the hon. Member for Newcastle upon Tyne, Central has just stated. The Government really must do an awful lot better to produce—
      Dawn Primarolo: I shall answer that point now, as the hon. Gentleman will not be present for the end of the debate. That is a contradiction that continually runs through this debate. My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) asked why the Inland Revenue was doing some more visits while Customs was reducing its number of visits. The answer to that question is that, through closer working and shared experience, the two Departments have a better understanding of when they should visit and how to conduct such visits. Therefore, what appears to be a negative—that is, a reduction in visits—is actually—[Interruption.] My hon. Friend the Member for Newcastle upon Tyne, Central laughs, but it is about understanding risk, sharing information and visiting where necessary, but not burdening business with unnecessary visits. That is just a minor example of some of the things that are emerging from closer working.
      Mr. Davey: I am grateful to the Paymaster General for intervening then and explaining that point, and I am pleased to hear that some benefits are emerging from the closer working programme. However, from the evidence that the Sub-Committee heard, and that I have read, it does not appear that the closer working programme is progressing apace. There does not appear to be a huge degree of commitment at senior level to it, and as I—
      Mr. Cousins: I was trying to bring to the attention of the House the fact that visiting policies clearly differ. I draw it to the hon. Gentleman's attention that the Sub-Committee had evidence that there had been a previous programme of joint visits by Customs and Excise

      451
      and Inland Revenue, which had been quietly abandoned and ditched by both organisations. That gives rise to some concern about what the present course of action might be.
      Mr. Davey: I am grateful for that intervention. The hon. Gentleman shows that he is a rather greater expert on the details of this subject than I am.
      That intervention backs up the point that I was coming to, about whether there is commitment, and sufficient commitment, to the closer working programme. We hear that Customs and Excise has undergone a restructuring programme. It restructured its board recently; I am not quite sure why. I am sure that the Paymaster General will enlighten us in due course. However, interestingly, when that restructuring was going on, no board-level closer working director was appointed. If there was a commitment to closer working at the highest level, one would have expected that. One would have expected the board to take the matter seriously.
      We are told by Ministers that closer working is really important—that the two organisations will learn from each other, and understand the benefits and share information and so on, which is what we believe could happen after merger. However, I am not convinced that experience of closer working has shown that the benefits of merger can be achieved in that way without the disbenefits. The closer working programme must do an awful lot better, and be undertaken with far greater commitment and extremely quickly if the House—and, I believe, the Sub-Committee—is to have faith in it as an alternative to merger. I am not convinced by it at all.
      When, elsewhere in government, some successful mergers of Departments have taken place, the risks, the costs and the structural upheaval—all the excuses that have been made for not merging Customs and Excise and the Inland Revenue—have not been considered. I pay tribute to the Government for the way in which they have integrated the Contributions Agency with the Inland Revenue. It was an excellent idea; I totally support it. The Government have also set up ONE, by merging parts of the Benefits Agency and the Employment Service. The political will was there to carry out that merger. Why is not the political will there to carry out this merger? It seems that when the political will is there, the practical arguments against merging sometimes fade away.
      I shall now move on to the smuggling issue. The Paymaster General knows that, in debates that we have had on that issue, in the House and in the Committee of the Finance Bill, I have in many ways supported what the Government have said about administrative changes and the introduction of new technology, such as X-ray scanners. However, I have been concerned about the delays in action, and the report increases my anxiety.
      I know that the Paymaster General is committed to hitting the smugglers hard, and she is coming up with a set of policies which, I believe, will be effective; but there are delays. As the hon. Member for Newcastle upon Tyne, Central said, many people are worried about those delays.
      Dawn Primarolo indicated dissent.
      Mr. Davey: The Paymaster General shakes her head, but we have known that this has been a problem since the day that the Government took office, and we had hoped that we would have got further down the track than we have.
      452
      That brings me to the report in yesterday's Financial Times in which, as the right hon. Member for North Durham (Mr. Radice) has said, there is news that alcohol smuggling is significantly more extensive than Customs and Excise had previously thought. When we debated the subject in the Committee on the Finance Bill and when we had evidence from Customs and Excise, we heard that the real problem was tobacco smuggling, not alcohol smuggling, but the new evidence would suggest that alcohol smuggling is on a par with tobacco smuggling. If that is the case, that again raises questions about the competence of officials within Customs and Excise, because they had not detected the scale of the problem earlier; their capacity to tackle the problem is seriously called into question.
      I know that other right hon. and hon. Members want to speak on those issues. I just want to finish on the figure on the Order Paper for the estimates that we are debating. I apologise to the Minister if my lack of research has not produced the answer for me, so that I may have to wait until I read this debate in Hansard to find out the answer—or she may find that she has to write to me. I am slightly puzzled by what is on the Order Paper. We are being asked to support the granting of £482,077,000 to Customs and Excise and various other people,
      and payments in respect of Shipbuilder's Relief and the Customs and Excise National Museum.
      When I look into the departmental report for the same year, for the same class and the same vote—class XVI, vote 4—I am unable to find that figure. That may well be my own incompetence. I may have misunderstood something. We may have previously voted on the rest of class XVI, vote 4 on some other occasion and this money may be additional. However, that is not clear from the Order Paper or the departmental report, although it should be. It is an awful lot of money for the administration costs of a Department, and the departmental report's account of the class XVI, vote 4 suggests that the costs are significantly larger than those set out on the Order Paper. I hope that the Paymaster General is able to explain why that is.
      I know that estimates have received cursory attention over the years and that they are not taken terribly seriously, but it would be nice if the Government at least made an attempt to assist the House so that, when we looked at the Order Paper and the departmental report, we were able to work out what was going on. If those of us who take an interest in the subject cannot easily work out what is happening, what hope is there for casual observers or our colleagues who are not so interested in or anoraky about the subject of Government expenditure? How are they able to understand what the Government are trying to do with their expenditure? If there is an easy explanation for the difference, I shall be grateful to hear it. However, I hope that, in future, the Government will make their requests for Supply rather clearer.
      2.31 pm
      Liz Blackman: The wide-ranging inquiry that the Sub-Committee carried out was very interesting. It covered merger and closer working, the smuggling of alcohol and tobacco, and compliance. The subjects are inextricably linked to a degree, but, having given the matter a great deal of thought, I decided that, like other hon. Members, I would focus the main part of my speech on tobacco and alcohol smuggling.

      453
      Tobacco and alcohol smuggling damage our society from top to bottom in many different ways. It makes it difficult to secure the right level of Government revenue, can result in violence, poses a health threat and causes unemployment. We also have to pay out substantial sums for the detection, prosecution and punishment of offenders.
      What tipped the balance in favour of my decision to speak on this issue was a visit that I made to my local off-licence last week where I slightly inflated the profits that it made on wine. Its owner collared me and spent a long time explaining how much he had lost in the past eight years. He said that his profits were less now than they were eight years ago and he put that down predominantly to alcohol smuggling. He was being undercut by alcohol that had been smuggled into this country and which was being sold in other off-licences in the city where I live.
      The man to whom I spoke is honest, above board, pays his taxes and works hard. His off-licence is in a relatively affluent area where people have money to spend, but he was seriously worried by the damage that smuggling has caused to his small business. I imagine that the impact of smuggling is being replicated across the United Kingdom. Therefore, I decided to focus my remarks on smuggling.
      As hon. Members have already said, the scale of smuggling is immense, but it is very difficult to quantify. A rough estimate is that £2.5 billion was lost to the Exchequer in 1999 as a result of tobacco smuggling alone. We were told that that figure was 10 times more than the one for alcohol, but I doubt whether that is the differential between the two. The scale of the problem should not be underestimated, and we do not do that. In fact, I imagine that it is very difficult to assess its true scale.
      I am encouraged by the fact that there have been record levels of success in the detection of smuggled goods, but it is difficult to say whether the increased detection is a sign that we are beginning to crack the problems or the result of greater smuggling activity and an ever increasing culture of smuggling. We must bear that point in mind.
      The Sub-Committee considered the way in which Customs and Excise measured its performance. We discovered that its previous measures of performance did not fully gauge the impact of its efforts on overall smuggling volumes. In fact, many of the performance indicators were a moveable feast, because a number of variables changed so that it was not possible to make any comparison between one year and the next. Therefore, it was very difficult to assess whether Customs and Excise was doing well, or doing better.
      For example, in 1995–96, Customs and Excise announced that it had exceeded its target of securing 900 vehicles used to carry smuggled goods. However, that target did not appear again. In 1997–98, the number of detections made of smuggled goods yielding excise revenue of more than £10,000 was reported as a target and, in 1998–99, the number of major smuggling organisations dismantled or disrupted was used an indicator. Clarity and stable targets are necessary.
      I am delighted that Customs and Excise is to have a public service agreement—PSA—target focusing on the penetration of smuggled tobacco into the UK. That target
      454
      has been set higher in the first instance, which suggests that the amount of smuggled tobacco is predicted to increase in 2001–02 before it then begins to decrease. One could be cynical and ask whether we will win the battle, but I guess that the answer is, "Yes, we will." My confidence is not without foundation; substantial resources are being put in and there has been a shake-up in management structure and practices. Therefore, I explain the rise and fall in the target in those terms. Targets have been set for the number of tobacco smuggling gangs disrupted each year and for asset seizures. If those targets remain in place, we shall be able to compare how Customs and Excise is doing over the years.
      On tobacco smuggling, I support the Sub-Committee's recommendation that the Government should continue to protect the revenue obtained from tobacco duty. We have health objectives and we should not give in to criminal activity. Therefore, I was disappointed with the Opposition when, during consideration of the Finance Bill, they suggested that that duty should be reduced. That argument is disingenuous, particularly in the light of the evidence that the Sub-Committee took. Canada was cited as an example of a country where excise duty on tobacco had been reduced and smuggling had decreased as a result. In fact, one consequence was a switch to the smuggling of alcohol and Canada lost revenue.
      Another argument is that we harmonise tobacco duty with that in other European Union countries. However, duty-free tobacco from outside the EU is the problem. Italy and Spain, which have lower duties on tobacco products, still face a huge problem with tobacco smuggling. The only way that we could level the playing field is to get rid of the excise duty, but we, like many other countries, predicate our public expenditure on that revenue stream. We also have other objectives when we raise tobacco duty.
      Moving on to resources, I echo my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins), who said that the Opposition have selective amnesia on the Cinderella service that we inherited in 1997. Massive staff cuts had taken place and one of the first things done by my hon. Friend the Member for Coventry, North-West (Mr. Robinson), the then Paymaster General, was to stop 300 anti-smuggling officers being let go, as had been planned by the previous Administration—and, I understand, to prevent the loss of 1,100 VAT officers from the fundamental expenditure review.
      Nevertheless, the Treasury Committee was concerned that there was evidence of staff being switched to deal with more disruptive activity, but at a cost to other areas. Customs officials who came to my constituency office said that they felt that staff were being switched to more pressing areas, which left their flanks exposed. I am pleased that there is now a commitment of £209 million and nearly 1,000 new staff. I am aware that those figures are indicative, and depend on the outcome of the spending review. Will my hon. Friend the Paymaster General tell us, without giving anything away, how confident she is that that staffing level will come through? The appointment of 300 anti-smuggling officers has already been given the go-ahead. How are staff recruitment and training proceeding?
      I shall deal briefly with the £23 million for X-ray scanners. It would be interesting to know whether that money has come from the capital modernisation fund or

      455
      is new money contained in the extra £209 million. Those scanners are welcome and were chosen because of their effectiveness in other countries, where they have an extremely good track record. They will not be in place until November, when all the logistical and technical issues—such as installing them, training officers to operate them, how to select goods coming through and working out how to interpret the data coming across the channel—will have been resolved. There are logistical problems, but I am sure that the scanners will not arrive at ports without any of that preparation being done. I am, therefore, interested to hear my hon. Friend the Paymaster General's response to the issues raised by my hon. Friend the Member for Newcastle upon Tyne, Central.
      I have a couple of questions on the marking of tobacco products. I very much welcome the pack mark scheme. The Treasury Sub-Committee, however, recommended a date mark, as we thought that that was a good way of countering forestalling. My understanding is that that has been rejected, and I should be interested to know why as I am sure that the idea of countering forestalling has not been rejected. However, if the date mark scheme has not been rejected, has it been accepted and is it going ahead? Similarly, in their response, the Government said that they would consider the Committee's remarks on health warnings on packs and would come back with information. Will my hon. Friend the Paymaster General comment on that?
      When the Treasury Sub-Committee spoke to the head of Customs and Excise, he recognised that, although closer working by the Department was moving forward, perhaps much more needed to be done on internal linkages within the Department, as opposed to closer working with the Revenue. Customs and Excise has anti-smuggling teams and back cash teams which monitor retail matters, and also has shadow economy teams and excise verification teams. We were told that the operational policy directive was taking a holistic approach, but the way in which the different elements work with one another in the service is a management issue that needs to be further resolved. I welcome the appointment of the new head of Customs and Excise, as well as what he has already done. However, could we have information on whether he is making the matter a priority in his shake-up of the service?
      The Treasury Committee clearly flagged up concerns about the control system for holding and moving excise goods, which is Europe-wide and paper based, thus providing ample opportunity for abuse, diversion fraud and freight train smuggling. An example of those controls not being in place is the gap in the revenue collection on alcohol, which has been mentioned by several hon. Members and is being investigated. There are now EU agreements to improve and modernise systems, but that is a fairly long-term project. There are on-going improvements to the early warning system, which will continue to be made as a matter of urgency. How are they progressing?
      I was going to go into detail about concerns relating to a story that has recently hit the headlines on the gap of between £1 billion and £2 billion which resulted from fraudulent non-payment for wines and spirits between 1995 and 1998. However, I shall say only that I am pleased that that will now be the subject of an independent inquiry. I agree with the article which said that as well as
      456
      the judicial element, there must be strong commercial input in looking at the problem and serious re-examination of control and information systems.
      I shall touch on the issue of compliance. If the problem of non-compliance is simply about the complexity of having to comply, that is a concern for Government, as it encourages people into non-compliance. Of course, if someone sets out to be non-compliant, that is another issue. However, when systems are complex, telephone hotlines are not available, leaflets are inaccessible and explanations are not given, it is much more difficult for businesses to comply. It is revealing that, in the last 10 to 20 years, there have not been any studies on Customs and Excise compliance costs, although a survey is now planned. The Treasury Committee recommended that the Government should look at a targeted approach to delivering reduced costs, which is now going ahead. Indeed, it needs to go ahead with speed, as that is a move towards helping businesses to be compliant.
      The huge challenge that the Government face in attacking and reducing smuggling includes tackling within Customs and Excise the serious problems associated with investigating and successfully prosecuting smugglers. I welcome the Butler report on that, and it is healthy that those problems are being faced. I hope that subsequent to the inquiry on the matter, recommendations will come before the House.
      I welcome also the Cabinet Office report, "The Proceeds of Crime", which is another piece of the jigsaw in tackling the problem of bringing to book people who are making a considerable amount of money and causing a great deal of misery to our society. For those Members who have not read it, I can say that the report is still at the consultation stage, but it proposes that we extend civil forfeiture powers to strengthen the existing powers of seizure under the Drug Trafficking Act 1994. That would include not only cash linked to drugs crime, but other means of payment such as travellers cheques and bearer bonds. The report also recommends the setting up of a national confiscation agency to work with Customs and other law enforcers on cases that are not pursued by the civil route.
      I am sure that there will be a great deal of debate about that in the House, if and when the proposals are included in legislation. However, the following figures are shocking: from 1987 to 1996, only 157 drug trafficking orders for over £100,000 were made, but there were 45,000 convictions. There is a gap between making the punishment fit the crime and what has been happening.
      I end where I started, by saying that I am very supportive of all the measures being taken by the Government on this ever increasing problem, which has an impact on many different issues, including unemployment, which I have mentioned. Not least is the impact of cheap alcohol and tobacco on children.
      2.53 pm
      Mr. Peter Brooke: It is a great pleasure to follow the hon. Member for Erewash (Liz Blackman), as it is always a pleasure in such debates to follow a member of the Select Committee that has produced the report. Those of us who are in attendance at a debate on a Select Committee report, but who are not members of the Committee,

      457
      inevitably have a slight sensation of being a Jehovah's Witness who has accidentally stumbled upon a coven. However, I declare an interest, having served for two years in the mid-1980s as a Minister answerable to the House for Customs and Excise—a task that I hugely enjoyed.
      On my first day as Minister, I said that I should seek to get out of the Treasury once a month to visit Customs operations. My principal private secretary, who was a Customs official, and who I am delighted to say is now a commissioner member of the board of Customs and Excise, was sure that we would not achieve that, but we achieved visits once every six weeks or so, and 17 visits in all, so I have some knowledge of, and considerable respect for, Customs and Excise, at least in those years. I acknowledge that those years preceded the smuggling bonanza of the past decade.
      Customs is an ancient service and existed in a privatised form long before it was a public service. It practised in the City of London, and in the port of London in particular. Chaucer was a Customs officer—it is a much older service than the Inland Revenue.
      In the light of the Select Committee's comments on Customs' need to be more user friendly towards business, it is perhaps worth repeating the episode in the mid-14th century when Edward III, anxious to restore Westminster's economy after it had been ravaged by the shift of the Government to York in the context of the Scottish and Welsh wars, decided that the office for extracting imposts on all exports of wool should be moved from the City end of my constituency to the Westminster end, rather as more recently the French customs decided that all Japanese videos should enter France through Poitiers in the heart of that country. It will not surprise the House that, within a dozen years, 14th-century market forces had moved the taxing point back to the City.
      If I express some loyalty to Customs and Excise in these remarks, it will not be the first time that I have done so. During the 1987 general election, my noble Friend Baroness Thatcher insisted that a Treasury Minister should be present at all her London press conferences, and that hazardous role fell largely on me because of my constituency. I say "hazardous" because the public prints of the day reported that, in one press conference answer, the Prime Minister criticised Customs and Excise for its treatment of small business and appealed to me for support on the platform. I had to say that I could not follow her the whole way because it was within my certain knowledge that Customs and Excise could visit each small business in the land on average only once every eight years for an inspection.
      Given the Select Committee's new criticisms of Customs and Excise for business user-unfriendliness, I can see that the then Prime Minister may well have been more right than I had surmised. I did not so damage my standing with her that she resiled from appointing me chairman of the Conservative party six months later, but in reflecting on this debate, it has occurred to me that she may have decided that it was better to have me running Smith square than answering for Customs and Excise in the House.
      At any rate, that move ended any responsibility that I had for Customs and Excise, to which my most notable contribution was the resolution of the Euro-tunnel treaty
      458
      problem. We had to resolve the dilemma that French customs officers on trains entering the tunnel would still be carrying guns when the trains left the tunnel at our end, whereas British customs officers would not be carrying guns. Our resolution, accepted by both sides, was that French customs officers could carry guns on British soil, but if they wished to use them, they must apply in writing to the chief constable of Kent. One indirect contribution was that I chaired, from 1988 to 1989, the Government working party to set up the Government data network, initially between four Departments, of which Customs and Excise and the Inland Revenue were two.
      I want to dwell on three issues: first, smuggling; then, briefly, the climate change levy, if that is in order; and, finally, the Select Committee's proposals for merging Customs and Excise with the Inland Revenue.
      On smuggling, I called in 1991 on my successor at Customs, the then Minister of State, to discuss the plans for the introduction of the Single European Act in 1992 in the context of smuggling, and particularly the smuggling threat to Gallaher's factory in Northern Ireland, where I was then serving in government. I am against politicians saying, "I told you so," but I have to confess that after hearing of the preparations of Customs and Excise in 1991, I did not think that they were likely to be wholly effective, and I have not been wholly surprised by the turn of events since. In all honesty, I should, following various speakers in the debate, acknowledge that I was genuinely surprised by the reduction in Customs and Excise staff numbers in the previous Parliament, given the tasks that it was being asked to address, but then I was no longer a member of the Government.
      Anyone interested in smuggling naturally has a sense of history in general and of the 18th century in particular. It was Pitt the Younger's triumph in his fight against smuggling that he characteristically went for essentials. His central problem was that the excise duty rates were so high that smuggling enjoyed considerable public respectability, as evidenced in Kipling's lines:

      Five and twenty ponies

      Trotting through the dark—

      Brandy for the Parson,

      'Baccy for the Clerk;

      Laces for a lady, letters for a spy,

      Watch the wall, my darling, while the Gentlemen go by!

      I hold no brief for espionage, but otherwise those lines catch the flavour of the age.
      Pitt's solution, of course, was to slash excise rates, with the wholly benign result not only that smuggling ceased, but that the Treasury's revenue rose exponentially, as it did when my noble Friends Lord Howe of Aberavon and Lord Lawson of Blaby cut the top rates of tax two centuries later.
      Of course I understand the Government's health arguments. I do not want to give the impression that I have not followed them in this instance, but I also followed the debates on the Finance Bill in Committee on the Floor of the House two months ago. My right hon. Friend the Member for Wells (Mr. Heathcoat-Amory), the shadow Chief Secretary to the Treasury, and several other hon. Friends drove an Exocet worthy of Pitt through the camouflage that was advanced by the Government in their arguments for joined-up government. Those arguments are a classic case of the school report stating, "The improvement in your son's handwriting has revealed alarming deficiencies in his spelling."

      459
      The Select Committee report and today's debate are invaluable searchlights on this major crux in the efficacy of Government policy. However, in constrast to the Select Committee's findings on Customs and Excise secrecy, the Select Committee on Northern Ireland Affairs, which examined Customs and Excise witnesses in the context of petroleum duties and consequential smuggling into Northern Ireland from the Republic of Ireland, gave us clear evidence, although I admit that that was under the leadership of my former principal private secretary, which may or may not have been a coincidence.
      My remarks on the climate change levy will take the form of a single quotation. The other day, the Financial Secretary to the Treasury gave me a very civilised written answer on the levy, to what would have been an oral question, had it not fallen too low in the ballot. I have, however, heard him answer oral questions on the levy several times and every time, he prays heavily in aid my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer). It is too long a quote for an oral question, but I offer the Financial Secretary, in his understandable capacity today as Banquo's ghost on the Treasury Bench, my right hon. Friend's preface to a question to the Prime Minister on 12 April. He said:
      When I asked the Prime Minister some time ago what the effect would be on Britain's emissions of the moratorium on gas-fired power stations, he did not know. His right hon. Friend the Secretary of State for the Environment, Transport and the Regions thought that the effect would be so small as to be laughable. It turns out that the effect is, in fact, so large that it countervails the whole effect of the climate change levy.—[Official Report, 12 April 2000; Vol. 348, c. 360.]
      Those do not sound like the words of the Financial Secretary's natural ally.
      I come to the merger. I have read the Select Committee report and have heard the arguments of its members today. I have also read the Government's response. In her letter accompanying the response, the Paymaster General states:
      there are also important differences between the roles of the two Departments, which require the development of different skills set in terms of assurance and collection. Indirect taxes are transaction-based taxes, requiring real-time identification of transactions with near-simultaneous and continuous collection. Direct taxes are periodic and accounts based, generally collected in arrears.
      She goes on to expand on the generic particularities of indirect taxes to the same effect in arguing the Government's response—that they were not in favour a merger.
      The Select Committee report closed with a single sentence in heavy type at the end of paragraph 133, which stated:
      In our view, one of the main benefits of the merger of Customs and Excise and the Inland Revenue would be to effect a shift in the culture of VAT and excise collection so that it was more attuned to the needs of business.
      It is not for me to second-guess the Select Committee's final sentence, not least because it took the evidence, but I doubt whether the Select Committee would have ended the same way 15 years ago. In that era, the distinction between the two agencies was that the Inland Revenue was more deeply into precision, while Customs and Excise, because of its permanent interface with business, was more into rough and ready agreements with business by which it would seek to collect the broad necessary tax arising from legislation while making its collection convenient for both sides. Because of the longevity of
      460
      both services over centuries, I should be surprised by so rapid a change in 15 years, and my instinctive objection to the proposed merger derives from the different cultures.
      I do not know how many members of the Select Committee have been involved in the process of change in large organisations, but I had some experience of that in the margins during 18 years in the private sector, and it is a genuinely challenging task. Not least because of my involvement in helping to set up the Government data network, I am of course wholly in favour of further exploration of potential collaboration, but at this juncture I would need a lot of convincing to support a full-scale merger. The Select Committee report, however, has been eminently worth while.
      Several hon. Members rose—
      Mr. Deputy Speaker (Mr. Michael Lord): Order. Before I call the next hon. Member to speak, I remind the House that several hon. Members are trying to catch my eye. Not much time is left and, unless contributions are considerably shorter, some of them will be disappointed.
      3.6 pm
      Mr. David Kidney: The contribution of the right hon. Member for Cities of London and Westminster (Mr. Brooke) is all the more welcome because he is not a member of the Select Committee on the Treasury. Because some hon. Members who want to speak are also not members, I shall keep my remarks brief. I want to discuss closer working, smuggling and the Doran case.
      I recognise the contribution that the tens of thousands of staff make to the work of Customs and Excise every day. I am sure that they seek satisfaction in doing their job well and in the knowledge that they are doing some public good by collecting moneys that will be spent on this country's defence, effective public services and keeping out illegal products and substances that we would prefer not to be here.
      I have often noticed how comfortable politicians are in talking about structures. That is a dangerous thing for us to do; the important matters are the processes involved and the results. The proper taxes must be collected effectively and as politely as possible from honest and hard-working people. Those who have to pay their taxes must find the service that they receive polite and efficient, and they must be regarded as individual personalities, not as numbers or organisations. It is important to focus on that in any debate on how our tax collectors work, so it is legitimate to ask why two organisations collect our taxes and why there cannot be one.
      I should like to defend the Treasury Sub-Committee from any suggestion that we became obsessed with structure and forgot to consider the delivery of the service, first by reminding hon. Members that the investigation into Customs and Excise followed a similar investigation a year before into the Inland Revenue, so we have thoroughly considered both tax collection organisations. Secondly, as the hon. Member for West Worcestershire (Sir M. Spicer) said, we closely considered the experience of Canada, which has merged all its tax collection functions into one organisation, not to try to save money—the evidence showed that no money was saved—but to get the service right, to collect the right amount of tax in a way that is acceptable to the public and to be

      461
      customer friendly in carrying out such duties, thereby reducing the burden on those who have to pay their taxes, especially the costs to businesses, which, of course, have other priorities.
      The Government response to the report states that closer working is a good way in which to ensure that the service provided by our tax collecting organisations is effective, and to achieve the desired results. We on the Treasury Sub-Committee found that in the 1990s, the organisations may have said that, but they did not practise it. The absence of a closer working director until last year has already been mentioned. Equally, there was no system to monitor and evaluate closer working.
      I had the impression that the Paymaster General had come to the system years after it had been set up and found that she could not provide a proper assessment or evaluation of it because the systems had not been in place to provide her with the information needed to make that assessment. In the Government's response to the report, she tells us that the intention is now to ensure that the system has proper aims, such as closer working, and proper monitoring and evaluation in future.
      Nevertheless, I still believe that closer working will not deliver on the agenda that we have all talked about today. I still believe that it is unambitious, and anyone who reads Lord Grabiner's report will see that we need a closer working programme much wider than the one in place. In April, the Committee received a letter saying that criteria for closer working would be established, but we are still waiting to hear what they are, and I am not even sure about what is happening with the budget for closer working. The Committee has just received a letter from the Treasury that talks about transferring closer working budget money from Customs and Excise to the Inland Revenue, but it is not at all clear why the Government are playing fast and loose with that money, which is supposedly important.
      Whether or not a merger ever happens, we could look further at steps along the way to closer working, such as more co-locating of closer working teams, a small amount of which takes place. Why do we need two separate boards for the two organisations? Why could there not be one board for Customs and Excise and the Inland Revenue, even if they continue as two organisations for tax collecting purposes? Again, the Government have travelled along that road a little by having directors from each board serve on the other.
      It is important to remember the distinction between the different kinds of smuggling, which no one has drawn in the debate. Different things are smuggled—ranging from human beings to tobacco, alcohol and drugs—and there are different smuggling operations. A lot of people listening to the debate may simply have in mind the so-called white van trade in which people from this country visit another European Union country with lower tax rates, fill up the van with stuff that they claim is for their personal use, transport it home and sell it commercially much more cheaply than the local off-licence can sell such goods to its customers, thereby doing the off-licence out of business and possibly its livelihood.
      The white van operation is not attractive or desirable, but it is not the most prominent kind of smuggling. Much more significant is so-called diversion fraud, which was
      462
      touched on in a report in yesterday's Financial Times. Goods leave this country, supposedly for export—therefore, no duty is payable—but, instead of going out to the claimed destination, they are diverted back to this country's markets to be sold without duty ever being paid. As we read in the report, and as has been mentioned by many hon. Members, billions of pounds can be lost. Also, goods in container lorries are smuggled into European Union countries from third countries such as Russia and China, where no duty or small amounts of duty, are paid, and sold without EU duty being paid.
      Like many hon. Members who have spoken, I disagree with the idea that cutting duties would reduce smuggling. Most smuggling involves organised criminals—people who pay no duty at all—so unless we reduce duties to zero or close to it, we shall never be able to remove the motive to continue that business. We should therefore consider only the white van trade and whether harmonising duties in this country with those in other EU states is desirable. That would be an interesting debate.
      I refer to the submission made to the Cabinet Office by the Public and Commercial Services union—the trade union that represents most Customs and Excise staff—on how, for a small outlay, the Government could significantly improve the detection and prevention of illegal drugs imports to this country. I support that submission and hope that the Government are able to give it some attention in the spending review announcement that will be made soon.
      I refer also to the case of Doran and the Government's response to the report by Judge Butler, which my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) has already mentioned. In that multimillion pound drug smuggling case, the alleged perpetrators were prosecuted by Customs and Excise. However, the case collapsed and the accused walked free from court. As a result of comments made by the trial judge, an investigation was set up as to what went wrong and why the case collapsed. This is a sorry tale of poor preparation of the prosecution case, the misuse and abuse of investigative powers and a lack of total frankness and disclosure by those involved on the prosecution side.
      As a former solicitor, I was horrified to see that some of Judge Butler's recommendations are very basic. For example, he said that all cases must be
      fully and properly prepared for presentation in court
      and that a barrister instructed by Customs
      must be provided with a formal set of instructions.
      I could not imagine a barrister not receiving a formal set of instructions and a properly prepared set of papers, even in the slightest case I ever dealt with. I stress that this case involved a multi-million pound prosecution.
      The report is worrying, so no wonder the Government have agreed to set up a further investigation as to whether Customs and Excise should lose its status as a prosecuting authority. However, I must point out that my hon. Friend the Member for Newcastle upon Tyne, Central was wrong to say that Customs and Excise did its best not to tell us about the Doran case. I asked questions about it when we had Customs and Excise staff in front of us, but our own Clerk was worried as to whether the sub judice rule still applied and stopped the line of questioning. Customs and Excise staff made the point that they detect and prosecute many cases each year involving smuggled goods of great

      463
      value. Those prosecutions are usually successful and those who are successfully prosecuted receive severe sentences. The picture is not gloomy—indeed, it is usually one of success—but this case is worrying.
      Mr. Cousins: Is my hon. Friend concerned, as I am, that the Doran case is not the only recent one to involve large sums of money and a Customs prosecution that collapsed? A similar case in Portsmouth and a trial in Middlesex Guildhall both had a similar result, so perhaps we should consider not simply the issues involved in the Operation Steeler case, but a more widespread and fundamental problem.
      Mr. Kidney: Yes, I am concerned that the public hear that people who have done terrible things have walked free from court and that Customs and Excise staff, who did their job properly to catch those people, see that an unsuccessful prosecution is the result of their work. That is worrying, which is why the investigation is welcome, and why the Government's decision to consider whether Customs and Excise should continue to be a prosecuting authority is the right one. I agree with that.
      The Sub-Committee's work in considering the various agencies of the Treasury is immensely useful to us and to the agencies and organisations themselves. I am pleased that we are to go back to Customs and Excise later this year to see how it is getting on, not least with closer working.
      3.18 pm
      Mrs. Ann Winterton: In view of the time, I shall be as brief as possible and shall not touch on several issues that I should have like to have discussed, such as alcohol and tobacco smuggling and the new problem with petroleum, to which my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) referred and which has to be tackled. I shall leave them on one side as they have been well explored.
      In briefly congratulating the Treasury Sub-Committee on its report, I shall take a slightly different tack. I welcome the opportunity to debate the work of Her Majesty's Customs and Excise on tackling the smuggling of drugs. It plays a vital role in the detection and prevention of drug smuggling in order to reduce access to drugs in Britain.
      Front-line customs officers undertake a thankless task, dealing with verbally abusive and often aggressive travellers. Routine searches can lead to disturbing and distressing discoveries, as was tragically evidenced on 12 June at Dover. I have observed that Customs officers undertake their work efficiently and effectively, and I pay tribute to them for the role that they undertake on behalf of us all.
      With regard to the performance of the Department in relation to drug smuggling, its efficiency is clearly demonstrated by the Department's increased use of intelligence-led operations. Customs and Excise has been successful in applying its specialist skills to the fight against commercial smuggling. Between April and December 1999, the Department disrupted or dismantled 35 smuggling organisations trafficking in class A drugs, and was on course to meet its public service agreement target of 60 organisations by March.
      464
      The Department was also on course to meet its target of preventing class A drugs with a value of £1.2 billion from entering the UK during 1999–2000. In 1998, the Department seized 88.3 tonnes of drugs, including a rise of more than 25 per cent. in the amount of cocaine and amphetamines seized in the previous year.
      However, as has been mentioned in the debate, the number of successful prosecutions for drug smuggling has fallen significantly in recent years, and average sentences have increased by just one year to five and a half years. The new data collection system will give us a better understanding of the success of the 4,000 prosecutions brought by Customs each year, but serious questions have been raised recently about the Department's ability to prosecute offenders.
      Following Judge Butler's inquiry into the collapse of the case against Brian Doran and Kenneth Togher for smuggling cocaine with a value of £34 million, his report last month found that mistakes were made by the Customs investigation team and the Customs solicitors department. Judge Butler found that the solicitors department is "simply not sufficiently resourced". He reported:
      These officers I saw I would describe as hard working and dedicated…for the kind of pay most lawyers would describe as derisory.
      A review of the Department's role in prosecutions and the possibility of transferring customs cases to another prosecuting authority is due to be completed in October this year. I ask the Minister for assurances that the lessons of the report will be learned.
      A wider issue of resourcing gives rise to concern. The problem of drugs in Britain continues, and their availability is not declining, despite increasing seizures by Customs and Excise. Home Office research shows that the street price of most types of drugs continues to fall, yet in 1999 the estimated street price of Customs cocaine seizures amounted to more than £250 million.
      Customs officers face diverse, more organised and more sophisticated challenges in suppressing the flow of illegal drugs. The Department's estimated expenditure on drugs enforcement in 1999–2000 is £209 million. However, the number of staff allocated to tackle the problem has decreased. I accept that intelligence work is crucial to the success of operations, but there is no question that front-line resources are needed to support the intelligence services.
      The Public Accounts Committee took a detailed look at the Department's role in dealing with the drugs menace. In its report in November 1998, the PAC concluded that, while intelligence-led investigations may provide a deterrent to some commercial drug smugglers, it is
      nevertheless important to maintain a sufficient anti-smuggling presence at ports and airports to provide a perceived risk of detection, particularly for smaller-scale and opportunist smugglers.
      I acknowledge that staffing levels in the service declined under the previous Government. The level of Customs and Excise staffing has fallen further since 1997, particularly in intelligence and anti-smuggling. I refer the hon. Member for Erewash (Liz Blackman) to page 26 of the departmental report, where the staffing statistics clearly show that there were 14,364 staff years in 1997–98, when we left office, and that the forecast plan for 2001–02 is for 13,482 staff years. There it is, in black and white.

      465
      Front-line anti-smuggling officers are engaged in efforts to protect society against drugs, firearms, explosives and paedophile material. The Department believes that it can make more of an impact by deploying teams of anti-smuggling staff to different ports and airports. However, the PCS union reports that front-line staff feel a mounting frustration because more could be done to stop the tide of drugs entering the country.
      The PCS is aware that drug smugglers switch their resources to where they think there is the least risk of getting caught. With a number of smaller provincial airports and ports not being staffed on a constant basis, the union believes, and I agree, that there are increased opportunities for smugglers. A MORI poll commissioned in 1999 revealed public comments about the lack of adequate staffing at smaller airports and harbours.
      The PCS estimates that an extra 500 front-line officers would allow the Department first, to respond more strategically to known risks; secondly, to invest more resources in testing medium and low-risk traffic in order to give an assurance that that traffic did not pose a significant threat; and thirdly, to enhance the deterrent effect provided by a visible uniformed presence in preventing the import of drugs and reassuring the public.
      The PCS expressed concern that the Department was underestimating the effectiveness of additional staff, and that the reduced level of resources was not a sufficiently considered response to the threat from the importation of drugs.
      The lack of staff is deeply worrying. It reveals a fundamental misunderstanding of the drugs problem. In their White Paper, the Government identified four issues that needed to be tackled: first, helping young people to resist drug misuse in order to achieve their full potential in society; secondly, protecting our communities from drug-related anti-social and criminal behaviour; thirdly, enabling people with drug problems to overcome them and lead healthy and crime-free lives; and fourthly, to stifle the availability of drugs.
      The final aim relies heavily on the ability of Customs and Excise to reduce the amount of drugs coming to, and crossing, the UK, through seizures and by disrupting trafficking organisations.
      The crucial balance is between addressing supply issues and demand issues. The Government have pledged to tackle the supply of drugs,
      shifting the emphasis from dealing with the consequences of drug misuse to prevention of that misuse.—[Official Report, 25 May 1999; Vol. 332, c. 162]
      However, although they are ploughing £217 million of new money into the delivery of their strategy, all that money is allocated to dealing with the demand side. Customs and Excise, the major player in achieving the fourth strand of the Government's strategy, has not been allocated sufficient extra funding, despite the Department's track record in delivering increased seizures cost-effectively.
      Initiatives to tackle the demand for drugs must be combined with initiatives directly to stifle drug availability in Britain. The PCS believes that if more resources were allocated to anti-smuggling staffing, the amount seized would increase substantially. I accept that additional staff for Customs will not alter availability
      466
      unless demand is adequately addressed, but the funding designed to deliver the Government's aims in relation to drugs would be much more effective if it encompassed efforts to stem the problem at its root.
      The focus on the recovery of hard drugs is also a worrying factor. In 1998, the seized quantity of cocaine rose, but there was a 28 per cent. fall in the quantity of seized cannabis resin. The shift of resources away from so-called soft drugs is in line with the Government's strategy, but there are downsides. The PCS has warned that the decreasing seizures of soft drugs is demoralising—it must be; they are, after all, illegal—undermining what is meant to be a tough Government stance against drugs. The PCS also warns that more sophisticated smugglers are exploiting the move away from targeting soft drugs by concealing hard drugs within consignments of soft drugs.
      The work of the Department must be seen in the context of the overall anti-drugs strategy. Customs and Excise cannot work in isolation, and it must be resourced adequately to play its part fully and effectively. Visibility and effectiveness are not mutually exclusive. Intelligence gathering is important, but the Government should not underestimate the effective deterrent that visible customs officers provide to smugglers. However, the PCS considers that the existing resources are too low to deliver both options effectively.
      The Department is rightly expected to deliver higher targets in order to prevent a greater amount of drugs from reaching the United Kingdom, but consideration must be given to the staffing levels which can best achieve those aims. Concerns have been raised by members of the public, the Public Accounts Committee and the PCS.
      I urge the Minister urgently to examine staffing levels and to provide additional resources to stop drugs reaching our streets.
      3.31 pm
      Mr. Nick St. Aubyn: We have heard a great deal this afternoon from Labour Members about the Government's crackdown on evasion and the increasingly oppressive regime but, perhaps typically of this Government, we have heard nothing about the principles of Government by consent, which must include taxation by consent.
      There is increasing evidence not only that the general tax burden is reaching a level that people do not accept is fair and just, but that the level of taxes being imposed, particularly in this area, is at the heart of the problems of collection that have been described this afternoon, because more and more people feel that the amount being claimed from them is grossly unfair.
      At the back of the Select Committee's report is an account of the evidence given by the Tobacco Manufacturers Association, in which it points out that the charge on a packet of 20 cigarettes had risen from about £1.50 a packet in 1993 to £3 a packet by January 1999. It points out that the differential from the average throughout the other EU member states has risen from less than 50p to more than £1.75. The result is that, in real terms, the amount of revenue coming from tobacco taxes since 1992 has fallen—a doubling in the tax on tobacco and a fall in the revenue yield.

      467
      We heard from Labour Members how that was partly due to the white van phenomenon, but, evidently, the big criminal element has found that the profits to be made at those much higher levels of taxation are so attractive that it has decided to become involved. By raising taxes to such a high level, the Government have made an opportunity for criminal activity, which excessive taxation has been proved to create many times before.
      If we are to have Government and taxation by consent, we must observe the proper way in which taxation is to be decided and debated. It was striking in the course of the Finance Bill Committee, on which some of us recently served, that the Government refused to give us the pertinent information from the Taylor report when we came to debate the level of tobacco duty.
      Before we consider that, it is worth bearing in mind the fact that, if the Government had succeeded in maintaining the level of duty at the level they inherited, the yield from tobacco duty in the first three years of this Parliament would have been £3 billion higher than was actually achieved. That is £3 billion which might have gone into the health service or to meet the other needs of our society but which has been lost as a result of the Government's failure to follow a successful strategy in achieving not just the highest rate of tobacco duty, but the optimum level.
      As the Select Committee pointed out, it, too, was disappointed that the Taylor report was not made available; that several key witnesses told it that they had not been consulted by Mr. Taylor; and that the advice tendered by Mr. Taylor was apparently personal and confidential to the Chancellor. The Committee concluded:
      We consider it unacceptable that the Treasury should commission a review of an important area of Government policy…without allowing Parliament access to the review's conclusions.
      The only person who had access to the conclusions was the Chancellor, who is described by one of his colleagues in the Government in today's Daily Express as being "power-crazed" and "bonkers." Should we really allow such an important report to be spirited and squirrelled away by the Chancellor to be interpreted purely in terms of his view of the situation, rather than having the type of open and clear debate that is needed if we are to develop an effective policy—not, as I say, of having the highest level of tobacco duty in Europe or anywhere in the world, but of having the optimum level, which would yield more revenue to spend on the services where it is needed?
      3.36 pm
      Dr. Peter Brand: I am not accustomed to speaking on Treasury matters, but I was struck by the Select Committee's report, especially paragraphs 59 and 87, and the Government's response, which reflect the concern expressed today that we should have enough front-line officers to deal with smuggling. Clearly, we welcome the Government's initiative, particularly in concentrating on tobacco smuggling. The Government's response to the Select Committee's concern was the £209 million and the 1,000 extra staff to be employed, and that is welcome.
      I have a particular interest in smuggling since my constituency has 60 miles of coastline, five harbours, two airports and many large houses which were built with profits from smuggling. In the midst of the 18th century, we employed 120 Customs officers, but now we have only 3.5. Those 3.5 people do an excellent job because
      468
      they are equivalent to community policemen. They work through harbour-masters and yachtsmen, and people give them soft evidence and intelligence, so they have been extremely successful. We are a high-risk area, but luckily, a low activity area because we pick matters up before anything happens.
      I am concerned that we have lost two of our allocation of 3.5 Customs officers to serve permanently at the container port in Southampton. I have made some inquiries and the same sort of thing has happened elsewhere on the south coast. There has been a 60 per cent. reduction in the Hamble and further down the coast.
      It is important that yachtsmen see Customs officers around. Not only do they have a deterrent effect: law-abiding yachtsmen expect to be able to make easy contact with a Customs officer to pass on matters of concern or strange patterns of behaviour informally, without having to telephone an office and make a formal complaint. It is important that Customs and Excise should not lose sight of the invaluable role played by the local Customs officer, as opposed to the specialist teams that can be drafted in.
      I have written to the area controller, and he assures me that the work will still be done, with specialist teams being drafted in when necessary. But they will arrive by ferry, and by the time they are on the ferry everyone will know they are coming. That is not the same as having people in the locality who are integrated with the local community and who have a visual presence. I urge the Minister to consider the policy, which has served the police badly. It is the equivalent of taking policemen out of the community and sticking them into cars and specialist teams.
      If we go along that route, we may see good performance indicators, but in a way such indicators are those of failure. They are signs that we have virtually allowed smuggling to occur, after which we make arrests. Deterrence, and getting the community on the right side, is the way in which a stretched resource can be used most effectively.
      3.41 pm
      Mr. Oliver Letwin: We have had an interesting debate on a most interesting report. Apart from anything else, the debate has brought out the deep truth of a statement that is lodged at various parts of the report. It has not been brought out with particular prominence, but it is there. It is that the range of activity within Customs and Excise is positively daunting. I think that the Select Committee observes that it sees no argument against a merger because the range of activity within each of the two bodies—the Inland Revenue and Customs and Excise—is greater than the difference between the two bodies.
      As my hon. Friend the Member for Congleton (Mrs. Winterton) said, in one area of its activities Customs and Excise is a sort of border police force, while in another there is a group of people raising VAT, a standard tax. I marvel at the fact that Customs and Excise can do anything at all given the range of its activities, and that anybody can run it. I hope that it will not be taken by members of the previous management as too great an indictment of their activities that hon. Members criticise them. I doubt whether their critics would have been able to do a better job than they did. We impose on them an incredibly difficult task.

      469
      We have a real problem on our hands, and the Select Committee has provided a valuable service in drawing attention to some parts of it. I wonder whether the full scope of the problem emerges from the report. I wonder also—I shall suggest that it is not the case—whether the full scope of the problem arises from the operation of Customs and Excise. I think that a great part of it is attributable to us in Parliament—to government and policy rather than merely to operations.
      I do not know whether a merger is appropriate. There has been a long-running debate. The members of the Treasury Sub-Committee have investigated the matter, under the chairmanship of my hon. Friend the Member for West Worcestershire (Sir M. Spicer), and on the whole have suggested that merger would be a good idea. The most important point that the Sub-Committee makes is that neither it nor we are in a proper position to debate the subject: the findings of the one serious investigation that has been conducted by those who are in the know on the inside of Whitehall have not been revealed.
      It is a tribute to the tact of my hon. Friend and his Committee colleagues that the report is quite cautious in the way it describes the matter. I think that the failure to reveal the findings of the investigation amounts to something close to contempt of the House. What I take to be a serious piece of administrative investigation was called for by a responsible body, a Select Committee, and it was not yielded up.
      I am surprised that the Sub-Committee, through the Chairman of the Select Committee on the Treasury, is not seeking to have the House demand it. I understand that the House would be in a position to make it a contempt not to yield it up. I think that as a general principle our Select Committees are still too timorous about their demands on Whitehall. I understand the constraints within which they operate, but I think that the report should definitely be before us.
      It may be that there is some reason why the Government are not willing to yield up the report, even after the embarrassments of the debate. If that is the position, there is only one proper solution, and that is to commission a new full-scale inquiry on the basis of an open book, so that everyone knows what is being done, and to publish its findings. I suspect that until that is done we will not know whether there is merit in the Select Committee's intuition that there should be a merger. We maintain an entirely open mind on that issue until a full-scale inquiry has been conducted.
      If the Paymaster General is not willing to yield up the earlier report because, as the Select Committee speculates, it is inadequate, or, indeed, for some other reason, I hope that she will say that she will commission a full-scale and open inquiry. We would then at least have the basis for a proper debate.
      The scale of the smuggling problem has emerged clearly in the debate, and it is extremely serious. My right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke), with characteristically brilliant allusiveness, took us back through the ages and reminded us that smuggling is not a new phenomenon. It is not since I was a child that I have heard the Kipling verse, but my right hon. Friend is correct to say that people were concerning themselves with smuggling long ago. I think
      470
      that I can slightly outdo him in historical reach, by saying that smuggling was a very serious problem in Anglo-Saxon times. In those days the witan much concerned themselves with the subject of smuggling. So we have about 1,000 year's worth of experience of serious smuggling.
      The fact is that the scale of the smuggling catastrophe—I use that word advisedly—has reached proportions which in some parts of Britain threaten the foundations of ordinary society. I am not speaking of loss of income. Customs and Excise costs about £1,000 million a year to run and it raises about £100,000 million a year in tax. It loses about 2 per cent. of that in forgone revenue—I hesitate to say this, but
      Dawn Primarolo: It is a pretty good record.
      Mr. Letwin: As the Paymaster General says from a sedentary position, it is a pretty good record. If we asked throughout the world how many people manage to collect that much money spending that little money and with that amount of loss, the answer would be not many.
      The mere loss of revenue is a trivial item compared to the effect of smuggling on ordinary society and ordinary people in many areas in the southern part of Britain, and increasingly throughout the rest of Britain. The relationship of government to the governed and the acceptance by the governed of the legitimacy of things that we do in this place and which government imposes upon them, is a critical component of the coherence and stability of our society. It is bad enough when professional crooks bring in large loads of smuggled goods, but perfectly ordinary people are going abroad and, as a matter of course, buying stuff, not declaring it, giving it to friends and relatives or selling it openly in pubs. One such case has been mentioned and that could be replicated by hundreds of thousands of others.
      I do not say that the activity has gone so far as to constitute a social crisis, but we have the beginning of the end of the proper relationship between governed and government, and that is a catastrophe. We used to have a country in which we prided ourselves on that relationship working extraordinarily well. We used to smile ruefully about people in Italy who did not pay their taxes. We thought that that was not the sort of thing that happened in Britain.
      We now have on our hands enormous criminal activity by perfectly ordinary people who otherwise lead respectable lives. That is a very bad situation. I do not believe that any amount of extra effort by Customs and Excise, machines or anything of the kind—my hon. Friend the Member for Guildford (Mr. St. Aubyn) was right about this—will solve the problem. It can be solved only by trying to redress in some way over time—and with all the difficulties that this implies—the great gap between our levels of excise and those in nearby ports. Otherwise, the problem will remain and no amount of effort by Customs and Excise officers will cure it.
      Liz Blackman: How does the hon. Gentleman answer my point that, no matter how great the reduction in tobacco duty, cheaper goods, or goods with no duty, will always be available, and big business will ensure that they fill any gap?
      Mr. Letwin: It is obvious that I did not make myself clear. I accept that organised criminal smuggling will

      471
      probably continue, whatever the level of duty. Smuggling has probably existed for as long as time. However, the propensity of hundreds of thousands—perhaps millions—of otherwise respectable citizens to engage in criminal activity, which is the social disaster that I am describing, arises almost exclusively from the discrepancy in excise rates. That should be a matter of mutual anxiety. It is not a party political issue. We should all be concerned about what we do to ordinary people. I accept the point about big business smuggling, but it was not my point.
      Mr. Cousins: I am following the hon. Gentleman's argument closely. I am sure that it has occurred to him that he is calling for harmonisation of tax rates.
      Mr. Radice: EU harmonisation—oh dear!
      Mr. Letwin: I am calling for action by a sovereign country to deal with difficulties that its citizens face. That is different from the proposition that the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) may support, and that the right hon. Member for North Durham (Mr. Radice) certainly supports: that a foreign power in Brussels should tell us how to do it. The difference is signal.
      Mr. St. Aubyn: Is there not all the difference between tax harmonisation imposed by Brussels and tax competition, which is a global phenomenon that no Government can afford to ignore?
      Mr. Letwin: My hon. Friend is absolutely right. When we consider the Finance Bill in due course, we shall again debate double tax relief, which shows the extent of the Government's departure from tax competition. However, I shall leave that point aside.
      I want to consider a vital point that has emerged not from the debate but from the report: the role of Customs and Excise, not as a policeman, but as a tax gatherer. The Treasury Sub-Committee, piously but rightly, states that we need to move to a simpler system with which it is easier to comply. I use the word "piously" because neither the Sub-Committee nor the Government have devised good measures for putting that into practice. However, the aim is noble.
      It is one of Britain's better known secrets that the Conservative party has devised a set of plans for a simpler system. Now that people are again interested in the Opposition because the Government are crumbling around us, it is possible—I put it no more strongly than that—that the Government may pay attention to the admirable plan that we presented some time ago. It has 10 points, because that is how such plans are devised—I pay no attention to that. They are not the only 10 points that are worth considering; perhaps they are not even the 10 most important points, but we should take concrete action. I shall therefore outline 10 easy measures.
      First, there should be six weeks at the end of a VAT quarter for every business to complete its VAT returns. I have spoken to dozens of firms and representatives who have made it clear that that is vital. They do not have enough time to complete their forms.
      Secondly, we need a new, independent business protection unit so that firms that are about to go under have a sympathetic ear, and can prove to that unit that
      472
      they will surmount the difficulties and not fail. That is preferable to Customs and Excise acting as the creditor of first resort and the party that pulls the business under when it gets into difficulties. Customs and Excise, after contact with the special unit, should be willing to wait for its money.
      Thirdly, there should be a presumption that VAT officers will give binding advice within a specified period and in advance of a contemplated action. People can thus know whether their proposals are legal.
      Fourthly, there should be symmetry in payments. I am sure that, like me, hon. Members of all parties frequently receive complaints about that matter. Why does not Customs and Excise pay the same interest rate when it is late with its payments or repayments as taxpayers who pay Customs and Excise late?
      Fifthly, the detail in VAT returns needs urgent review. Those returns are unnecessarily onerous.
      Sixthly, the disclosure limit for errors is old fashioned. The Government pride themselves on modernising; I do not like that idea, but the Government believe in it. A figure of £2,000, which was set many years ago, is clearly ludicrous and should be increased.
      Seventhly, we need a review of, or consultation exercise about, the future of the capital goods scheme. It used to work, but we now live in a world of computers, and the limits do not reflect the cost of computing.
      Eighthly, something should be done about the payments-on-account scheme. The option of 12 monthly direct debit payments is available from any utility and most other people with whom one deals, but not Customs and Excise. Why not?
      Ninthly, the deregistration threshold should parallel the registration threshold in some way.
      Tenthly, and most importantly, there should be no question, except in the most extreme circumstances, of retrospective legislation to alter the ground rules to avoid avoidance schemes. I say that especially in the hearing of the Paymaster General because, of all the holders of her post in British history, she takes the palm as the most assiduous pursuer of avoidance schemes. Let us promise that we will not go backwards and penalise people for past activities that were legitimate when they undertook them. That applies to Customs and Excise legislation as much as to the Inland Revenue legislation that we shall debate when we consider the Finance Bill.
      I have reached the end of my remarks and the allotted time. I hope that when the Treasury Sub-Committee considers Customs and Excise again, it will emphasise the critical importance of openness and use every power at its disposal to get the Taylor report published. That report has been mentioned often; it is a mythical item and we do not know its contents any more than we know those of the study on merger. It is a shame and a disgrace that the House has not seen it.
      3.56 pm
      The Paymaster General (Dawn Primarolo): We have had a long and detailed debate, using the hook of the vote on Customs and Excise. Many detailed points have been made. In the short time available, I shall not be able to refer to them all. I shall consider the 10 points that the hon. Member for West Dorset (Mr. Letwin) outlined. However, my remarks will concentrate on the main subjects that have been raised.

      473
      My right hon. Friend the Member for North Durham (Mr. Radice) briefly set out three broad basic topics, which other hon. Members developed. They were the merger, smuggling and compliance. Compliance broke down into two subjects: the cost of compliance for business and its cost to the Department. Many hon. Members concentrated on the internal systems of Customs and Excise and its ability to respond.
      I was grateful to the right hon. Member for Cities of London and Westminster (Mr. Brooke) who, with others, referred to the tens of thousands of people who work in the Department. As the hon. Member for West Dorset pointed out, they collect more than £100 billion—40 per cent. of all tax collected for the Government. They do that very efficiently, at a cost of around 1 per cent. As the hon. Member for West Dorset also said, we concentrated today on what was not collected, but when we consider the record as a whole, it is very good.
      The Treasury Sub-Committee is ably led and chaired by the hon. Member for West Worcestershire (Sir M. Spicer). I take its report seriously. I cannot say that I enjoyed reading it, or that I felt entirely relaxed as today's debate unfolded. However, I want to try to give a positive response. I think that we owe that to those who are employed by us, and who discharge certain duties. Moreover, serious issues need to be addressed.
      I smiled when the right hon. Member for Cities of London and Westminster gave a rather odd example of the rules some years ago. Until recently, a rule stated that French dogs used for tobacco detection purposes were not allowed on our ferries because of our quarantine arrangements. Fortunately, the matter now seems to have been resolved.
      As my hon. Friend the Member for Erewash (Liz Blackman) said, Opposition Members should be extremely careful before criticising the current Government. It was their Government who reduced Customs and Excise staff by at least 3,000. I have been the Minister responsible since the election of 1997. As my hon. Friend the Member for Erewash pointed out, 300 officers dealing with the smuggling of drugs were about to lose their jobs as a result of plans that we inherited from the last Government. We did not proceed with those proposals, let alone the large numbers involved.
      Mrs. Ann Winterton: Will the Minister give way?
      Dawn Primarolo: Yes, but let me say first that I wish only to put the record straight. I do not want to pick an argument with the hon. Lady or her hon. Friends. I think that everyone who has spoken is concerned about smuggling, whether it involves drugs, tobacco or anything else.
      I will give way to the hon. Lady, because I referred to what she said.
      Mrs. Ann Winterton: The Minister is very gracious.
      I take the Minister's point, but the figures to which she refers were estimates for the period after the general election. When her Government ensured that those 300 officers would remain, what they did not do was increase resources. Savings had to be made elsewhere in the service.
      Dawn Primarolo: The hon. Lady is not quite right. We had to save some of the money, because the Department
      474
      was within its budget, but movements occurred rapidly in the Treasury to deal with the pressure points, according to where we thought they were.
      Many hon. Members referred to the Financial Times report that asked whether £1 billion, £2 billion or some other sum was missing, or unaccounted for, in the context of excise control regimes. They also referred to the announcement that I made on Friday. The figure given in the Financial Times is incorrect. Let me tell the House, as clearly as I can, how this happened, how it came to my notice, and how I intend to proceed.
      An interim report—an internal report by Customs and Excise—was ordered by the new chairman of Customs and Excise, and was received by me last Friday. It identified serious weaknesses in the Department's control of excise duty collections. The right hon. Member for Cities of London and Westminster repeated today the fears that he expressed when the rules were introduced, on the commencement of the single market. A particular problem relates to the mechanism for releasing spirits and wine that are subject to duty from bonded warehouses.
      There have been numerous prosecutions, resulting in about 100 convictions in connection with one major group. Nevertheless, the report concluded that there had been significant revenue losses, which were deemed principally to have happened in the three years following 1995.
      In 1998, changes were made to the regime, but it is not clear whether the arrangements are tight enough. I believe that hundreds of millions could potentially be lost. However, having been faced with something so serious, I believed—and I was supported by the chairman of Customs and Excise—that we should act immediately on receipt of the results of the internal inquiry. I decided that we should conduct an external investigation as quickly as possible.
      The National Audit Office had been informed, and was already working with Customs and Excise in an attempt to quantify the losses and identify the weaknesses in the control system. I have given an indication—and I have notified Her Majesty's Opposition—of what I would expect the inquiry to cover. I would expect it to cover the policy, legislation, systems and resources within Customs and Excise relating to excise holding and movements, and to determine weaknesses and gaps, including those relating to the efficiency of the system of bonds and guarantees. I would also expect it to discuss how best to establish clear internal accountability for the securing and protecting of departmental revenues. In particular, I would expect it to ask whether there should be a single point of accountability in Customs and Excise for cash revenue management. Finally, I would expect the inquiry to consider how best to ensure that sufficient weight is given to protection of revenues as a key criterion in Customs and Excise handling of fraud investigations.
      Any shortcomings in the system, and any information relating to resources—prosecutions are still taking place, as are Customs and Excise responses—will be referred to the investigation at the conclusion of the cases involved. I will ask the leader of the inquiry to keep me informed, and to tell me whether immediate steps are planned. I support the appointment of someone who will be able to deal with the systemic problems that may arise, take a commercial approach, and deal with the issues directly. I will, of course, keep members of the Select Committee informed.

      475
      Before turning to the issues of smuggling, merger and compliance, let me make a few general remarks about Customs and Excise. Although we all understand that the focus of today's debate is on particular areas of Customs and Excise, it is important—for the benefit of those who follow our proceedings, especially those working for the department concerned—to acknowledge what the department has done well. As I have said, it has collected more than 40 per cent. of central Government revenue, at a cost of about 1 per cent. Key agencies are reducing the bulk supply of drugs to the United Kingdom market, and tackling the major trafficking problems.
      The Department is a major element in the Government's anti-drugs strategy. Its intelligence-led deployment of officers in the United Kingdom and abroad prevented some £1.24 billion worth of drugs from reaching the UK last year. It has also dismantled and disrupted trafficking organisations.
      I do not want to undermine the credibility of the hon. Member for West Dorset among his hon. Friends, but, as he said, we are talking about a Department that deals with the protection of society—in the context of drugs and smuggling—with the collection of VAT, and with the whole excise duty regime.
      As a Minister, I consider that what is crucial is that I understand what the Department does best, what it should do, what it may be doing that it should not do—what is inappropriately located there—and to build on that understanding. It is the policy objectives that I should pursue. I said to the Committee on the question of merger that I believed, as the Minister responsible, that the vast resources and time used to put Departments together was a diversion—if Members will excuse the pun—from the true objectives, which must be to ensure that the Department reaches its objectives.
      I am not saying for a minute—no one could, at the end of the debate—that no things need correcting in the Department. We need to look seriously at that. The new chairman of Customs and Excise has come from the private sector. A third of those on the new board are new members. A third come from the private sector. The remaining third have experience in the Department. It must drive change forward.
      I welcome the comments by members of the Select Committee on the Treasury that they intend to return to the issue and to look again at Customs. The exercise that they have conducted already has been extremely useful, even though I did not entirely agree with some of their conclusions. Nothing is ever closed. The constant striving to ensure that the Department does its work properly is crucial.
      The Department faces huge challenges, particularly in relation to smuggling. Comments were made about the scanners, the increased resources and how we are tackling the problem. It is important to say that the pressures on the Department, and what it faces, are never more starkly seen than in Dover. There were 1.7 million freight movements through the port last year and that is increasing. It is a truly herculean task for Customs and Excise staff to keep a
      476
      balance between trade flowing swiftly through the port and countering smuggling. Organised criminal gangs now dominate the smuggling of drugs, spirits, cigarettes and, most tragically, as we are seeing, people.
      The 54 people from southern China who died in a container that was searched at Dover earlier this month were discovered by Customs officers. Hon. Members will perhaps be able to imagine the distress of those officers on discovering such a sad and tragic cargo. I have nothing but admiration for their professionalism in that front-line work, but the challenge to us with regard to smuggling is this. Hon. Members have sought to characterise it as a duty problem. As my hon. Friend the Member for Erewash and many others have pointed out, even without any duty at all, that activity would continue. If we dealt with duty, that would continue. We must deal with the criminals and what their activity does to our communities and to legitimate businesses. The job will continue to be more difficult.
      Obviously, there is always confusion between what is called the white van trade—those who go opportunistically—and other smuggling. The first review that the Government undertook—the alcohol and tobacco fraud inquiry—gave more resources, provided more Customs officers and targeted specifically the white van trade, compared with the systematic and criminal importation of vast amounts of tobacco. That requires a different response. The £209 million will provide that.
      The scanners are there. Some of them will be mobile, some will be static. We had to go through a process of ensuring that we handled the tenders correctly. We have to publish details of who contracts for them. That equipment is there primarily to find smuggled goods. The immigration service believes that there are more efficient ways of detecting the smuggling of people. None the less, there will need to be agreement because undoubtedly, at times, people will still be found. That is a subject for discussion between the Home Office and the Department.
      On the wider questions of VAT compliance and what needs to be done, I take on board everything that the Committee has said. We are rooting out inefficiency, making the system efficient, minimising burdens on business and streamlining as much as possible how we operate as a Department to deliver the resources. All of that is under way. There are many examples—which I cannot now give, but I have a feeling that I will be in front of the Select Committee again on the subject anyway—of closer working and how it is developing and blossoming. It shows how we can bring the Departments together culturally and how we can ensure that we drive that forward.
      I apologise that there are still questions of—
      It being three hours after the commencement of proceedings on the motion, the debate was concluded, pursuant to Resolution [27 June]
      Question deferred, pursuant to paragraphs (4) and (5) of Standing Order No. 54 (Consideration of estimates &c.).

  ESTIMATES DAY
    Class XII, Vote 3

      Social Security
      [Relevant documents: Third Report of the Social Security Committee, Session 1999–2000, on Medical Services, HC183, and the Government's response thereto, Cm 4780; and the Social Security Departmental Report: The Government's Expenditure Plans 2000–2001 to 2001–2002, Cm 4614.]
      Motion made, and Question proposed,
      That a further, revised sum, not exceeding £1,110,424,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges which will come in course of payment during the year ending on 31st March 2001 for expenditure by the Department of Social Security on administration, for agency payments, expenditure incurred as part of the Welfare to Work initiative, expenditure on behalf of the Department of Health, and for certain other services including grants to local authorities and voluntary organisations and other organisations—[Mr. Belts.]
      4.16 pm
      Mr. Archy Kirkwood: It is a pleasure and privilege to open this short debate under the estimates on the important subject of the provision of medical services to the Benefits Agency. I have felt for some time that Parliament does not take enough time to revisit some earlier policy decisions taken in primary legislation. If that is true of primary legislation, it is certainly true of secondary legislation and the administrative systems within the departmental structures of Government. We need to look at the way in which primary and secondary policy is implemented on the ground through the administrative procedures.
      It is an appropriate subject for debate under the estimates because, as the House will know, each year, some £25,000 million is devoted to providing for those who have a disability or long-term sickness. That is a large part of the Department of Social Security budget. In 1998, a contract was entered into with Sema, a private sector company, to provide medical advice for decision makers within the Benefits Agency. The contract totals some £305 million. It is for five years, with a possible extension of two. Therefore, the subject raised on the estimates day is an appropriate one.
      My colleagues on the Select Committee on Social Security are grateful to our colleagues on the Liaison Committee for allowing us to allocate time for that subject. It is raised on the basis of the Social Security Committee's third report of the current Session, which was published recently. It was occasioned by the concern that came through clearly to my colleagues on the Select Committee—from a variety of different sources, it must be said.
      In October and November, the Under-Secretary of State for Social Security, the hon. Member for City of York (Mr. Bayley), bravely made himself available for two evening sittings and had an uncomfortable time from a lot of Members, who were visibly distressed by and angry about the treatment that some of their constituents were getting, so we had that evidence available to us. Other evidence came to the Committee through our contacts with pressure groups and disability groups—the National
      478
      Association of Citizens Advice Bureaux and the like—which registered real areas of discontent about the way in which medical services work was being done. The casework from colleagues, taken together, led us to conclude that we should look at the provision of medical services.
      We were able to take what we believed was a relatively short time for what we believed would be a relatively quick report. After placing the usual advertisement soliciting evidence from interested parties, we soon realised that the report could not be a cursory one. We received a staggering volume of evidence, which was staggering also in the extent and depth of the difficulties that it revealed. There was very clearly great disquiet in all parts of the medical services and Benefits Agency service delivery systems. Therefore, in November 1999, the Committee agreed to produce a report, which has now been published.
      The Government have published a response to our report. I acknowledge that the Under-Secretary has a very good track record on the subject—for which he is responsible. Although it may embarrass him to know this, when the Committee went to various parts of the territory to discuss the subject, people spoke highly of him. It was recognised that, before he became a Minister, on his own initiative, he worked with the National Association of Citizens Advice Bureaux in York on this very subject. We are lucky that we have such a Minister. The trouble is that Ministers who are good and expert on subjects often move on. We shall have to work on the worst case assumption that he will soon be a Cabinet Minister and that we will be dealing with someone else.
      The general tone of the Government's response to our report is positive. I detect the Minister's fingerprints on some of that response, which is welcome. I shall deal with the Government's response in a bit more detail in a moment.
      It is fair to say that the system was never perfect. There was much disquiet also about the old system—the Benefits Agency medical services system—which was operated in-house and entailed medical evidence being given by officers employed by the Department of Social Security. It is also fair to say that we are bound to have some difficulties and complaints with any system purporting to undertake 1 million medical examinations annually. It would be foolish to have any other expectation of such a system.
      In fairness, it is also true to say that the contract has been running for a relatively short time. It was an ambitious contract, and one could argue that it has not really bedded down yet. Additionally, as some applicants for disability benefits who are rejected—because they do not meet the eligibility criteria established by the House—are disappointed, an element of disappointment and anxiety is built into the process. We have to take that into account, and to be careful in reaching judgments and comparing the system with the previous one.
      In paragraph 100 of their response, the Government quite candidly admit that the benefits that they had hoped to achieve from contractorisation have not been realised. I am sure that the Minister would say that it is too soon to judge that and that the contract has another three years—with an additional two years, if necessary—to run. However, at least the Government have made that admission.

      479
      Nevertheless, I think that the House is right to consider carefully how the decision was taken to privatise the medical services decision-making process. In retrospect, I think that the Government were wrong to take the decision so quickly. The Minister will know that, a few short months after the new Labour Government took office, some additional requirements were added to the brief. Admittedly, that happened after the previous Government had examined the issue for some time and had well developed plans.
      I really wonder, however, whether a root and branch review was conducted of the proposals before the decision was taken, particularly in relation to advice from pressure groups and those who were going to be part and parcel of the system's daily work. Although all the contracts looked fine, the lawyers had crawled over them and the work was done professionally, with the benefit of hindsight, I do not think that anyone who had ever advised someone applying for disability living allowance or incapacity benefit ever got anywhere near that process.
      If I had been a Minister, I think that I would have delayed contractorisation until I was absolutely sure of the quality of the service being delivered. I do not think that such an assessment was ever made, and we are paying a price because of that omission. The contractorisation timetable was doubtful, and contractorisation was implemented too quickly.
      Additionally, there was inadequate benchmarking. I should be glad to have information on any comparators from Northern Ireland, which has a different way of dealing with the process. As Sema was given all three areas—the north, the south-east and the south-west—all in one go, the competition element could not be tested. There was, therefore, no way of benchmarking performance by sharing out the contract geographically.
      An issue running as a thread through the report—the British Medical Association raised it originally, but others also did so in their own ways—is that the contract process, including its details and funding, was too lean and that it may not have provided sufficient resources to do the job properly. Undoubtedly, the day will dawn when the National Audit Office has time to examine the issue. However, if we are going to increase contractorisation and use that contract as a model, I really should like a Government body or departmental expert to examine the process and to determine whether lessons can be learned about how the decision was taken and how the process was implemented.
      I say quite candidly to the Minister—I was nice to him earlier, but there is always a "but" when one is nice to Ministers—that, although I am prepared to wait for the contract to expire, in my considered view, if the level of service to claimants does not improve, Ministers must prepare for the possibility that the contract will be awarded elsewhere. I do not say that lightly, but I think that it is true. The view that the House takes today will be important in that decision.
      This debate gives hon. Members the opportunity to give their own constituents a voice. I could use the next three hours of the debate reading out, without repetition, complaints that we have received. Some of the complaints are difficult to comprehend, because of the daftness and natural injustice that seems to have been visited on some claimants. Of course, we have heard only one side of the
      480
      story. We were dealing with anonymous complaints, which we encouraged, and were therefore never able to hear a balanced view.
      In their response, the Government have taken a bit of a potshot at the Committee for accepting anonymous evidence. Hand on heart, I say that only a fraction of the evidence that we took was anonymous. However, if Ministers really do not understand that people in this country and in this day and age are frightened to put their names to their complaints, they do not understand the extent of the problem. I therefore make no apology for taking evidence that was lodged anonymously.
      Additionally, Select Committees are not equipped with the depth and range of services that we need really to examine this type of problem. Only Departments have the resources necessary to conduct such an inquiry. Therefore, I do not think that, in the production of our brief report, there was any other way of getting the flavour of the boiling anger and frustration felt by those who have had bad service.
      I confess that I told my Committee members that I did not think it would be possible to get evidence from everyone. It is asking a lot to ask people who have suffered at the hands of the system to come and tell us their story. However, we went to Bristol for one evidence session, and the opportunity to speak to people directly was an absolute eye-opener.
      One thing just did not compute. We spent the morning at one of the medical centres provided by the Sema group and by medical services. We spoke to people whom I considered to be dedicated professionals. They were impressive, caring people who thought that they were providing a service that was up to scratch. I thought that there must have been some mistake, as the written evidence did not relate to what we were being told by the medical professionals. However, we spent the afternoon session down the hill in Bristol, where it was a completely different story.
      There is a disjunction between what the civil service and the medical professionals were arguing and what we were told that afternoon by people who had had terrible experiences involving life events that they will never forget. The question is to what extent the really difficult cases are typical. I have no way of knowing that, but the volume of the evidence suggests that there is a problem which needs to be addressed urgently. People out there are crying out for help and they need a response. This afternoon's debate provides an opportunity for that. I hope that right hon. and hon. Members will take the opportunity to give the House a flavour of some of the cases that they have struggled to ameliorate and deal with, so that we can decide where to go from here.
      I am not looking for scapegoats, victims, resignations or any damn thing. However, we all have an interest in moving on and trying to improve the service. The Government's response to the Select Committee report gives me confidence that, with good will, we can do that.
      The Select Committee report can be considered under four categories. The first is the recommendations that are designed to improve the medical quality of the examining medical practitioners' reports. There was a great deal of concern about that. Secondly, I shall briefly look at the recommendations that are designed to improve the service to claimants generally, and with particular reference to

      481
      claimants from ethnic minority groups, female claimants and claimants with mental health problems, whose cases were particularly poignant and difficult to deal with.
      The third category comprises recommendations that are designed to remove the perverse financial incentive, of which the Government are aware, involving the relative financial gain of considering cases by desktop scrutiny rather than by medical examination. There is a potential incentive for the contractor to make more money by carrying out fewer examinations. Incidentally, that might result in benefits being made available to people who did not really deserve them. The fourth and final category comprises the recommendations that are designed to improve the terms of employment of the examining medical practitioners, and their pay and training, which caused some concern.
      On the first category—the medical quality of reports—the Government's response at paragraph 7 is welcome. It is to set targets for a reduction in the proportion of "C grade"—or unacceptable—reports and for increased compliance with scrutiny guidelines for incapacity benefit cases. I hope that that course of action will be prosecuted with energy and vigour.
      The Government state at paragraph 15 of their response:
      More rigorous recruitment criteria…have been introduced which should set a minimum level of medical experience for the doctors who are employed.
      I shall return to that in a moment as the British Medical Association has faxed me a response that causes me some concern.
      At paragraph 20, the Government's response states that revised guidance has been issued to examining medical practitioners. I am particularly pleased that a medical skills database has been introduced. We should take advantage of the fact that companies such as Sema have expertise in these matters. If we can have available quality audits of doctors' work, details of their training and any remedial work that they may have undertaken, that must be valuable in terms of getting people trained and enabling the contractor to assess medical practitioners' success rates.
      I welcome the targets and the medical skills database and, in particular, the fact that in looking at the medical quality of reports, the Government recognise that their objectives have not yet been met and that work needs to be done.
      Rev. Martin Smyth: The hon. Gentleman referred to a comparison being made with Northern Ireland. Was he referring to the situation generally, or specifically to the medical examiners? Quite frankly, there is great concern about that. In a number of cases, the standard of examination was deplorable and it was despicable that people who were genuinely in need were put under such pressure. I wondered whether the hon. Gentleman was referring to that, or to another area where he thought that things were better in Northern Ireland.
      Mr. Kirkwood: Had I realised that the hon. Gentleman, who has expertise in this area, would raise the matter, perhaps I would not have strayed into an area that I do not know very much about. My point was that if
      482
      Sema are providing medical services in the northern area, the south-east and the south-west of Britain, the only opportunity for finding another system to act as a benchmark would be to look at the provision in Northern Ireland, but the hon. Gentleman may have taken away any hope of succour from that direction. If the situation is just as bad in Northern Ireland, it may not help us. However, I welcome his expertise and acknowledge his interest in the subject, and I hope that he manages to catch your eye, Mr. Deputy Speaker.
      I now turn to the Government's response in respect of service to claimants. At paragraph 25 they state that training is being offered to examining medical practitioners in customer care, but accept that revised guidance, which provides more information, is welcome. They state at paragraph 27 that the Department is working with medical services to review all aspects of the treatment of claimants and that a taskforce has been set up to review all communications to claimants.
      Less welcome, however, is the fact that at paragraph 36, the Government appear to reject the need for a review of the system's treatment of mental health problems. At paragraph 39, in respect of communications with patients from ethnic minority groups, they state that multilingual notices
      would not be consistent with current practice in other parts of the Benefits Agency.
      If that is a defence, I do not think much of it. Some members of the Select Committee who specialise in these matters helped us enormously by bringing to the fore some of the problems experienced in certain communities, so I hope that that is not the Government's last word on the issue.
      At paragraph 40, the Government appear to complain that our comments were based on anonymous examples. I tried to deal with that point earlier. At paragraph 42, they state that new training will be provided in multicultural awareness.
      Less welcome is the fact that at paragraph 45, the Government's response totally fails to address the difficulties of female claimants. They state that if a claimant requests a female doctor, attempts will be made to meet that request. That is not a sufficiently robust response.
      Although the Government say that they understand the Select Committee's concerns about the complaints procedure, once again, they accuse us of using anonymous evidence to support our view that the complaints procedure is totally inadequate. Indeed, early in the inquiry, we were told that a customer satisfaction survey produced a satisfaction rating of 88 per cent. As I said earlier, there is clearly a disjunction with some of the evidence on the subject and that is deeply worrying.
      On the question of service to customers, the Government are in danger of being complacent and defensive. I notice with interest that some 46 hon. Members signed early-day motion 826—which was unsponsored, honestly—congratulating the Committee on its report. Against that continuing level of concern, the Government's response leaves something to be desired.
      I am content that the Government seem to have got the message about removing the financial incentive to deal with claimants by scrutiny rather than examination. The report says that the Government would view "with

      483
      unmitigated disapproval" any evidence that the fall in the number of examinations was driven by commercial gain. I am content with that response. It is a difficult issue and there may be good reasons for some of the trends in the figures. I hope that the Government continue to share the Committee's concern that that potential threat exists and I urge them to keep the matter robustly under review.
      The Government state that within one year, all doctors will be trained in the assessment of people with mental health problems, the treatment of people with disabilities and the avoidance of distress for people with musculoskeletal conditions. That is welcome. The Government are also concerned about the failure of medical services to meet their contractual obligation in regard to training.
      Mr. Desmond Swayne: Since the publication of the report, I have received representations from sessional doctors in my constituency who are being encouraged by Sema to take additional training, but are being required to do so without pay. When the training was provided by the Benefits Agency, the doctors were paid for doing it. The Government have said that they are renegotiating the terms, but what prospect is there of them bringing pressure to bear on Sema in that respect?
      Mr. Kirkwood: As I would expect, knowing the hon. Gentleman as I do, that is a perceptive point and he anticipates my next comments. The Government sidestepped the issue of pay for training days by stating that it was a matter for medical services to address. Frankly, that will not do. I welcome the initiatives on training, but I remain concerned that by failing to specify the number of days of training to be delivered by medical services, the Government may allow the contractor to opt out entirely. I hope that that will not happen.
      The BMA has raised several issues connected with the report. The parliamentary response arrived on my desk this morning, and the tone of it concerns me. The BMA is an interested party and tries to improve the pay and conditions of its members, just like any other trade association or professional body. However, it points out several issues that suggest to me that the relationships in the set-up are not yet right. For example, it points out that people who work as sessional doctors for Sema and medical services have received no pay increase for some eight years. During our inquiry earlier in the year, it was suggested that that situation was being addressed and would be fixed. I do not know the current situation and it would be helpful if the Minister could give details. I know that he will say that it is technically nothing to do with him under the contract, but Nestor Disability Analysts says the same, and medical services also seemed to say the same at one point. Everybody was passing the buck and that may be why no pay increase has been given in eight years. If that is true, it is unacceptable and will not assist in attracting the quality of medical practitioners required to perform that sensitive and skilled work.
      I am also worried about the spirit of non-co-operation that appears to exist between the BMA and medical services. The BMA says that it last met medical services in September 1999. The proposed meeting in December was cancelled by medical services and a letter sent by the BMA to medical services on 25 November 1999 has not yet received a reply. I do not know any more and I do not
      484
      wish to enter into any dispute between the two bodies, but that does not suggest the spirit of co-operation necessary to achieve improvement.
      The BMA also raised the issue of time for interviews. It says that medical services have informed doctors, in a letter sent on 22 September 1999, that they will have to report all instances in which fewer than five clients are seen per session. A session lasts three and a half hours. The BMA also alludes to the issues surrounding non-payment for training, mentioned by the hon. Member for New Forest, West (Mr. Swayne).
      Mr. Gordon Marsden: On the point about the BMA's concerns about the time spent on individual cases, I noted the Committee's comments in the report. I offer the hon. Gentleman an example from medical services. I wrote to the Preston office with concerns about a particular doctor and the amount of time that he spent on his investigations. The reply from a Miss Unwin, the client team co-ordinator, stated straightforwardly:
      From the perspective of Medical Services, a total of 45 minutes or so in a house would be regarded as sufficient in most cases. The majority of clinical examinations can be concluded in 10 minutes.
      Does not that underline some of the BMA's concerns?
      Mr. Kirkwood: It does, and the hon. Gentleman makes his point eloquently. I hope that the Minister has taken due notice.
      The BMA says that it is concerned that it does not know how many sessional doctors are employed by Nestor Disability Analysts. Although the Department was told that 2,482 doctors had agreed to the contract, with a further 659 continuing to provide a service but without signing a contract, information obtained by BMA members indicates that a significant proportion of the 3,000 or so doctors approved to work for medical services have stopped offering their services. The BMA also believes that even under the new, rigorous recruitment criteria, which are mentioned in the Government's response, ordinary general practitioners can start to work for Sema and medical services as soon as they qualify. That was not my understanding during our work on the report, but I may be wrong. The BMA also believes that the pay issue must be addressed.
      The BMA drew my attention to some fresh concerns that are pertinent to the debate. The association is a not inconsiderable pressure group and its views should be taken into account. I hope that the Minister will be able to answer some of its questions.
      I shall conclude by saying that, although saving 14 per cent. of a contract worth £305 million over five years will realise £62 million, I wonder whether that is not taking too much out of the system. Removing that money will put pressure on the most disadvantaged people—the claimants.
      My anxiety about that is genuine. Today's debate should question whether the resources in the system are sufficient to achieve the standards that we all want. Speaking for myself, I think that the jury is out on medical services. The debate will allow hon. Members to speak for their constituents, but I believe that the Social Security Committee is likely to decide that, one way or another, it will in future monitor very carefully the progress of these matters, to which it reserves the right to return.

      485
      The Committee is also likely to take up the option of compiling a report at the end of the contract period. It is possible that that report will make a recommendation as to whether the Government are safe to continue with the present arrangements.
      I hope that the debate will be informative, and that the Minister will be able to reassure the House. I hope too that hon. Members will feel that the Select Committee report has been of some assistance in securing better provision for our constituents.
      4.50 pm
      Mr. Gareth Thomas: I am grateful to my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), who is Chairman of the Select Committee on Social Security, of which I am a member. He provided a comprehensive analysis of the inquiry conducted by the Committee.
      An inquiry and report such as the one that we are debating today offers an admirable example of the good work that Select Committees can do. If the report serves to concentrate the Government's mind on the need to maintain a good quality service in this crucial area, it will have been justified.
      I am heartened by the Government's generally positive response to the report. It is worth mentioning, as the Government are at some pains to do in the introduction to their response, that the history of medical services needs to be placed in context. There is reason to doubt the effectiveness of the present contractorised system—I am sure that some of the defects that came to light are only too familiar to hon. Members—but the fact remains that the old system was very far from perfect.
      Delays were part of the culture of the old system, and there was a total lack of co-ordination in terms of standards and training. Contractorisation at least gives the Government some significant degree of leverage over how quality should be monitored and the system improved.
      As my hon. Friend the Member for Roxburgh and Berwickshire said, the people seeking benefits under the system—which costs £25 billion a year—are the most vulnerable in our society. It is crucial to ensure that examinations for eligibility are conducted by doctors in a professional and fair manner, and claimants must believe that they are being dealt with fairly. I am sorry to say that it became apparent from our inquiry that in many instances that was not the case.
      I acknowledge that an enormous bureaucracy is involved, given that a million medical examinations are held every year in relation to medical benefits. No system can be perfect, but there is certainly a need for improvement. I agree with what has been said already: if medical services do not improve significantly over the next year or so, there should be scope to reconsider the contract and take robust action—including the draconian step of withdrawing the contract from Sema.
      Many hon. Members will want to inform the House about their experiences in this matter, so I shall confine my remarks to a few about some of the issues highlighted in the report. First, I want to deal fairly and squarely with the perception of fairness.
      486
      The perception exists that doctors do not spend enough time with claimants, that they examine them too quickly and do not do justice to their complaints. I agree with the Government's response that time spent with a claimant is not necessarily commensurate with quality. However, I am sure that the Minister agrees that it is essential for examining medical practitioners to devote sufficient time to listening carefully to claimants. Some claimants no doubt have difficulty in explaining themselves, but they must be left with the overall impression that they have been dealt with fairly.
      I am dismayed that the Government are somewhat critical of the Committee's approach to what the Government describe as anonymous reports of instances of dissatisfaction. I echo the remarks of the hon. Member for Roxburgh and Berwickshire: it is unrealistic to expect vulnerable people, who may be afraid of the consequences of complaining too strongly, to be very forthcoming in giving their identities.
      Mr. Gordon Marsden: Does my hon. Friend accept the close correlation between the cursory way in which some claimants are dealt with by examining medical practitioners and their subsequent reluctance to make a formal, or an identifiable, complaint? In my constituency, I have had several complaints against a particular EMP for giving a physical examination that lasted for only two to four minutes. When I pressed one or two of the claimants subsequently at advice surgeries—
      Mr. Deputy Speaker (Mr. Michael J. Martin): Order. I really must stop the hon. Gentleman. This is an intervention.
      Mr. Thomas: My hon. Friend makes a valuable point. A few doctors keep cropping up, time and again. They are very powerful, or are seen to be powerful, which might account for the reluctance to complain. The complaints system is not particularly user-friendly. The rate of successful appeals has traditionally been very high, although I accept that that is not necessarily a reflection of poor medical evidence. However, the point is well made.
      The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): The pattern has been that about 4,000 people a year make a formal complaint. There has been a lot of debate about whether that is a reflection of the true number of people who are dissatisfied, or a small part of the true number. However, I caution my hon. Friend against creating the myth that something happens to people who complain. Has he any evidence of somebody being victimised as a result of using the complaints procedure? If so, the Committee should bring it forward; it has not done so to date.
      Mr. Thomas: I do not have such evidence. I raise the issue—I do not want to dwell too long on it—simply to rebut the Government's suggestion that, because we could not provide a list of identities of individual complainers, that had somehow undermined our evidence.
      It is imperative to have a programme of recruitment that ensures that doctors who really want to do this job, and have some pride in their work, are recruited. There is an urgent need to look at their remuneration. I, too, am concerned that there has been no increase in the salary of

      487
      EMPs for some time. Unfortunately, that suggests that this is a Cinderella service, with all the implications that that has for quality.
      A more rigorous system of auditing performance is required. I am very pleased that the Government intend to take action to remove doctors who consistently under-perform. I am sure that that was always so, but it is nice to hear it. It will be welcome if medical services' efforts are redoubled.
      Training in customer care is essential, as is dealing with poor performance. The Committee criticised the manner in which EMPs deal with claimants with mental health problems or from ethnic minority groups, and strong conclusions were reached on some doctors' cultural insensitivity. I am pleased that the Government accept that that matter must be rigorously addressed.
      Two points should be made on appeals. First, a feedback procedure is necessary. When a pattern emerges of successful appeals involving a particular doctor, there should be some follow-through. Alarm bells should ring so that someone conducts inquiries and asks what is going wrong. It seemed to the Committee that that does not happen, and I should be grateful if the Minister would clarify the Government's approach.
      Secondly, as a lawyer experienced in personal injury cases, I know that, in addition to the medical report for the case, one of the most valuable pieces of evidence for a court determining liability and quantum is a person's entire medical history—general practitioners' notes, hospital records and so on. If one is successfully to assess someone's eligibility for benefits, that is essential. I did not know until I heard it in Committee that there appears to be no systematic approach to ensuring that additional medical evidence is obtained. The procedure requires tightening.
      I share concerns about financial pressures in the system, which give rise to suspicion that there is a disincentive to carrying out full examinations. There is evidence that the scrutiny procedure—examining the papers, not the patient—is increasing. The Government are concerned about that, and the figures are particularly worrying.
      I emphasise the need for adequate training of doctors. The status of doctors who specialise in this area should also be enhanced. There is a strong case for encouraging doctors to have training, paid for by medical services or the Government, to improve their skills and obtain further qualifications, including a diploma in disability assessment medicine.
      The Committee was right to ask whether the objective of contractorisation had been achieved. If improvements are not seen to be happening fairly quickly, the Government should bite the bullet and re-examine the contract.
      5.5 pm
      Rev. Martin Smyth: I appreciate this opportunity to make a brief contribution to the debate. I join the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) in paying tribute to the Under-Secretary, the hon. Member for York (Mr. Bayley). I worked with him when he was a member of the Select Committee on Health. He is open and helpful on all issues.
      I share the concerns that have been expressed, especially in relation to Northern Ireland. My first concern is that medical examiners should be directed not to look
      488
      just at the picture presented by the client at the moment of the examination. However, time and again, I discover that that is exactly what they do. They quickly tick the boxes, without listening to the patients who are trying—in sometimes limited vocabulary—to explain their problems.
      I thought we had moved on from the situation that existed 15 years ago when I took up the case of an elderly woman. She was asked whether she could walk unaided and, because of her dignity, she replied that she could and showed the examiner how she did so. Mr. Deputy Speaker, you might know, from your Scottish background, that in our Ulster Scots parlance, we talk about doing the rounds of the kitchen. She moved from the table to the dresser, but held on to the furniture all the time; that was supposed to show that she could walk without help. The medical examiner put on the form that she could walk unaided.
      One of our traditions in this place is that, during Prayers, we turn towards the Bench. Some people say that the tradition arose because it was easier to kneel on the seat. Not long ago, I was involved with the appeal in the case of one my constituents. The medical examiner had put on the form that the person could kneel unaided. Before the tribunal, I asked my constituent where the medical examiner had asked him to kneel. My constituent had been asked to kneel on a chair. I can kneel reasonably well on the floor, but it is far easier to do so on a chair. To pass that person as having mobility because he could kneel on a chair and could do certain things was ludicrous. That quality of examination does down the service.
      One is left with some doubts, because, under the contractual arrangements, the examiners are paid by the hour and by the number of people with whom they deal. Surely, in health and social services, we should be concerned to put the patient first. However, there is some recent evidence that a person in at least one branch of the health profession put his office needs before the care of the patients in his area. That does down the care of people with disabilities. We should be more concerned about them.
      I would have no difficulty in removing from the list those people who find a way around the system—who fill in the forms so as to give the impression that they are in a bad way. On the other hand, the job of the medical examiner should be to discover whether the case is genuine rather than to try to get people off benefit.
      Only this morning, I spoke on the telephone to the constituent of one of my colleagues, whose case reflects some of the concerns felt by patients when they talk to doctors. She has a girl of 10, vaccine-damaged, and a young man, now 17 years of age, also vaccine-damaged. It transpired that even her own GP had not been given the proper notes from the hospital, and that he was unaware of certain treatment that one of those young people had received, but his guidance to her was that she had a case and should pursue it, either against the firm who supplied the vaccine or against him. She replied, "Doctor, I would not want to bring a case against you as my doctor."
      That personal relationship is first and foremost: people trust doctors and are rarely ready to complain about them. I believe that that is one reason why, although the number of successful appeals regarding medical examiners has been growing, some people do not consider that they have a right to appeal, and therefore do not appeal. I believe that the authorities expect people to appeal if they are wrongly turned down, but I am not convinced that they will necessarily do so in many cases.

      489
      Therefore, we should start by raising the standard of medical examiners. I have not met any. I find it hard to decipher their signatures. They do not turn up to give evidence to support their case when we go to appeal. The matter is left to an adjudicating officer, who must take the decision in the light of the form that the medical officer has returned. That is one reason why I questioned the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) as to what difference he had discovered between Northern Ireland and the rest of the kingdom, but I now know what he intended.
      I believe that perhaps in Northern Ireland we are still suffering, with the rest of the regions of the kingdom, because some medical examiners are not doing their job properly in the interests of the client or patient, but are more concerned to fulfil their contractual arrangements, which may be to get through as many examinations as possible in a given time. That is not a proper examination.
      I sometimes tell folk, "If there is something wrong with you, you had better go to the vet." They ask, "Why do you say that?" I reply, "Well, when you go to the doctor, the first thing that he will say is, 'What's wrong with you?' whereas a vet has to find out for himself what is wrong with an animal." When I tell my medical friends that, they say, "If you go to a vet, the next thing that he will say is, 'Where's the shotgun?'" In a caring society, we cannot spend our time getting rid of people who may be an economic drain, but who have a right to the facilities and support of society.
      5.13 pm
      Mrs. Maria Fyfe: I congratulate the Select Committee on Social Security on the excellent work that it has done. I am especially glad because I believe that it will give heart to a number of my constituents who have begun to wonder whether there is anyone out there listening. I also welcome the Government's positive response.
      However, I am grateful for the opportunity that the debate gives me to draw attention to a few issues. Earlier today, I spent half an hour having the three-yearly check-up that is offered to Members of Parliament, merely as a way of checking on one's general health. I have absolutely nothing wrong with me, yet it took half an hour simply to question me about various aspects that could be wrong with my health. It seems to me that, although it is fine for an examination to be concluded within 10 minutes if it is patently obvious that the person is so severely disabled or ill that there is no point in continuing an examination at length, if someone is likely to be denied either disability living allowance or incapacity benefit, a considerable amount of time should be spent before a person is denied that benefit and a considerable sum of money is taken from them.
      Recently, a father in my constituency came to visit me to talk about two sons, both of whom have the same serious illness. Both applied for disability living allowance, and an odd thing happened: the son whose condition is less severe was awarded the higher component and the son whose case was far more severe was denied it. Mistakes can occur in any organisation that deals with so many cases, but there needs to be a quicker way of putting right an obvious anomaly when evidence is presented by a general practitioner and a hospital doctor.
      490
      I know that hon. Members can provide umpteen examples from their constituency case loads, but I will not weary the House with many of my own. However, a particularly atrocious example is that of a constituent who was denied incapacity benefit, but who two weeks later was in a hospice for those dying of cancer. That is how bad the errors can be.
      At present in Glasgow, the waiting time for appeals has been reduced to 16 weeks. It had been as long as a year, so I am grateful for the fact that it has been reduced to a more reasonable level. However, people have to make do without their benefit while they wait all those weeks. Perhaps in other parts of the country people have to wait longer, so I suggest to my hon. Friend the Minister that it might be worth while considering the possibility of allowing people's benefit to be restored if they are forced to wait more than a few weeks. I know that the Department intended that people would do without the benefit because their cases would be heard soon. However, if a case is not heard for months, it is unfair to deprive them of their benefit.
      In the report of the Social Security Committee, I found a surprising statistic that I want to place on the record. It says:
      In 1998–99, the Independent Tribunal Service (as it was then) received 324,067 appeals.
      That is a third of a million, and the figure relates only to those who appeal. Many other people should receive the benefits, but they are too sick, too tired or too dispirited to make an appeal. Many of the appeals made were successful. The reports points out that 41 per cent. of incapacity benefit and 49 per cent. of DLA appeals were successful. That certainly shows that there is much wrong with a system that decides that people are not worthy of receiving the benefit in the first place. Serious work has to be done on that.
      Finally, I refer to a point that I was not going to make until my hon. Friend the Minister intervened on my hon. Friend the Member for Clwyd, West (Mr. Thomas). I hope that no one with a sense of responsibility would want to create fear among people. However people may not provide their names when they make a complaint, because they fear that it will rebound badly on them. My hon. Friend the Minister was right to ask for evidence of that, but those people's life experiences might have taught them that they should not provide their names. They need reassuring that other people have won their appeals and suffered no adverse consequences. To people in that position I say, "Take courage, make an appeal, give your name and address and don't be afraid." However, people must be shown that they should do that.
      I know that my hon. Friend the Minister is deeply concerned about this issue. As someone else has said, the Government's response has his fingerprints on it. I welcome that response, but we need reform and we need it quickly. Bad decisions are being taken and, I am sorry to say, they are affecting the Government's reputation. People are becoming worried about how fair this Government are, and I do not want a Labour Government to suffer from such a reputation. I want us to make sure that people can say that the Government are fair to people because they deny benefit to con men, but provide it to those who deserve it.
      5.19 pm
      Mr. Desmond Swayne: It is always a pleasure to follow the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) and I shall endeavour to be as brief as she has been. As a member of the Committee, I feel that I have had my say on the report and I am interested to hear what other Members have to say about it. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) gave a lucid exposition of the report and an analysis of the Government's response, so there is not more that I wish to add.
      I wish to draw attention to one point, however. The evidence presented to the Committee was powerful in respect of the suggestion that Sema had made too lean a bid for the contract. To be fair, Sema inherited many of the difficulties that it now faces. After all, we have been told that there has been no increase in remuneration for eight years. Sema's problems did not arise suddenly but its low bid for the contract none the less gave it little scope to manoeuvre and address problems such as recruitment, pressures on doctors to accomplish examinations quickly, remuneration and particular difficulties with training. I wonder if the Minister can do anything to open up those issues before the contract comes up for renewal? I doubt it, but I hope that the hon. Gentleman will consider the matter seriously.
      I wish to draw attention to one other matter. The sessional doctors of whom we are often so critical are the self-same doctors to whom other people go for surgery consultations to get prescriptions to make them better. They are not different people. One may find an examination by one's own GP cursory, painful or uncomfortable, but that will not have the same psychological effect—in terms of humiliation and so on—as it does when one finds the sessional doctor insensitive or when he generates pain or discomfort or makes a cursory examination.
      Why are people prepared to accept that from their own GP but not from a sessional doctor? There is a psychological difference. People go to their doctor to be examined and given a cure for a problem, whereas a sessional doctor comes to see someone to examine whether they qualify for a benefit or—to put it bluntly—to make sure they are not malingering. Overcoming that barrier and psychological difference requires the sessional doctor to be much more sensitive than a GP has to be. That demands additional training which of course requires additional resources, which brings us full circle to the fact that Sema made too lean a bid for the contract.
      5.22 pm
      Mr. Andrew Dismore: I agree with the final point made by the hon. Member for New Forest, West (Mr. Swayne) and hope to return to that later.
      This is an opportune time to debate the issue. The report of the Select Committee on Social Security, together with the outcomes of the two seminars held by the Department of Social Security with Sema's officials at the end of last year, operated as a wake-up call for the Department by bringing to the fore criticisms of the Department's medical services, both when they were in-house and now that they have been contracted out. I welcome the Government's largely positive response to the report. I shall highlight areas in which, perhaps, there may be differences between the Select Committee and the
      492
      Government, but I hope that that will not be taken as detracting from the overall thrust of my remarks, which welcome the Government's response.
      I shall start with one or two points about the contract, especially the ratio of scrutiny to examination, which has been mentioned and which sounds very technical. The Committee was concerned that there may be other than logical reasons behind the falling ratio. The Government accept that our concern needs to be examined, and have identified several possibilities. When we considered the matter, the suspicion was put in our minds that the way in which the contract is formulated means that Sema can make money out of doing examinations not by seeing people but simply by going through the paperwork. If it does that and passes someone for benefit that person will not complain about receiving benefit—for obvious reasons. People who may not be entitled to benefit are potentially getting it, and the cost of that is passed on to a different part of the DSS budget. However, Sema is paid the same whether or not it does a full examination or an examination on paper, thus potentially finding a way of making profit out of the contract, which may not have been anticipated.
      I am pleased that the Government said in their response that they would view that with unmitigated disapproval and take decisive regulatory action if it were the case. I am pleased that they have given such a strong response to the suspicion expressed by the Select Committee and that they are studying the issue in more detail. If the falling ratio turns out not to have more valid causes, that is a serious matter that needs to be addressed.
      I am pleased also that the Government indicate that the contract with Sema allows the Department to share any financial savings if the ratio is found to have fallen for genuine reasons. I make a plea that, if those savings are identified, Sema and the Government should think about transferring the money to the wages of the doctors who, however one views the matter, are not getting a fair crack of the whip, for the reasons given by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) when he opened the debate.
      The issue of complaints has loomed large in the debate. It is a bit rich for the Government to protest that the Select Committee worked on the basis of anonymous complaints. I listened carefully to my hon. Friend the Under-Secretary's intervention on my hon. Friend the Member for Clwyd, West (Mr. Thomas) on that point. The issue is that raised by the hon. Member for New Forest, West, and it is not that people are being victimised because they complain; there is no evidence of that and I have no reason to suppose that it is the case.
      We must, however, understand the power balance, or lack of balance, between the claimant, for whom the doctor's decision can mean the difference between living in poverty and being a little, or a lot, better off, and the doctor, to whom the claimant is just one of a dozen that he may be seeing that week. That power relationship inevitably affects the way in which the doctor and the claimant view each other, so even though there is no threat and, as far as I can see, no evidence of victimisation, claimants may perceive that, given the power that the doctor and the Department have over them, it is best to complain anonymously.
      I shall turn later to the issue of cultural insensitivity, on which we are again criticised for putting forward anecdotal examples. However, I submitted one of those

      493
      examples from my constituency case load, and I wrote to the Department about it 18 months ago, so the Department has chapter and verse on that case at least.
      We have to make it much easier for people to understand how they can make a complaint, and we have to work to overcome the fear that arises from the imbalance of power in the doctor-claimant relationship. I am pleased that the Government are considering ways of making claimants more aware of the complaints procedure, particularly for those who are examined in their own homes and who, at present, have no direct access to a complaints form.
      There is ground to be made up. The National Association of Citizens Advice Bureaux, which wrote to me about this matter the other day, said that it was not surprising that clients found it difficult to get copies of the complaints leaflet because it
      was not even listed in the Benefits Agency's most recent catalogue, issued in May 2000.
      If that is the case, the matter needs to be addressed.
      We heard earlier of the 88 per cent. satisfaction rate, but that gives rise to the question of when clients are asked whether they are satisfied with the examination. They have no way of knowing whether what they have told the doctor has been accurately recorded. I accept that if the record is later found to be inaccurate, that can give rise to an appeal, but there has to be a way of dealing with a complaint from a client who genuinely believes that what they have said has not been accurately recorded. At the moment, there is a lacuna in the procedure.
      My hon. Friend the Member for Clwyd, West pointed out the need for an accurate medical history. The Department rarely asks for medical records and notes from GPs and consultants. I fully accept the point made by the Department in its response, which is that in those circumstances doctors are primarily concerned with diagnosis, prognosis and treatment. However, like my hon. Friend, I was a personal injury lawyer. I practised in personal injury law for almost 20 years. I cannot recall a case in recent years in which the doctor preparing a report for use in court did not first ask to see the medical records.
      The supposition in the Government's response is that issues relating to disability and function might not be dealt with in such records, but, in fact, they are. I have looked at many dozens, if not hundreds, of records while preparing cases over the years, and they often contain that information. The questions that doctors in personal injury cases have to address in court not only involve prognosis, but are rooted in the need to deal with functional disability because that represents the lion's share of any assessment of compensation.
      Those doctors are asked to decide exactly the same questions with which Sema doctors deal, sometimes in medical examinations that last only a few minutes. They can do so because they get the history from medical records. It is important to get the history from the medical records when determining whether any pre-existing medical condition is relevant to the case because, with the best will in the world, I have found that many clients are not very good at giving a full account of their medical history. Such information is more easily and quickly obtained from their medical notes.
      494
      The kernel of all the complaints and submissions that we have received—and, indeed, all the discussions that we have had with hon. Members on both sides of the House during the Department's seminars and during the inquiry—is the way in which the Department treats people. I am concerned that the Department has not followed up our recommendations on claimants with mental health problems.
      A separate review of how claimants with mental illness and mental health problems are treated is necessary, because they are special and the doctors involved need special training, especially in considering the degree of functionality. I fully accept that additional training is being given and that the emphasis is being placed on a much more empathic, active listening approach, but such a review is needed.
      We criticised the services offered to members of ethnic communities in two main ways, the first of which relates to interpretation services. I am concerned that, as the hon. Member for Roxburgh and Berwickshire mentioned, the Government have not taken up our suggestion that there should be a multilingual notice. The reason given is that it is not consistent with the agency's practice. Perhaps that suggests that there is a question mark over the agency's practice, rather than over the recommendation.
      Coincidentally, the Select Committee paid an informal visit to my constituency this morning as part of our pensioner poverty inquiry. Some of this morning's discussions were with ethnic community groups from the Asian and Afro-Caribbean communities in my constituency. We considered take-up, claims and so on, and they made the point that a much more simple claims procedure and face-to-face explanations are needed so that people understand what is happening.
      We were given copies of the questionnaires that people must complete. The questionnaire that claimants must fill in is some 20 pages long. It is difficult to imagine people filling in those forms if English is not their first language. Completing the form would be bad enough if English was their first language. People may need interpreters because they do not speak English or have difficulty with it. That fundamental problem must be addressed. Similarly, the medical report form that doctors have to complete runs to 24 pages of questions.
      Without an adequate interpretation procedure, and even with interpretation, there is enormous scope for misunderstanding between doctors and claimants for whom English is a second language, or those who try to answer the doctor's questions through an interpreter. Many of the complaints that we have had from ethnic minority communities and those who advise them on such matters arise out of misunderstandings caused, as much as anything, simply by the complexity of those forms.
      I am disappointed to see from the Government's response that the Commission for Racial Equality has so far not been involved. From what is said there, that seems to be as much a problem of the CRE as of the agency. I hope that it can be much more involved in trying to deal with some of the problems, but we must not see those examples as merely anecdotal. I return to the fact that there is so much anecdotal evidence that it cannot be disregarded.
      NACAB wrote to me yesterday with a batch of other examples. First, a young Somali woman with chronic back pain was examined, although none of the physical

      495
      descriptors for incapacity benefit were mentioned. She was simply asked to hold out each arm. The doctor remarked that her English was very good "for a Somali". Secondly, a black woman lost benefit after a medical examination when, in a stage whisper, the doctor asked a colleague whether he thought that the client was "faking it".
      Thirdly, a Muslim woman felt unable to disclose details of her incontinence to a male Asian doctor. The client felt insulted. The doctor asked whether she was married. When she responded that she was single, she was asked whether she had any children.
      Fourthly—we have stressed the need for women doctors—a woman client was visited at home by an examining medical practitioner on a Saturday. The doctor made remarks about the client
      having a child out of wedlock
      and fell asleep on her sofa.
      Fifthly, a woman client was alone when a doctor called. The doctor asked the woman to go upstairs to the bedroom for a medical examination. The client declined and said that she was on her own, but would be examined on the sofa. The doctor did not want to do that and dismissed her symptoms and complaints.
      Mr. Bayley: My hon. Friend makes a powerful point to the House, but I am concerned that the Committee has neither investigated the allegations put to it nor asked the Department to do so. The allegations need to be investigated. As a Minister, I asked the Clerk of the Committee to provide the information on who those people are so that we can learn lessons from what happened, and I ask my hon. Friend to ask NACAB to provide the information, which it is often reluctant to supply or cannot substantiate. If it can provide that information, every case will be investigated because we want to get to the bottom of the problem.
      Mr. Dismore: I am grateful to my hon. Friend and, in those circumstances, I shall not cite the last case, which is perhaps the most appalling of all. I shall tell him about it afterwards. [HON. MEMBERS: "Go on!"] Oh, all right then, since I am being pressed. A woman client of Chinese origin was visited at home by an examining medical practitioner. The doctor asked the client a number of questions about how she came to England and how she "got her children in". The doctor pulled up the client's skirt, revealing her underwear. Unsurprisingly, the client was made to feel uncomfortable. Such behaviour is unacceptable and I am grateful to my hon. Friend for taking a firm view on that.
      I referred a constituent's complaint to the Department, with a full explanation. An Irish gentleman had fallen off a roof, suffering a badly fractured leg. When he went to be examined, he was asked whether he was drunk at the time. Assumptions are made about Irish people. I see the hon. Member for Belfast, South (Rev. Martin Smyth) nodding.
      Rev. Martin Smyth: Some of us are TT.
      Mr. Dismore: The hon. Gentleman makes his point from a sedentary position, and my constituent made exactly the same one, because he is teetotal and felt grossly insulted by the question. Stereotyping is the problem. In that respect, I am grateful to the Government
      496
      for saying that they adopt a serious approach. We must get to grips with these issues and we can do that by spending a little money on ensuring that proper interpretation facilities are available and that people can understand both the claims forms and what is expected of them during an examination. Above all, we must make the system a lot simpler.
      5.39 pm
      Mr. Andrew George: I congratulate the Select Committee on a first-class report and my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) on his introduction to a constructive debate that has highlighted the fact that there is a degree of consensus across the Chamber. If Parliament is responsible for scrutinising the Government, we all have a responsibility to point out that the public out there—our constituents—are receiving a service that is clearly failing in a number of significant areas. We must put that right. That is why we are all present in the Chamber, and we should follow up the debate and ensure that the service is improved.
      I hope that the Select Committee will continue to press the Government. I agree with my hon. Friend the Member for Roxburgh and Berwickshire that the Government's response was helpful, but it contained a number of commitments for which there were neither targets nor timetables. I hope that the Select Committee will make sure that those commitments are met. One of the failings that has been highlighted in the debate is the uncertainty surrounding issues such as complaints, audit, pay and training. We need a firmer basis on which to assess the progress that the Government are making.
      I shall not repeat unnecessarily points that have already been raised, but I shall try to set the debate in a wider context—the need to ensure that disabled and sick people who want to get back into the job market are enabled to do so. The system should be designed not to stop disabled and sick people receiving benefits, but to focus on their abilities and to smooth their path from sickness and disability into gainful employment. That seems to be what the Government are proposing through personal capability assessments. At present the path is not clear and smooth; for many, it is a precipice, and the process becomes understandably stressful.
      I was one of the new intake of Members of Parliament, although we are not new any more. We all recognise that we do not have people queueing up at our casework surgeries to congratulate the Government on not taking their benefit away. They come to our constituency surgeries to complain when that happens.
      In comparison with the Child Support Agency, the medical services are not doing too badly—[Interruption.]—but as hon. Members say from a sedentary position, that is to damn with faint praise. The CSA is a rather poor benchmark against which to judge the performance of the medical services. Many hon. Members find that after the CSA, one of the most prevalent issues with which they have to deal involves the former all-work test, the problems with the medical services and the difficulties that people experience in comprehending how the system is supposed to work, even when their disability is clearly demonstrated by their evidence to their Member of Parliament.
      The number of appeals that we know about, and the proportion of cases in which appeals are upheld and benefits restored, show that the system is not working.

      497
      It is not working in a number of ways. If the Government intend to reduce to 10 per cent. the failure rate of the medical services to meet professional standards, they are setting the rate too high. Poor quality reports result in poor decisions. Although arrears will ultimately be reimbursed to those whose benefits are wrongly withdrawn, the process still results in trauma and poverty.
      In addition, to mount an appeal a claimant must obtain additional medical evidence, which may be costly. For example, Carol Simons, a Leicester resident who successfully challenged a decision to refuse her claim to incapacity benefit, had to pay £40 for additional medical evidence to support her appeal. A Leicester city council report reveals that charging for medical reports is widespread, with charges ranging from £11.50 to £60, with some doctors charging more than £100 an hour. Not only does withdrawal of benefit mean trauma and poverty, but an appeal to have it reinstated costs money. The disabled person is clearly not at fault, but he must still pay, and no one will reimburse him. Clearly, the system is failing there.
      From the disabled person's point of view, the system is self-policing. As has been pointed out, its approach to mental health is inadequate. The hon. Member for Hendon (Mr. Dismore) articulately described cases showing that ethnic minorities and others with language problems have also had to face prejudice and difficulties from the service.
      The British Medical Association has requested a meeting with the Minister and medical services, but has yet to receive a reply. As has been pointed out, the fact that doctors have not had a pay increase for eight years is clearly a matter of deep concern. The fact that the Government intend to apply valid measures of professional services, but have not worked with the BMA in devising them, is also a matter of concern. Free training for doctors has been dealt with inadequately, as a number of hon. Members have said.
      In September 1998, in a letter to my hon. Friend the Member for Bath (Mr. Foster), the Under-Secretary, the hon. Member for Wallasey (Angela Eagle) said:
      the intention is that a new fee structure will be introduced which will be linked to the quality and effectiveness of the work.
      The BMA informs me that it still awaits a new fee structure. Apparently, medical services offered a pay increase of 3 per cent. in February 1999, which the BMA rejected. We need to be clear about the status of those negotiations and what the Government intend to do to move them on. Clearly, doctors are unhappy about their pay, and one can understand why.
      In delving into the subject, I was concerned about whether the system could adequately pick up some of the less common illnesses suffered by those on incapacity or other benefits, and I looked up Guillain-Barré syndrome. I also looked up ankylosing spondylitis in the disability handbook published by the Department of Social Security. Its purpose is as follows:
      The handbook is intended primarily to help adjudicating authorities to assess the medical evidence presented to them.
      Ankylosing spondylitis is a condition that I have. I am sure that my intellectual handicaps are obvious to all, but my physical ones may not be apparent. I have only a mild form of ankylosing spondylitis and I did not recognise the
      498
      extent to which some people are crippled by it. It affects their legs and hips and they are unable to walk. That is not identified in the handbook.
      I contacted Professor Richard Hughes, who is head of the division of clinical neurosciences, about the Guillain-Barreé syndrome. I asked him to read the guidance that is provided in the disability handbook with regard to it. In his response, he stated:
      The section on 15.6 is so seriously inaccurate that I have been unable to revise it in any simple way.
      He offered an alternative text book for consideration. As I have said, Professor Hughes is the head of the division of clinical neurosciences of Guy's, King's and St. Thomas' school of medicine. It is clear from the two texts that the handbook attempts to diminish the potential impacts of Guillain-Barré and the way that it affects the patient. If that is the case with Guillain-Barré, to what extent is the rest of the handbook adequate in providing an accurate assessment for adjudication authorities when considering the evidence that is presented to them?
      I suspect that the Minister may comment on the fact that the Government are introducing personal capability assessments in one pilot area. To what extent has the Minister learned from these assessments and when will they be trialled or moved into other areas? Is there evidence that is helpful to the debate?
      We take the same view as the Government. We talked about personal capacity tests, while the Government call them personal capability assessments. However, we are considering the capability of a client rather than his or her incapacity. While we may argue about something being half full or half empty, we wish the Government to take a different approach. If we are to encourage and enable people who are disabled or sick to have work trials and to move back into the employment market, we need to support that with a social security system that allows them a smooth passage back into the world of work.
      Mr. Eric Pickles: The hon. Gentleman's points about personal capacity are interesting. Will he confirm that the medical test for the personal capacity assessment is identical to the one for the all-work test?
      Mr. George: The hon. Gentleman has asked me a question that I am about to ask the Minister. As far as I am aware—
      Mr. Bayley: The test for incapacity is exactly the same.
      Mr. George: I am grateful for that clarification. Perhaps the Minister will comment on the relevance of personal capacity assessments and the effect on our debate in his winding-up speech.
      The report provides a picture of a service that is driven by profit, and not necessarily by quality. From the report, medical services appear to provide the minimum that they can get away with and to maximise their use of the scrutiny rather than the examination method. Many doctors are poorly paid; many of our constituents have been treated brusquely and impatiently, and some have, sadly, suffered rudeness, insensitivity and racism. The system operates without a proper, independent complaints procedure or independent audit.

      499
      As I said earlier, the Government should reconsider their response to the Select Committee report and provide clearer targets and timetables to deal with the important issues that have been raised.
      5.56 pm
      Valerie Davey: I welcome the debate, and I know that constituents who have visited my surgery because they have suffered traumatic experiences as claimants also welcome it. I stress at the outset that my hon. Friend the Minister has always responded with understanding to the individual cases that I brought to his attention. He has looked into them, and I respect his concern for the subject that we are considering.
      If only a handful of cases existed, perhaps they could be tackled individually. However, through talking to other hon. Members, especially in the Bristol area, I have begun to perceive a pattern of anxiety. I therefore welcome the Select Committee's report, especially as its members visited Bristol and were able to take direct evidence. I welcome the reference by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) to that experience.
      Wide experience has been gained by the Avon and Bristol law centre, to which many people have brought their cases. I want to draw on that experience in presenting four main points. The importance of communication is paramount. When the hon. Member for Roxburgh and Berwickshire mentioned his Bristol experience, he talked about the way in which dedicated professionals and people bringing complaints showed completely different sides of one coin. That is worrying, and I am glad that the hon. Gentleman brought it to light. As has also been said, if English is not a person's first language, the disparity and the scope for misunderstanding is even greater.
      The first point that the Avon and Bristol law centre emphasised to me was the importance of the Select Committee's recommendation that all claimants should be clearly told in initial correspondence with medical services that they have the right to request the presence of an interpreter. Like some hon. Members, the Avon and Bristol law centre was dismayed by the Government's response. It would like interpretation services to be expanded throughout the Benefits Agency rather than pulled back. It asks the Department to investigate further the cost and benefit of a policy that would mean greater use of interpreters. From my experience of constituents who have come to my surgery, I fully endorse the law centre's first point.
      Secondly, the Avon and Bristol law centre would welcome greater recognition by the Government that there are a small proportion of appalling reports and a larger proportion of substandard reports. It requests that other organisations—advice agencies and the BMA—monitor the reports.
      The Avon and Bristol law centre's third point is about racism. Based on its experience, it believes that the Government have been too dismissive of the Committee's findings. It supports greater participation by the Commission for Racial Equality in training doctors. It was felt that the Government should make a real commitment to the investigation, and to rooting out racism.
      500
      The fourth issue was that of complaints, to which many others have referred. The Avon and Bristol law centre feels that the whole procedure needs to be overhauled. It says that
      Consultation…with organisations such as the Law Centres Federation and the Federation of Independent Advice Centres, as well as NACAB
      would be welcome.
      The Bristol centre commented specifically that there had not been a single admission of fault, and that there had been no apology. Given the complexity of the organisation and the number of people involved, the failure to admit to a single mistake is inhuman. It is a reflection on the system that no one was prepared to make an apology, or to admit to a mistake.
      Nevertheless, I want to end on a positive note. I welcome the report and, indeed, the Government's response, which is positive on the whole and which—in the hands of the Minister—will, I trust, be explored and developed fully. Similarly, the Avon and Bristol law centre welcomed the commitment to a diploma course, which was seen as an important step. It also made special reference to the training that is now being recommended for those who must deal with people suffering from mental health problems. It said that mentally ill patients had specific requirements in terms of those dealing with them. I am sure that the provision of more training would be welcomed by all concerned.
      This is an important debate for many of the most vulnerable people in my constituency and those of my hon. Friends. I trust that the Select Committee's admirable report, which has done a remarkable job in a difficult sphere, will be taken on board by the Minister, the Department and the Government, and that the points made by the Avon and Bristol law centre will be considered.
      6.2 pm
      Ms Linda Perham: I, too, congratulate the Committee on its report, and welcome the Government's response. I also thank the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) for letting me know—as a person who signed the early-day motion—the timing of the debate. As I am sure many hon. Members know, on Thursday afternoons, the calls of the constituency are sometimes greater than those of the Chamber.
      The great majority of cases concerning problems with disability living allowance or incapacity benefit that come to me concern assessment by Sema, on behalf of Benefits Agency medical services. People who have been unable to walk a few steps from their doors to my surgery have been assessed as "fit for work". In those cases, there have clearly been shortcomings in the conduct of medical examinations, especially with regard to the time that they have taken. Others have mentioned that.
      In some cases, a doctor has been present for only 10 or 20 minutes, and a report has subsequently stated that the person concerned was able to engage in an activity for much longer. On at least one occasion that I remember, an assessment included comments on a person's appearance. For instance, someone was described as an "obese lady". That person was very upset when she saw the report.
      A woman who lives near me in north Ilford has been unable to work for nearly 20 years because of her spinal problems. Over the years, when examined by doctors at

      501
      our local practice, at local hospitals and by those whom she describes as "Government doctors", she has been told many times that her condition can only worsen. According to a letter that I have from her, the examining doctor said that she could not sit comfortably for more than two hours. She says that she cannot sit comfortably for more than 10 minutes. No points! The doctor said that she had no problem with rising after sitting down; she says that she cannot get up without holding on to something—"usually my husband". Again, no points The doctor says that she cannot walk more than 800 m without stopping or severe discomfort. She says that she cannot walk more than 200 m without stopping or severe discomfort—again, no points on that assessment.
      Looking through the report's recommendations and the Government reply, I can say on behalf of my constituents that a good number of their concerns have been addressed. They include the time spent with claimants, which my hon. Friend the Member for Clwyd, West (Mr. Thomas) covered in some detail; the quality of reports; the recruitment, training and monitoring of doctors, which is important, and how poor performance is dealt with; and communication difficulties and providing interpretation services, which my hon. Friends the Members for Bristol, West (Valerie Davey) and for Hendon (Mr. Dismore) highlighted. He also touched on the availability of female doctors to examine women, especially those whose religious or cultural background precludes contact with males outside the family circle.
      The complaints procedure was another concern. From looking at the report, Sema is conducting a review, but it is disturbing that so many claimants are appealing, rather than complaining. That is dealt with in the Government's response.
      All in all, it is a thorough and much needed report. I look forward to improvements in service for a lot of anxious and deserving people, who are already facing lives full of frustration and pain.
      6.6 pm
      Dr. Peter Brand: I welcome the report. I have practised as a general practitioner for 25 years and have had to go through the agony of some of my patients' contact with the Benefits Agency in its medical manifestations. Not much has changed to date. In fact, matters got a lot worse during the dreadful benefit integrity project, when there seemed to be a witch hunt.
      The thing that concerns me most is that we are asking doctors who work for the Benefits Agency—they did so in the past directly, but now do so through Sema—to do their job wearing a blindfold, or blinkers at best. As the hon. Member for Clwyd, West (Mr. Thomas) pointed out, history is important when making an assessment, but so is examination and having access to the result of investigations. We do not have an integrated system where relevant knowledge is made available.
      We are not just talking about disbursing £25 billion of public money, although it is right that we should take that seriously and target it at the right people. Decisions by the Benefits Agency can have a dramatic impact on people's clinical outcomes. For the Benefits Agency to say, "Go back to your doctor and get another certificate," adding in brackets—it is never stated—"Make sure that it is for a
      502
      different condition, so that we can restart your claim," is nonsense. A doctor can write a further certificate, but that does not reinstate the benefit for that patient, unless we are being particularly clever about something.
      One sometimes sees the real effect. We get these amazing decisions by the examining doctors who will not accept the history given by the patient and who will not take steps to ensure that investigation results are available to them. That means that the appeal mechanism gets triggered, if the patient is well advised. However, many patients do not have that level of advice.
      The internal system that BAMS used to have, and which still exists, involves having an assessor. Those decision makers are not competent either. I do not think that they are empowered to ask for more information so that a reasonable decision can be made.
      I urge the Minister really to examine the contractual relationship between the Department of Social Security and the Department of Health, so that the Benefits Agency can buy more relevant information from the national health service. I realise that that information is not a free good and takes time to produce. Although I take the point made by my hon. Friend the Member for St. Ives (Mr. George), doctors are busy people and are expensive. Their time will be paid for either by the national health service, as part of their contract, or by a fee of some sort. I think that it would be helpful if the fee were a bit more up-front than it is now. The routine bits of paper that doctors are asked to fill out are of so little value that they really are not designed to give the Benefits Agency the information that it should have.
      As I said, we are debating not only the disbursal of £25 billion, but a clinical matter. In the past few years, I have had a couple of cases that are perhaps relevant to this debate, one of which involved a relatively young man with unstable angina. He was trained to be a builder's labourer. He was not a very bright chap. He was assessed under the all-work test and was told that he was fit to go to work. However, he was not competent to do anything except heavy physical work—no other job was available to him.
      The man was driven back into work, until I stopped him by telling him that he would drop dead. I am very glad to say that, soon after, he had his heart surgery. Now, he is much more stable and is even back at doing some good physical work. However, he is doing that within his own limitations.
      In the letter that I wrote for the man—incidentally, I did not charge for it—I asked the Benefits Agency who would represent it at the coroner's court should he drop dead after returning to work. I did not receive an answer from the agency, but it reinstated his benefit. It really is appalling that one has to go to such lengths to achieve the right result.
      Another case involved a man who was a gas fitter—which involves lots of crawling around little holes and turning one's head upside down—and had an unstable spine. He had very clear neurological signs, down his legs and his arms, of an unstable cervical spine and was awaiting surgery for it. Again, a clever person said that he was fit to go to work. If that man had continued in his job, he could have become a tetraplegic. Again, it was necessary for one to make that point so clearly, although any clinician worth his salt would have worked it out.

      503
      The Government acknowledge that there is an extraordinarily high rate of success in appeals. I must congratulate my constituent, Dr. Ralph Gasson, who is a doctor of divinity and devotes his life to representing people at appeals. He does lots of them, and has a better than 90 per cent. success rate. There really is something wrong with a system that allows that to happen.
      In response to the Select Committee, the Government said:
      A successful appeal does not necessarily indicate that the medical report was substandard.
      I think that that is nonsense. A successful appeal may not indicate that the medical examiner was substandard, but it does indicate that the methodology for acquiring the medical information required for the report was extremely substandard.
      People should not have to have an appeal before receiving what they need. Let us face it, benefits are just as much part of the health package as any direct medication, physiotherapy or occupational therapy.
      My final plea—I do not think that this issue was addressed by the Committee—is that we should have not only a better and smoother way into work, with better therapeutic earnings allowances and tax credits, but a way of dipping into work and coming out of it again if it does not work out. Many people are reluctant to take that step because they know that their mortgage interest payments, for example, will not be reinstated until quite a long time after they have discovered that they cannot cope. That is particularly important in respect of mental health, but it also applies to other areas.
      Generally, people are keen to make a contribution, but the present system seems either to goad them with very crude pushes or to put up barriers. I hope that the excellent report by the Select Committee will goad the Government into taking positive action.
      6.15 pm
      Mr. Eric Pickles: It is a great pleasure to follow the hon. Member for Isle of Wight (Dr. Brand). He was looking rather ashen-faced when we were discussing doctors' remuneration, but we are grateful that he stayed. I found his final point about people coming off benefit most interesting. Last year, the Minister and I served on the Standing Committee considering the Welfare Reform Bill, which made certain changes to protect the benefit claimed by disabled people. That was a welcome step and it might also be appropriate in respect of incapacity benefit.
      I, too, would like to congratulate the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on an outstanding report. I know that we always thank the chairmen of Select Committees and say that they have produced thorough reports that we are pleased to debate, but this is an excellent report. Since I have been a Front-Bench spokesman on these issues—and it has been two years now—I have been fortunate enough to consider a series of really good reports at a time of quite rapid change in social security. I am most grateful to the hon. Gentleman and the Select Committee.
      I do not want to cause the Minister any embarrassment or discomfort by saying that the Government's response to the report is well rounded and most welcome. It is sensible in its general approach, with one exception, to which I shall turn in a few moments.
      504
      The report deals with a service that is undergoing an enormous transformation. After all, it is only a relatively short time since the Government took the sensible decision to privatise the service, and it is fair to say that it is a good idea to monitor the great changes that are under way.
      At times during the debate, we rather lost sight of what the Government were seeking to achieve, which is set out on page 1 of their response:
      The Government chose the option of contracting-out because it believes that the public is entitled to good quality public services. What matters is what works.
      A couple of weeks ago, a Labour Member reminded me about a quotation from Deng Xiaoping, who I think is very new Labour in his general approach to most matters. He said that it did not matter whether the cat was black or white, so long as it caught mice. I feel that the report enshrines that general principle. We stand by the Government's privatisation programme and hope to see more.
      There have been considerable changes during the inquiry and since the report. We know that, generally, better accommodation has been available in which to carry out examinations; there has been a shorter waiting list; waiting times have been reduced and there have been some improvements to the audit system. However, the Select Committee was quite right to identify problems with regard to quality, timing and, most crucially, training.
      The hon. Member for Roxburgh and Berwickshire talked about benchmarks and said that it would have been better to have had some idea of how bad the system was before the process started. The hon. Member for Belfast, South (Rev. Martin Smyth) gave us an idea as to what the system was like before the changeover, and how it operates in his constituency. There was also a problem in respect of the specifications of the contract that was sent out. That is a common difficulty in central and local government.
      It is a common problem that people become anxious about matters that are not in the contract. The Committee's report mentions structural problems, and there is always some tension about omissions from contracts. When I was on a Select Committee, we had discussions about specifications for railways and we had an interesting witness appear before us. I asked him why problems were experienced in meeting the specifications and he said, "As a general rule, meeting specifications within a contract is a bit like walking on water. It is easy to do if both are frozen." In this case, items missing from the contracts have created much of the problem.
      It is indicative that the contracts contained no medical quality targets, only medical standards. My hon. Friend the Member for New Forest, West (Mr. Swayne) mentioned the problem of lack of pay for training, but much of the training requirement was additional to the contract. Of course, Sema bid on a tight basis for the contract and has ended up funding things that were not part of the contract price. In the process of re-examination of the contracts, we should perhaps ensure that quality targets are included in matters that are put out to tender.
      My experience of such matters goes back eight or nine years and I believe that things are getting better. Hon. Members have described the current problems, and dreadful cases still arise to which hon. Members will wish

      505
      to alert the Minister, but there is a general feeling of improvement. Much of the frustration that revolved around the old all-work test was really about assessment, because, before the changes were made, there was no real way to judge matters.
      I have some points to make that may be unfashionable and go against the general tenor of the debate with regard to desk-top scrutiny. I accept what the hon. Member for Hendon (Mr. Dismore) said about the risks, but there is a risk the other way. It would be worse if, in order to prove that everything was above board, we forced people to go through medical examinations when it was obvious from the medical documentation and case history that there was no need for them to do so. I cannot see the point of putting people through the anxiety of a medical examination when it is obvious that they will not pass it. The hon. Gentleman is right about the need for proper scrutiny, but it would be wrong to force people into medical examinations, thereby increasing the waiting list, for reasons of financial control, when their illness is evident.
      I said that the report was excellent. However, the response on mental illness was rather smug. There was something of the Mr. Nicely-nicely about it that I found unacceptable. The Committee's recommendation (h) is that
      the Chief Medical Adviser instigates a review of Medical Services' treatment of claimants with mental health problems.
      That is a good recommendation that will improve the whole process.
      Paragraph 33 states:
      Recently as part of the Personal Capability Assessment (PCA), development and thorough evaluation of methods assessing effects of mental health problems on ability to work, have gone some way to meeting that challenge.
      I think that that is wildly optimistic, and that the changes have gone only a little way in that direction. Baroness Hollis said last year:
      There are 200 advisers in the field who have gone through an average of 200 hours of training—and in some cases 300 or 400 hours—working towards established qualifications such as NVQ3.—[Official Report, House of Lords, 13 July 1999; Vol. 304, c. 214.]
      That gives an idea of the logistical problems facing Sema in getting training in place.
      The briefing that all hon. Members have received states that Sema is putting doctors through a three-day induction course, which will deal with cultural awareness, mental illness, post-traumatic stress, disability discrimination and chronic fatigue syndrome. That is all very sensible, but the nature of people receiving incapacity benefit is changing. Twenty-odd years ago, 9 per cent. of people had a mental illness; 10 years later, in 1988, the proportion was 16 per cent., and last year the figure was nearly 30 per cent.
      We cannot say that significant changes have been made in the process of benefit payments when forms such as the one displayed a little while ago by the hon. Member for Hendon place so much emphasis on physical condition. The forms for incapacity benefit and disability living allowance are difficult for people with a mental illness or disability to complete and thereby make a claim.
      Hazel Ruane of the National Schizophrenia Fellowship wrote a letter on 14 June to my hon. Friend the Member for West Chelmsford (Mr. Burns). It was passed to me by
      506
      my constituent Mrs. Murphy, on whom I rely for up-to-date information on the care of schizophrenia. The letter states:
      In fact, the plight of persons who are currently unemployed for reasons of mental ill-health is being made far worse by the present, growing trend of summarily stopping the payment of disability allowance for sufferers of schizophrenia, manic depression and other serious disorders. This may be an attempt to improve the statistics leading to the next election when, no doubt, there will be some self congratulation from the government regarding supposed achievement of manifesto targets… So, far from improving the implementation of care in the community, this haphazard termination of disability allowances is bound to damage it entirely.
      A similar letter was sent to the Secretary of State.
      There needs to be a balance to ensure that people with a mental illness or disability are not excluded from employment. We do not suggest that such people should be excluded from getting work, but the balance must be considered very carefully, and with sensitivity.
      I have a couple of illustrations. I recall seeing the Minister and some Labour Members a couple of days ago at an Alzheimer's Disease Society reception. I talked to a lady there who had been through the assessment process. She had been asked whether her husband could walk a particular distance. Of course he could—her worry was whether he could find his way back home if he wandered off while he was walking that distance. That was not taken into account during the scrutiny of the case. She had to fight very hard to get that idea across.
      As for schizophrenia, there was a difficult case at my advice surgery involving a constituent who had gone through the process. Her son was asked how high he could raise his arm above his head, but my constituent was more concerned about his ability to organise his affairs.
      Someone who suffers from manic depression may give a false impression of their state of health. If manic depressives are asked how they feel, they say, "Life is wonderful, I feel great. I can do anything; I'll apply for anything. I really want to go out to work." Then, with just a click of the fingers, everything changes. That is not catered for in the forms and the way in which the assessment is made.
      We have come a long way in the way that people with a mental disability are treated. However, we are a long way from achieving the sensitivity that is necessary for the various medical assessments. Life is pretty much stacked against people who are mentally ill or suffer from a mental disability. We must deal with them sensibly, and the tests that we apply should reflect that.
      We all received briefing documents today from MIND, which supports the report of the Select Committee on Social Security. Given the narrow nature of our objection to this report, which by and large we endorse, I ask the Minister to look again at that recommendation and see whether he can change the Government's mind with regard to reassessing the process, from the form onwards. If he succeeds in doing so, that would be the icing on the cake for this excellent report.
      6.32 pm
      The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): I start by echoing the sentiment expressed by many right hon. and hon. Members in thanking the Select Committee on Social Security for producing this report. The Chairman and

      507
      members of the Committee have provided a service to the House in throwing a spotlight on an area of public policy that needs to be improved. The Government are strongly committed to improving both the administrative efficiency of the way in which medical reports relating to benefits are conducted, and the medical quality of those reports.
      Let me start with the quality of the service that we inherited from our predecessors when we came to power three years ago. Our view was that the previous in-house service—the Benefits Agency medical services, or BAMS—was not performing satisfactorily in the areas of administration or medical quality. One of the first tasks in which the Government engaged after the election was to consider ways of changing the culture within the medical service and improving standards of service to the public.
      We decided that we would be more likely to achieve the changes that were necessary by making a fresh start with a new organisation. That was fundamental to the decision to go ahead with putting the work out to contract. That was based on many years of experience of running an in-house service.
      Contracting out the service meant that standards of performance had to be defined, which had never happened before. They had to be put on paper so that people knew what was expected of them and performance could be measured. That was done in the contract, and data are collected monthly to compare performance in medical services against the standards set out.
      Some of the standards are administrative. For example, there is a requirement that 95 per cent. of incapacity benefit examinations should be conducted within 50 days. In September 1998, when Sema took over the contract, achievement of that standard was 75 per cent. Now, the target has been hit in all three areas of the Sema contract. By April 1999, it had been achieved in the south-western area; by June 1999, it had been achieved in the north; and, by November 1999, it had been achieved in the south-east.
      A second administrative requirement is that 95 per cent. of disability living allowance examinations should be conducted within 20 days of being requested. In September 1998, when Sema took over the contract, only 62.5 per cent. of examinations were made within 20 days. That was the standard of performance inherited from BAMS. Now, 95 per cent. has been achieved in two of the three areas. The target was hit in the north-west last October, and in the south-west in November. The target is still not met in the south-east, however, where 87 per cent. of DLA examinations were conducted within 20 days in May. Improvements remain to be made. None the less, there have been major, measurable and demonstrable improvements in the administrative efficiency with which Sema provides a service.
      Other standards in the contract relate to the quality of medical work conducted by doctors. For example, the proportion of reports graded A, B or C is measured. As the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said, a C report is not fit for purpose, a B report is fit for purpose but not perfect, and an A report fully meets all requirements under the contract.
      A further example of medical quality standards is the proportion of doctors who complete required training. As I told the Committee some months ago, we have not yet seen a demonstrable improvement in the medical quality of the work being carried out. There has been no deterioration, but no improvement either. I am concerned
      508
      about that. Our principal aim in contracting out the service—we had many aims, but this was the main one—was to improve the medical quality of reports written by doctors. Sema shares our concern, and we—in the shape of the Government's chief medical officer—will work closely with the company to improve the medical quality of reports and the quality of customer service provided by doctors.
      I shall say a little about standards of customer service. Sema employs more than 3,000 doctors, most of whose work fully conforms with the standards set out in the contract. Good practice in terms both of medical quality and customer service is the norm, but there are still too many cases—a small minority, but too many—of bad practice. All complaints are investigated, and we find some are justified and others not. In some cases, where there is a conflict of report between the benefit claimant who has complained and the doctor who conducted the report, it is simply impossible to tell where the truth lies. We must address that matter.
      The Select Committee's discovery that there was a problem over the public perception of Sema and its predecessor, BAMS, was not new. Before the Committee instigated its inquiry, I had called two meetings for Members in the House—as the hon. Member for Roxburgh and Berwickshire acknowledged—so that they could give me case studies that demonstrated their concerns. I wanted to collect and learn from such examples in order to discuss the problems with colleagues. I also wanted to explain the improvements that we are undertaking: in recruitment standards; postgraduate medical education; in-service training; the base for professional standards—the new diploma in disability assessment medicine; and in the quality of clinical advice to doctors.
      I held two meetings because there was such a large response from hon. Members who wanted to express concern; so many wanted to attend the meeting that they could not reasonably be accommodated in Committee Room 14. Those meetings may have been one of the many factors that prompted the Select Committee to investigate the matter.
      To follow up those discussions with colleagues, I convened—with the help of the National Association of Citizens Advice Bureaux—a series of regional meetings throughout the UK, so that welfare rights advisers from CABs, local authorities and other bodies could share with us their experience of problems with the service. That was extremely useful. As a result of those meetings, Sema is revising its complaints procedures, as we recorded in our response to the Committee's report; that action was welcomed by many hon. Members.
      I shall outline my priorities, as the responsible Minister, for the year ahead. Above all, I want to achieve significant improvements in medical quality. I took advice from the Department's chief medical adviser on which of the indicators that we use regularly to collect data under the contract best showed medical quality. In our response to the Select Committee, my right hon. Friend the Secretary of State set out challenging targets for Sema on four specific matters.
      The first was that, within one year, the percentage of C grade reports, across the whole spectrum of benefits, should be reduced to less than 5 per cent. I point out to the hon. Member for St. Ives (Mr. George) that we do not

      509
      want a reduction to 10 per cent. In the first six months, we want the proportion reduced by 10 per cent., with a reduction to 5 per cent. overall. The figure of 5 per cent. is higher than I would like, but is nevertheless a challenging target to meet in a year. Sema will have to work extremely hard to hit that target. We believe that it is achievable—as does Sema—but it will not be easy. If we achieve that target, we shall consider how we can do even better in the years to come.
      Secondly, within one year, we require Sema to improve its compliance with the scrutiny guidelines for incapacity benefit claims so that the proportion of non-compliant reports falls below 5 per cent.
      The third target is that, within one year, we require Sema to deliver training for all doctors in three categories. We have decided to set outcomes as a target—the fact that doctors complete the training courses, rather than that they undergo a specific number of days of training.
      We, jointly with Sema, have selected three categories. First, there is to be a course on assessment of people with mental health problems, which is an issue that several hon. Members have raised. Secondly, there is to be disability awareness training. Thirdly, Sema has developed a new training package on how to avoid creating distress among people with musculo-skeletal problems—the biggest single group of people claiming incapacity benefit—by using what I would describe in lay terms as a hands-off examination process so that, where there is an alternative, people are not manipulated and do not have their joints moved by the doctor. Of course, on occasions, manipulation will be necessary, but the package covers alternatives to that.
      Our fourth target is to improve customer satisfaction rates by 90 per cent. within two years.
      After setting those targets, not before, the Government discussed them with Sema. Therefore, they were not targets set by a process of bargaining or negotiation; they were targets set by the Government because we believe that they are attainable, and we believe that they will make a significant difference or reflect a significant improvement in medical quality. We have since discussed them with Sema. It agrees with us that they will be extremely challenging, but it also agrees with us that they can be met.
      I shall now respond to the contributions that hon. Members have made to the debate.
      Mr. Kirkwood: Those are very helpful confirmations. Do I understand the Minister to be saying that those performance improvements are being required of the contractor without any compensating financial allowances?
      Mr. Bayley: Yes; that is exactly what I am saying, and those targets are targets which the contract itself requires a contractor to meet, so it is not a matter of requiring a contractor to do anything other than what the contract already states. We set the contract in order to drive up medical standards. We have not seen that reflected in the monthly reports. We want to see it reflected. Sema, too, wants to see it reflected. That is our approach.
      Perhaps I should comment on a point raised by many hon. Members, including my hon. Friend the Member for Clwyd, West (Mr. Thomas) and the hon. Member for
      510
      Roxburgh and Berwickshire, who were unhappy with the concern expressed by the Government that no attempt had been made to check the reports of fault with medicals that had been brought to the Committee's attention by citizens advice bureaux and quite a wide range of voluntary bodies. I am not in any sense, and nor are the Government, complaining that the Committee should not collect that sort of evidence.
      As I explained in an intervention in the speech by my hon. Friend the Member for Hendon (Mr. Dismore), the reason that I became worried was that I wanted to investigate some of the complaints to find out what had happened. Perhaps I can explain my concern to the House by focusing on one group of complaints—the group of complaints about racism or cultural insensitivity. In the report, the Committee cited five identifiable but anonymous cases. The Committee, because it had received information about those cases anonymously, could not give us information—even confidentially—to allow us to identify those cases.
      We have been able to identify two of the cases from the circumstances described by the Committee, and in both cases the Committee's description of the circumstances accurately reflects what happened. In both cases, the doctor concerned, who had behaved quite inappropriately, was suspended and retrained. Both doctors are now back at work. Obviously, their work is being monitored in the way that one would expect after such an occurrence, and no further complaints have been received.
      I simply put it to the House that the complaint has been made, and that inappropriate behaviour has occurred in a very few cases, quite reprehensibly and quite wrongly, but that in response the Government have done exactly what the Committee and the House would expect us to do—to suspend the doctor, to address the issue through training and then to monitor the change in the performance of the doctor that occurs after training. My hon. Friend the Member for Hendon cited several other cases, and I hope that he can persuade his informants to release the facts about them, so that we can examine them closely.
      The hon. Member for Roxburgh and Berwickshire made an interesting and important point about benchmarking. Had the contracts gone to three different companies, we would have been able to benchmark one company against another. I am considering the issue further, but we can, to some extent, benchmark between the different areas. In relation to administrative efficiency, I said that we were able to compare the performance of each of the three areas. That is useful, but we may be able to consider other ways of benchmarking. I need to inquire into that further.
      The hon. Gentleman, like my hon. Friend the Member for Hendon and the hon. Member for New Forest, West (Mr. Swayne), asked whether enough money was in the contract to deliver it. We expect Sema to deliver a 4 per cent. saving each year, which is broadly what would have been required of BAMS if it had remained an in-house contract. I confirm that Sema expects to make a profit on the contract, although it expects to make less of one than it would on an information technology contract in the sector in which it has been working for a long time.
      When one contracts out a service for the first time, it is difficult for us as a Government, and for those bidding for the work, to get costs right. We had an open-book

      511
      policy and bidders were able to examine the way in which we conducted the work, to examine our expenditure and to look for ways to make management savings. However, when a private firm bids for a contract, it hopes to make a profit and it also accepts risk. That risk justifies the profit, and it would be intolerable if the Government were expected to remove all risk and to contribute large profits to companies when they bid high and obtain the work. Some Members on the Opposition Benchers are nodding agreement, and if a company bids low, it must accept the risk attached to that. Nevertheless, we believe that the cost of the contract is broadly comparable to what the service would have cost in-house and that it is perfectly achievable. Sema also takes that view.
      My hon. Friend the Member for Hendon raised an interesting point when he asked why we did not negotiate to get some money back because of a fall in the scrutiny ratio, and then redistribute it in the form of remuneration to doctors. In a roundabout way, that is what we are doing. I told the Committee that, each year, we have an annual negotiation over the cost of the contract with the contractor. We make various bids for the return of moneys when, for example, there is a fall in the scrutiny-to-examination ratio, and the contractors make bids for additional costs that are not covered in the contract.
      This year a six or seven-figure sum has been returned to the Department in relation to costs that have not been incurred by the company, and those include the costs not incurred in scrutiny cases. We have also decided to pay a similar sum—albeit not such a large one—to the company in respect of additional work principally for the introduction of a personal capability assessment. Although the incapacity element of the personal capability assessment test is exactly the same as for the incapacity and the all-work test, an additional part of the test examines personal capacity. Therefore, in a roundabout way, the Government are saving money on scrutiny and it is being recycled to the contractor to pay for more extended medicals in the form of personal capability assessments. That will be reflected in the expenditure that the company makes on doctors and doctor's time.
      I return to the point about multilingual notices. Perhaps I should start by saying by saying that, on reflection, I do not defend the statement in the Government's response which says that as we do not have multilingual notices in the form suggested by the Select Committee in other parts of the Benefits Agency, that is a jolly good reason for not having them in BAMS. I agree with hon. Members on both sides that that is not a good argument. One should look at the merits of the case, and I give the House an undertaking that I shall do so.
      Incidentally, it is not true that we do not have multilingual notices. The Service First unit in the Cabinet Office produced a report on the attitudes of people from minority ethnic groups to Government services. People were asked whether they were aware of the fact that services provided by various Departments, such as leaflets, audio and video tapes and interpreters, were available in their own languages, and whether they found that useful. I am not wholly satisfied, but I am pleased to say that the Benefits Agency came second on that list,
      512
      after GPS, but above 31 other Government services, including NHS hospitals, local councils, libraries, primary schools, citizens advice bureaux, council house services, and so on. Twenty-six per cent. of people from minority ethnic groups were aware of the provision of services in their own languages and 17 per cent. said that that was useful.
      Mr. Pickles: The hon. Gentleman should be complimented on his straightforwardness. Will he tell the House which of his ministerial colleagues approved the text of the Government's response?
      Mr. Bayley: The responsibility was mine. I shall be frank with the House, as I recall putting a red line through a certain sentence, but I failed to see that through to the end. I do not defend the statement, which I believe to be wrong. We shall continue to investigate whether we could improve our language and translation services.
      A wide range of matters were raised by hon. Members, some relating to training and the payment of GPs for undertaking training to do DSS work. Under their NHS contract, GPs are required to spend the equivalent of five days a year on training and, as independent contractors, they are not paid for that. The training regime operated in BAMS is broadly the same. The training is provided free, and doctors do not have to pay for the courses, but have to attend in their own time. Most of our training will give doctors credit against their GP training requirement—which they would have to do anyway—which will help to deal with the problem of their reluctance to undertake training because they are not paid for the training sessions. If the training is of a medical nature, such as mental health assessment or looking at medical conditions, that counts against the GP training requirement. However, it will not count if it is to do with the way in which the benefits system works.
      My hon. Friend the Member for Clwyd, West urged the Government to try and capture feedback from appeals. As the hon. Member for Roxburgh and Berwickshire knows, five years ago, I raised that issue as a constituency Member of Parliament with the Benefits Agency. We do not think that simply collecting the results of appeals would give a good indication of whether the doctor's report was good, as many other factors are involved, such as whether the reports of the GP, specialist and decision maker are good reports. Judge Harris, who runs the tribunal service, has given me a commitment that he will look at whether we could investigate if, for instance, a chairman of an appeal believes that a particularly poor medical report has been provided. The chairman could draw that to the attention of our chief medical adviser and we could investigate.
      Time moves on, so I shall summarise. The Government are clearly demonstrating commitment to improving the medical quality of our reports, and customer care, by setting four challenging new standards. The goal, of course, is to improve the quality of the service to the public, and the Government and Sema will work together closely to see that that is achieved.
      It being Seven o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to Order [25 October 1999], to put the Questions necessary to dispose of proceedings.

  ESTIMATES, 2000–01

    Class XVI, Vote 4
    Resolved,
    That a further, revised sum, not exceeding £482,077,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges which will come in course of payment during the year ending on 31st March 2001 for expenditure by the Customs and Excise Department on the administration of taxation; the operation of customs and revenue controls and other Customs and Excise-related services; and payments in respect of Shipbuilder's Relief and the Customs and Excise National Museum.

    Class XII, Vote 3
    Resolved,
    That a further, revised sum, not exceeding £1,110,424,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges which will come in course of payment during the year ending on 31st March 2001 for expenditure by the Department of Social Security on administration, for agency payments, expenditure incurred as part of the Welfare to Work initiative, expenditure on behalf of the Department of Health, and for certain other services including grants to local authorities and voluntary organisations and other organisations.

  ESTIMATES AND SUPPLEMENTARY ESTIMATES, 2000–01
  Resolved,
  That a further sum not exceeding £133,029,399,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for Defence and Civil Services for the year ending on 31st March 2001, as set out in HC 374, 375, 376, 377 and 567.
  Ordered,
  That a Bill be brought in on the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Andrew Smith, Dawn Primarolo, Miss Melanie Johnson and Mr. Stephen Timms do prepare and bring it in.

  CONSOLIDATED FUND (APPROPRIATION) BILL
  Mr. Stephen Timms accordingly presented a Bill to apply a sum out of the Consolidated Fund to the service of the year ending on 31st March 2001; to appropriate the supplies granted in this Session of Parliament; and to repeal certain Consolidated Fund and Appropriation Acts: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed [Bill 151].

  Illegal Camping
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]
  7.1 pm
  Mr. Mark Todd: South Derbyshire is a largely rural district to the south and west of Derby. It is increasingly well connected to the road network, with the A50 Stoke-Derby link running across the constituency and with the MI to the east. It features in many routes through the midlands. It is thus an increasingly attractive stopping point for travellers.
  My concern today is the impact that illegal occupation of sites by travellers and those who claim to be travellers has on the perception and reality of local law enforcement. My constituency has faced regular occupations during the past three years. There have been several occupations of Highways Agency property in the Foston area. In Findern, the village where I live, there was a lengthy occupation of a site whose owner was unknown, which made proceedings difficult. Last summer, the common at Church Gresley, a heavily populated area on the edge of Swadlincote, was occupied by 22 caravans, legitimate users were threatened and sports pitches were made unusable. When the occupiers left, the council spent £2,500 of taxpayers' money clearing the common.
  Recently, land on the edge of Willington was occupied. When it was abandoned, the scene resembled a war zone full of abandoned, burnt-out cars. The Highways Agency cleared the site at public expense and introduced expensive security measures to prevent a repetition.
  There have been many short-term incursions, some of which have caused little concern. Since 1994, the district council alone has had to obtain in all 44 court orders for possession. The onus in each case of which I am aware was on the site owners to obtain possession orders and eventually to enforce them, except that of the land at Findern, where the district council sought an order as no owner was forthcoming. It is, therefore, reasonable to assume that other landowners in the area—especially the Highways Agency, which has suffered greatly—have had to take out many court orders.
  Police action has been limited to observation, vehicle checks and assistance with serving the orders, apart from taking action concerning one stolen vehicle, to which I shall refer later. On no occasion was section 61 of the Criminal Justice and Public Order Act 1994 used, under which the police are allowed to direct occupiers to leave a site if more than six caravans are involved, threatening behaviour has been used or damage is evident. On only one occasion has any attempt been made to recover the cost of damage and waste disposal.
  From my questions to the Government, it seems that powers available under section 59(8) of the Environmental Protection Act 1990 reserved for this purpose are seldom used. It is, perhaps, a comment on those powers that they are not even referred to in the guidance issued in 1998 on the management of illegal occupations.
  Derbyshire county council and South Derbyshire district council have attempted to meet the needs of those who choose a itinerant way of life. There is an 18-pitch site for long-term occupation at Foston and another eight pitches for short-term use at Lullington. The sites cause no local concerns and are well managed. Those using

  515
  them are well supported by education and social services, and a number of children attend local schools. Local taxpayers contribute £70,000 a year towards the running costs, and more than £100,000 has been spent on updating the sites over recent years.
  What, then, is the impact of the apparent abuse of an area's hospitality? First, there is the reality of the crime that stems from those occupations. Most cases involve forced entry and criminal damage. In one instance, a stolen lorry was located on site and seized by the police after resistance, including the throwing of bags of urine at officers. There have been reports of threatening behaviour to other legal users of the land. There was sufficient concern about potential public order offences to move a fair, which has historically used adjacent land at Church Gresley. I set aside the unproven claims that are often made of offences against neighbouring property.
  As important is the perception of crime. People regard the occupation of someone else's land by force as a crime. They would expect no support or sympathy from the law enforcement agencies if they chose to enter their neighbour's home or garden by force, threatened the owners and passers-by and left behind waste as they departed. They regard the authorities' apparent powerlessness as indicative of both double standards and weakness. They become angrier still when they find that they must fund the clearance and repair of a site. In a typical year, South Derbyshire district council pays out more than £5,000 for waste disposal from illegal sites.
  What should be done? First, we need consistency of police enforcement. That was described fully in the research report that accompanied the 1998 guidance on the subject. It is clear that some police authorities are prepared to use section 61 of the 1994 Act, while others are not. Although one must respect local determination of operational priorities, wide variations in practice cause problems. If one force chooses to use section 61 with vigour while another uses restraint, the word soon gets around, and travellers with ill intent are drawn to the more welcoming legal environment. There is already anecdotal evidence that that happens in Derbyshire, where the powers are seldom, if ever, used.
  Ms Julia Drown: Does my hon. Friend accept that, even when authorities use section 61, there is the problem that travellers who have caused a nuisance can just move down the road, creating a problem a little further on? Has consideration been given in his area to using order 113 through the High Court, which Swindon borough council uses? It allows the council to move travellers who have caused a nuisance out of all borough council-owned land.
  Mr. Todd: I thank my hon. Friend for her intervention. That particular order is not used in my area, but I shall deal later with the point about transfer to other sites.
  Secondly, the provision of legal sites needs to be recognised and encouraged. If a site is available, there should be an expectation and a legal obligation that it will be used. It should be possible for an authority to demand the removal of illegal occupiers to such a site while any necessary social investigations are conducted. Currently, investigations are required before a move is made. If an alternative legal site is available, I see no reason why the campers should not be moved to that site while
  516
  investigations are completed. If such a move is resisted, the persons involved should be deemed in contempt of court, with appropriate penalties.
  Thirdly, it should be possible to prevent illegal occupiers from simply moving to a neighbouring site following a court order. That has happened frequently in south Derbyshire, with one group moving several times in Foston to alternative sites, once possession had been granted on the one that they were occupying.
  Fourthly, it should be possible to prevent any illegal occupation of a site once possession has been granted, rather than merely preventing occupation by those against whom the order has been physically served. A major problem is the later arrival on site of others who have not had an order served on them but who are then required to face an order, delaying their eventual removal. Latecomers drawn to the site should be covered by the same order.
  Finally, ways should be explored that would allow recovery of the costs of repair and waste disposal from those responsible. It has been suggested—the guidance notes suggest this—that skips and toilets be provided at public expense for illegal occupiers. Does that not give legitimacy to what they do? I hesitate to suggest on-the-spot fines, and anyway cash machines are scarce in my area, but I cannot believe that it is beyond our art to devise mechanisms that offer a genuine and realistic threat of cost recovery from those involved.
  The taxpayers whom I represent are happy to offer hospitality to travellers, substantially at local taxpayers' expense, but a right to choose that way of life carries an obligation to behave in a way that meets other people's reasonable norms. We also expect consistency from the police and appropriate action when the law appears to be being broken. If those expectations are not met, that willingness to offer facilities at local cost is threatened. It is hard to see how one can sustain that commitment if there appears to be no local advantage in the provision of such sites. More importantly, respect for law enforcement agencies is also jeopardised.
  I hope that the Minister, in his response, will set out how the Government can meet the concerns that I have expressed on behalf of many residents of South Derbyshire who are frustrated by the current position.
  7.12 pm
  The Minister of State, Home Office (Mr. Charles Clarke): I sincerely congratulate my hon. Friend the Member for South Derbyshire (Mr. Todd) on securing this important debate on a matter which, as I think he knows, affects not only South Derbyshire, but many other parts of the country, and on the powerful way in which he put his case.
  The Government are fully aware of the misery that can be caused by some travellers, particularly on unauthorised sites. Home Office Ministers receive a steady stream of complaints about unauthorised traveller sites from hon. Members and members of the public.
  Key problems include criminal damage to bollards, fences, gates and so on, to gain access to land; a rise in crime and disorder in the vicinity of some camps; and mess and litter left on sites which must be cleaned up by landowners or local authorities. My hon. Friend identified a number of other specific aspects which, as I say, I regret are not particular to South Derbyshire, but occur in too many places throughout the country.

  517
  It is wholly wrong that any criminal activity should be tolerated in respect of travellers. The law should be enforced as with all other sections of the community. It is for the police to ensure that any offences are properly investigated and that the law is enforced.
  I come to my hon. Friend's first point in relation to his concern that the police in Derbyshire are not using their powers under section 61 of the Criminal Justice and Public Order Act 1994 to remove trespassers from unauthorised sites, and that there is an inconsistency in police enforcement of those powers in different force areas. My hon. Friend the Member for South Swindon (Ms Drown) reinforced that point in her intervention.
  Section 61 gives the police the power to remove people who are trespassing with intent to take up residence and who have been asked to leave by the landowner. That is a serious power which can be used when certain conditions are met. They are that trespassers have more than six vehicles on the land, or have caused damage or used threatening, abusive or insulting behaviour towards the landowner or person acting for him or her. Both police and local authority powers to direct trespassers to leave land under the Criminal Justice and Public Order Act are, as my hon. Friend said, discretionary.
  Ministers cannot tell the police how to go about enforcing the law in any particular case, for reasons that the House will understand. It is a matter for the operational judgment of individual chief constables. Even though these powers are discretionary, the Association of Chief Police Officers takes the view that as police officers are responsible for public order and the prevention and detection of crime, it is mainly in these circumstances that the use of the powers should be considered.
  On that basis, ACPO issued revised operational guidelines on the police use of these powers in April 1999. It is hoped that this will eventually make for a more consistent approach between and within police force areas. It is clear that police powers may be used at an early stage where necessary when problems of crime, disorder or serious disruption to the community are associated with unlawful encampments.
  However, my right hon. Friend the Home Secretary recognises that we do not have completely satisfactory arrangements in place for dealing with the problems caused by unauthorised encampments, particularly where they cause disorder or other problems for local residents or landowners. My right hon. Friend is giving this matter his personal attention and expects shortly to be able to announce changes, which we hope will be widely welcomed throughout the country, including by my hon. Friend's constituents, who have borne the brunt of the problems caused by unauthorised encampments. As I have said, my right hon. Friend is personally actively involved in discussions with the Department of the Environment, Transport and the Regions to reach a position where we can make announcements that I hope my hon. Friend will find satisfactory.
  My hon. Friend queries why section 59(8) of the Environmental Protection Act 1990, which is reserved for fly tipping, is seldom used against travellers on unauthorised encampments. There are a range of stringent controls in place to ensure that waste is managed safely, and is recovered or disposed of without harming the
  518
  environment or human health. The main controls are set out in part II of the 1990 Act, and fulfil our obligations under the amended European Community framework directive on waste. The Environment Agency is responsible for the enforcement of most of these controls.
  Under section 33 of the 1990 Act, it is unlawful to deposit, recover or dispose of waste without a waste management licence, contrary to the conditions of a licence exemption or in a way that causes pollution of the environment or harm to human health. The consequences for anyone contravening these controls are potentially very serious.
  Unfortunately, waste is sometimes fly-tipped. Where this happens, it is clearly essential that steps are taken to reduce or eliminate the risk of environmental pollution or harm to human health, and to ensure that fly-tipped waste is disposed of safely and properly. Section 59 of the 1990 Act provides the Environment Agency and local authorities, in their role as waste collection authorities, with the means to do so. The section provides that where waste has been deposited illegally, the Environment Agency or a local authority may serve a notice requiring the occupier of the land to remove, eliminate or reduce the consequences of the deposit. However, a person on whom a notice is served has a right of appeal to a magistrates court. Where an appeal is made, the court must quash the requirement imposed by the notice if it is satisfied that the appellant neither deposited nor knowingly caused or permitted the deposit of the waste.
  Under section 59, the Environment Agency or local authority may themselves take steps to remove fly-tipped waste where the occupier fails to comply with the notice or there is no occupier of the land, or the occupier neither made nor knowingly caused or permitted the deposit, or there is imminent danger of pollution of the environment or harm to human health.
  Mr. Todd: Does my hon. Friend accept that mere occupation of the site and allowing waste to be tipped there, regardless of who on the site commits that act, would be an offence on the basis that that is permitting the depositing of waste?
  Mr. Clarke: I accept the substance of my hon. Friend's point. I am not prepared to venture into a legal statement on whether he is right or wrong in the technicality that he has set out. I was about to conclude this part of my remarks by saying that the Environment Agency or a local authority is entitled to recover the costs incurred in exercising these powers from any person who made or knowingly caused or permitted the deposit of any of the waste. That precise point is being addressed in current discussions between the Home Office and the Department of the Environment, Transport and the Regions. My hon. Friend was right to make the point, but I have learned to take great care before offering opinions about what the law says or does not say on specific points.
  My hon. Friend also suggested that there should be powers to prevent travellers who have been evicted from one site from staying at another site further down the road, and to prevent them from occupying land that has been repossessed from another group of travellers. We believe that the standards of behaviour expected of travellers should be the same as those expected of the settled community. Problems that arise from any way of life and

  519
  affect the rights and freedom of others should be treated in the same way. Local authorities and the police have adequate powers to deal with matters through the methods that I have outlined.
  To place land out of bounds to all unauthorised campers would effectively make unauthorised camping an immediate offence. It would be dangerous and possibly iniquitous to do that, especially as local authorities no longer have a duty to provide accommodation for gypsy caravans. We believe that it is essential, in the interests of natural justice, to retain the requirement for a court order before eviction can take place. We have no plans to remove the requirement for local authorities to obtain a court order.
  Gypsies may have a genuine reason, for example a medical emergency, for camping on unauthorised sites. If that is the case, it is right that they should have the opportunity to present a defence to the court against an eviction order. To remove the necessity for a court order and the opportunity for a camper to present a defence could create a culture of immediate forced eviction by local authorities without due consideration of all the issues.
  Ms Drown: Does my hon. Friend agree that, if travellers were causing a nuisance which had been proved in court, and provided that there was a designated site to which the travellers could move on, it would be reasonable to say that they should either move off borough council-owned land or move on to the designated site? Otherwise, we may have the problem that I experience in my constituency: residents simply do not understand why the council cannot stop travellers who cause a nuisance from moving down the road.
  Mr. Clarke: My hon. Friend's judgment is correct. She makes a similar point to that of my hon. Friend the Member for South Derbyshire. I was trying to explain that implementing the course of action that he suggested is difficult and has some serious human rights implications, with which we are wrestling.
  Immediate eviction would also make it impossible for local authorities to follow the advice in Department of the Environment circular 18/94, which states that local authorities should take account of the duties they may owe to campers. The Human Rights Act 1998, which comes into force in October, will also make it easier for people to challenge violations of their rights under the European convention on human rights.
  My hon. Friends the Members for South Swindon and for South Derbyshire make a powerful point, and I shall carefully consider ways in which to expedite the procedures to deal with the problem. As with so many aspects of the law, one of the difficulties is squaring rights, which are important, with the time taken to resolve a problem. In principle, there is no reason why a rapid resolution would not go some way to tackling my hon. Friends' anxieties.
  Mr. Todd: Will my hon. Friend consider whether the rights of travellers in the position that he outlines might be as adequately protected on a designated, legitimate site provided by the local authority, and that pointing out the availability of pitches on legitimate sites would be a
  520
  reasonable basis for demanding their immediate removal from the site that they were occupying while their social circumstances were reviewed?
  Mr. Clarke: There is a powerful case for that. In his original speech, my hon. Friend made points that were worth considering about the procedures and the times at which some matters are assessed. I am happy to consider them very carefully.
  There is a great difficulty, about which I think I should be frank. I refer to a conflict between the rights of individuals to which our whole society subscribes, when criminality or similar issues are not involved, and the rights of surrounding communities. Those are precisely the issues that my right hon. Friend the Home Secretary is currently discussing with colleagues in the Department of the Environment, Transport and the Regions, with the aim of finding a solution.
  Our fundamental point of principle is that travellers have a right to live their lives as they do, freely and in an entirely acceptable way. By the same token, however, criminal or anti-social behaviour on the part of any section of the community should be treated equally, across all communities. I think that most Members on both sides of the House accept both those principles; certainly, Labour Members do. The question is how to make them work in practice. The complaints that we receive so frequently—complaints cited articulately by my hon. Friend—concern circumstances in which those two rights have not been married satisfactorily. Our current discussions seek to deal with that.
  My hon. Friend said that the provision of legal sites generally needed to be encouraged. I support that approach, for reasons connected with one of the rights to which I have referred. I am pleased to note that there is local authority site provision in South Derbyshire, and I am glad that the local authority takes its responsibilities seriously. That is, of course, what local authorities are advised to do by the Government. Site provision is an important element of the managing of unauthorised camping, for the reasons given by my hon. Friend.
  Circular 1/94, "Gypsy Sites and Planning", places gypsies on the same footing as others in relation to the planning system, while seeking to recognise their special needs. It applies to local authority and private gypsy sites, and advises local planning authorities to assess the need for gypsy accommodation in their areas and, wherever possible, to identify in their plans locations suitable for sites. When that is not possible, they should set out clear, realistic criteria for suitable locations as a basis for site provision policies.
  The emphasis in circular 1/94 is on identifying suitable locations for sites. The Department encourages local authorities to discuss the preparation or revision of the plans with all concerned, including travellers themselves, their representative bodies and local support groups. We also think that representatives of travellers should consult local authorities on planning matters before buying land on which they camp for which planning permission would be required. The Department is commissioning separate research on the management and condition of existing local authority sites, which will inform future policy development.
  We strongly agree with my hon. Friend's approach. As I said earlier, my right hon. Friend the Home Secretary, my Department and the Department of the Environment,

  521
  Transport and the Regions are actively reviewing the joint Home Office-DETR good practice guidance. The document was first published in October 1998, and advises that local authorities should have an overall strategy. The strategy should include needs assessment and site provision, as well as eviction policies, which should be developed with the local police force.
  The aim of the joint guidance is to encourage a balanced approach to managing unauthorised camping. It is necessary to balance the nuisance that can be caused to members of the local community with the rights of campers. As I have said, research commissioned by the DETR and the Home Office is under way, with the aim of reviewing the good practice guidance on unauthorised camping. The aim is to establish the extent to which the guidance is being followed, how well it is working and whether there are any gaps that we need to address. The final report on the management of local authority sites is due in September, and will give us a basis on which to make future policy decisions.
  Let me summarise our central approach. We believe that the police operational guidelines were strengthened and clarified by the Association of Chief Police Officers last year, following meetings with Ministers. They make it clear that police powers should be used primarily when there are problems of crime, disorder or disruption to the local community associated with unauthorised encampments.
  Ministers have made it clear that police powers can be used at an early stage when necessary. I emphasise above everything that joint Home Office-DETR guidance encourages a multi-agency approach to dealing with
  522
  problems caused by unauthorised camping. As with many areas of policy, it seems critical that we have a genuine partnership approach that determines how we operate. A partnership approach on the basis of clear guidance and guidelines, both from the Home Office and the DETR and from the Association of Chief Police Officers, will give us a basis on which to develop policy.
  As I have said, my right hon. Friend the Home Secretary is considering joint guidance and whether any changes are needed. It must be made clear—I have sought to do so in the debate—that toleration of encampments does not stretch to toleration of crime, disorder or disruption to the local community. As I have said, he hopes to make an announcement shortly on those matters.
  We have no evidence to suggest that police powers are currently used in a discriminatory way. We are aware of the problem of welfare inquiries that must be made by local authorities, fulfilling their statutory obligations, before taking eviction action. We are willing to consider whether any changes are necessary. Although the provision of sites is primarily a matter for the DETR, we acknowledge my hon. Friend's approach towards the important responsibilities that must be fulfilled and his efforts to move the matter forward.
  It is a vexed and difficult problem. I am delighted that my hon. Friend has secured time to debate it. I hope that I have been able to offer at least some reassurance to my hon. Friends who have spoken that we take the matter seriously. We address it as a matter of urgency and concern.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes to Eight o'clock.