Commons Sitting of 6 November 2000

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

    GREENHAM AND CROOKHAM COMMONS BILL
    Ordered,
    That the promoters of the Greenham and Crookham Commons Bill shall have leave to suspend proceedings thereon in order to proceed with it, if they think fit, in the next session of Parliament, provided that notice of their intention to do so is lodged in the Private Bill Office not later than the day before the close of the present session and that all fees due up to that date have been paid;
    That on the fifth sitting day in the next session the bill shall be presented to the House by deposit in the Private Bill Office;
    That a declaration signed by the agent shall be annexed to the bill, stating that it is the same in every respect as the bill presented in this House in the present session;
    That on the next sitting day following presentation, the Clerk in the Private Bill Office shall lay the bill on the Table of the House;
    That in the next session the bill shall be deemed to have, passed through every stage through which it has passed in the present session, and shall be recorded in the Journal of the House as having passed those stages;
    That no further fees shall be charged to such stages;
    That all petitions relating to the bill which stand referred to the committee on the bill, shall stand referred to the committee on the bill in the next session;
    That no petitioners shall be heard before the committee unless their petition has been presented within the time provided for petitioning or has been deposited pursuant to Private Business Standing Order 126(b);
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    That, in relation to the bill, Private Business Standing Order 127 shall have effect as if the words "under Standing Order 126 (Reference to committee of petitions against bill)" were omitted.—[The Second Deputy Chairman of Ways and Means.]
    Message to the Lords to acquaint them therewith.

Oral Answers to Questions
  CULTURE, MEDIA AND SPORT
  The Secretary of State was asked—
  CULTURE, MEDIA AND SPORT

    Theatres (Market Towns)
    Mr. David Heath: What proposals he has to support theatre venues in market towns. [135336]
    The Minister for the Arts (Mr. Alan Howarth): This is a matter for the Arts Council of England—as the main funding body for the arts in England—in collaboration with the regional arts boards, to decide within the context of its current review of regional theatre. The Arts Council has already announced additional theatre funding from 2002–03 and decisions on how this will be distributed will be made in the near future.
    Mr. Heath: I am most grateful to the hon. Gentleman for that reply. I am thinking of the Merlin theatre in Frome, which is excellent but which failed, unfortunately, in a recent lottery bid. Does he agree that the lottery process is not necessarily the right way of providing for capital improvements to smaller theatre venues, precisely because it is a lottery? We need a mechanism to ensure

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    that funds are made available not only to the big—the regionally important—venues, but to those that provide an essential service to local people.
    Mr. Howarth: I would counsel the hon. Gentleman and his constituents who are involved with the Merlin theatre and arts centre not to despair of the lottery. I appreciate the disappointment felt by Merlin when it was unsuccessful in the previous lottery application to the Arts Council. I know that the South-West Arts Board tried to give helpful advice, and I understand that Merlin is putting together a new bid to South-West Arts—that organisation now has more resources to distribute under the regional arts lottery project. I wish Merlin well in that application. Of course, from 2002, the Arts Council and the regional arts boards will be able to start to use the extra £25 million revenue funding—the huge increase that my right hon. Friend the Secretary of State has provided for theatre.
    Dr. Phyllis Starkey: Will my hon. Friend consider visiting the new theatre at Milton Keynes? Within a year of opening, it is achieving 85 per cent. occupancy and is a splendid example of the use of public money in extending regional theatre. Will he spread the lessons to be learned from the Milton Keynes theatre to other less successful regional theatre venues?
    Mr. Howarth: It would give me nothing but pleasure to accept my hon. Friend's invitation. I greatly look forward to having the opportunity to visit Milton Keynes. I am sure that the lessons that can be learned from the success of that project will be eagerly followed by others elsewhere, as she suggests.

    Digital Television
    Miss Anne Begg: What action he is taking to promote the take-up of digital television. [135337]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): My right hon. Friend the Secretary of State announced on 31 October that we have been working closely with broadcasters, manufacturers, retailers and consumer groups to ensure that viewers get accurate and sensible information. A set of clear and simple messages has been agreed and will be used to promote and encourage take-up.
    Miss Begg: Does my hon. Friend agree that internet access is an important part of digital television? Hopefully, it offers a mechanism to ensure that there will be a narrowing between the information haves and have-nots. Will she ensure that internet access forms part of the standard digital package on offer to consumers?
    Janet Anderson: My hon. Friend makes an interesting point. She will be aware that the Government are most anxious to ensure universal access to the internet and also to ensure that we do not end up with an information-rich/information-poor society. Currently, we know that one in five homes already have digital television, which,
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    of course, gives them access to the internet. Perhaps most interestingly, 50 per cent. of homes where there are children have digital television.
    However, the Government continue to monitor the situation closely. We have set up a viewers panel, which will meet for the first time at the end of November. We shall certainly take into consideration the point raised by my hon. Friend.
    Mr. Michael Fabricant: The hon. Lady will be aware that the United States has set an analogue switch-off date of 2006, while Italy and Germany have set a clear date of 2010. Does she agree that her conditional date for analogue switch-off will not encourage the growth of digital technology in this country? Furthermore, is she aware that the provision of internet television cannot be a reality until we have broad band throughout the United Kingdom? We certainly do not have that at present.
    Janet Anderson: I hope, Mr. Speaker, that you and the House will bear with me if I set out our proposals for analogue switch-over. The matter is very important to us all.
    As the hon. Gentleman will be aware, we have set out two crucial tests that must be met before the analogue signal is fully switched to digital: availability and affordability. Under the availability test, almost all viewers who can currently receive analogue television must be able to receive the main free-to-air channels digitally. Under the affordability test, consumers must not face unacceptable switching costs when converting to digital services for either their televisions or their video recorders.
    As I said in response to the question from my hon. Friend the Member for Aberdeen, South (Miss Begg), we have set up a viewers panel constantly to review the position. My right hon. Friend the Secretary of State for Culture, Media and Sport set a target date between 2006 and 2010, and we will constantly keep it under review. However, the countries to which the hon. Gentleman referred are having second thoughts about the dates that they have set.
    Mr. Speaker: I call Mr. Rapson,
    Mr. Syd Rapson: My question has already been answered, Mr. Speaker.
    Mr. Peter Ainsworth: That was a very rare piece of honesty.
    Conservative Members will support any sensible measure to enhance the take-off of digital television, but is not the demand for news an important spur to the take-up of digital services? Has the Minister seen the article by John Kampfner, the former BBC political correspondent, in The Guardian today, in which he blows the whistle on the bullying tactics of Government spin doctors? I hope that the Minister will join me in condemning such tactics.
    Does the Minister think that it is part of the Government's remit in the digital age to tell broadcasters how to organise their news schedules? Does giving the green light to a major hike in the BBC licence fee to pay for digital services give Ministers the right to ordain

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    when programmes are transmitted? We know that the Government want to dictate the content of news bulletins. Do they also want to dictate when they are scheduled?
    Mr. Dennis Skinner: I think that the hon. Gentleman has been on uppers again.
    Janet Anderson: My hon. Friend is quite right.
    I never cease to be amazed by the way the hon. Gentleman tries to manoeuvre his current pet subject on to the back of a question that is not really about it. I shall however try to answer his points. The Government do not think that it is part of their remit to dictate what broadcasters should put in their news bulletins. However, it is perfectly reasonable and acceptable for individuals to express their views. As to the future of public service broadcasting, he will have to wait for the White Paper that will be published at the end of the year.

    Sports Coaching
    Dr. Stephen Ladyman: What steps he is taking to give schoolchildren greater access to qualified coaching in the major sports. [135338]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): We announced earlier this year that we would double the funding available for the school sports co-ordinators programme. The additional £60 million that we are providing over the next three years means that the 1,000 co-ordinators whom we will have in place by 2004 will also have funding to buy in coaches and officials. High-quality coaching goes hand in hand with our desire to see more competitive sports played in schools and between schools and to give many more pupils the chance to play sport.
    Dr. Ladyman: I am grateful to my right hon. Friend for that answer. Does he agree that, if we are to harness the talents and sporting enthusiasm of every child, we need more sports co-ordinators and fully qualified coaching staff in our schools as well as new and improved sporting facilities? Will he confirm that the money for the co-ordinators that he has just told us about will not be taken from the additional money announced by my right hon. Friend the Prime Minister for extending school sports facilities?
    Mr. Smith: My hon. Friend is absolutely right about the importance of ensuring that good-quality coaching is available to pupils. One of the great tragedies of school sport in this country is the decline that came about as a result of the dispute that the previous Government had with teachers in the mid-1980s. We are now in the process of putting that right.
    I can indeed confirm to my hon. Friend that the revenue funding that we announced to double the schools sport co-ordinators programme is revenue from the Exchequer. It is not the same fund as the prospective lottery money that my right hon. Friend the Prime Minister announced at the end of September. We will provide £750 million to improve school sport facilities from the new opportunities fund, and we are proud to propose today, in the consultation document that we have launched, that that
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    money should be spent. We asked Conservative Members whether or not they would cut that money if they came into government.
    Mr. Nick Hawkins: Although I welcome the Secretary of State's comments about improving sports coaching in schools, does he not recognise that the biggest decline in school sports came about because, for about 30 years, Labour spokesmen and Labour activists were against all competitive sport in schools? The Government are now trying to go two steps forward when he and his predecessors took us three steps back.
    Mr. Smith: No, I would not agree. The two major reasons for the decline of sport in our schools over the past 20 years are, first, the withdrawal of teachers from after-school sporting activity as a direct result of their dispute with the previous Government, and secondly, the previous Government's presiding over a bargain-basement sell-off of school playing fields.
    Mr. Bill O'Brien: Although the interest given to sports in schools is encouraging and, indeed, welcome, quality coaching in some sports is done away from school—I am thinking of swimming. I have constituents whose children are making a wonderful grade in swimming but need assistance. Can we have some advice on how such people can obtain specialist coaching away from school in sports that are part of the school curriculum?
    Mr. Smith: My hon. Friend raises an important point, which, together with Sport England, we are addressing. Swimming, along with games, gymnastics, dance, athletics and outdoor-adventure activities, is a national curriculum entitlement for school children at key stages 1 to 4. That means that those activities are a statutory part of the education of every child in this country. We must ensure that that education, training and coaching are as good as possible.
    Mr. Jonathan Sayeed: Does the Secretary of State agree that fitter children get better examination results? If he does, does he further agree that it is unacceptable that children aged between 11 and 16 receive on average only 20 minutes' physical activity a week? If he agrees that that is so, as statistics show, will he explain how in an already overcrowded national curriculum more time will be found for children to undertake physical activity?
    Mr. Smith: I certainly agree with the first part of the hon. Gentleman's question. Fitter children who engage in sport undoubtedly perform better in their academic work. That has been proved by study after study. Engaging in sport also makes children healthier and, incidentally, helps to curb anti-social behaviour. That is why my right hon. Friend the Secretary of State for Education and Employment and I are determined to increase the amount of sporting activity available to children, both within the curriculum and after school and at weekends. Both are important objectives. The school sports co-ordinators programme that we are implementing will help to achieve them.

    Football Supporters' Trusts
    Mr. Andrew Love: How many mutual football supporters' trusts have been set up with the help of Supporters Direct. [135339]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): Supporters Direct has assisted in the establishment of seven supporters' trusts to date, and has helped set up a further six trusts that are agreed in principle. Supporters Direct has received inquiries and requests for advice from groups representing supporters at a total of 85 football clubs in the FA premier league, in the football league and in non-league football. It is also in discussion with supporters' groups in other sports. That is not bad for two months' work.
    Mr. Love: I thank my right hon. Friend for that reply. One of the seven trusts that he mentioned is at my local club, Enfield Town, which has also elected a supporter-director to the board. The chairman recently called the trust unrepresentative, which I believe reflects its growing influence. Does my right hon. Friend agree that such a structure should be spread throughout sport? If he does, what measures will he take to publicise it further?
    Mr. Smith: My hon. Friend rightly points to the progress at Enfield. As he points out, not only has a supporters' trust been established but a supporter-director has been elected to the board. Most football clubs at which supporter-directors have been elected and supporters' trusts have been established have warmly welcomed the formal participation of supporters in the running of the club. I certainly hope that football clubs and, indeed, clubs in other sports will recognise that the direct involvement of supporters in the running, decision making and financing of their club is only to the clubs' benefit, because, after all, supporters are the lifeblood of a great football club.
    Mr. John Greenway: We welcome the right hon. Gentleman's news and we wonder whether he has also sought football supporters' views regarding the European Commission's attempt to invade our pitch by ruling that the football transfer system is illegal. Does he agree that supporters' loyalty to their football team applies equally to players, that fans are unhappy when good players leave, and that fans will lose the most if their team is impoverished or ceases to exist because the current system is scrapped? Does he agree with our Football Association, football league and premier league that any new transfer and contracts system must ensure that players honour their obligations, that opportunities to break contract are strictly prescribed, and that smaller clubs are properly compensated for the transfer of talented young players to bigger clubs?
    Mr. Smith: For once, I agree absolutely with everything the hon. Gentleman says. The matter is one that we have discussed with football authorities and supporters, as well as with our fellow European Governments. We believe that, although the current transfer system is by no means perfect, rewarding clubs for the investment that they make in players and ensuring
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    that money cascades down from larger, richer clubs to smaller, less wealthy clubs are important aspects of the system and values that we should try to retain.

    Millennium Dome
    Mr. John Wilkinson: What discussions he has had with local authorities in east London and the Greater London Authority about the future of the millennium dome. [135340]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): The matter is, of course, one for the competition team. Throughout the competition process, the competition team has involved and informed east London and Thames gateway organisations, including local authorities and community groups. Frequent consultation with the London borough of Greenwich has featured throughout the competition process. Following the withdrawal of Dome Europe from the competition process on 11 September, my noble and learned Friend Lord Falconer, sole shareholder of the New Millennium Experience Company, has met representatives of the London borough of Greenwich. The Greater London Authority and the London borough of Greenwich will be fully involved in any future planning application for the dome's future use.
    Mr. Wilkinson: I am grateful for that reply. Will the hon. Lady provide an assurance that, if the dome has to have recourse to yet more public money, not only will there be full consultation with the borough of Greenwich and the Greater London Authority, but Parliament will be fully informed in advance? Will she give a further assurance that, if a wind-up takes place and more public money is needed, she will come to the House and make clear how much is required? Furthermore, will her noble and learned Friend Lord Falconer do the honourable thing and resign?
    Janet Anderson: Before he made his final, cheap, point, which I shall treat in the manner it deserves, I was beginning to think that the hon. Gentleman was approaching the subject in the spirit we expect of all parties. I assure him that we shall continue to keep the House fully informed. The New Millennium Experience Company is satisfied that it has sufficient funding to carry through trading until the end of the year. He will know that we are engaged in discussions with Legacy plc about the future of the dome. I am sure that he does not expect me to predict the outcome of those negotiations; however, I can say that we hope to be able to make an announcement very soon.
    Mr. John Maxton: Does my hon. Friend agree that the Conservatives' constant attempts to make political capital out of the dome ring hollow, given their part in setting it up? Does my hon. Friend also agree that although all alternatives for the future of the dome must be considered, it is essential that the dome remain

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    in existence? We must find an alternative that will ensure that. Does she agree that it has already become almost an icon building, and one that should be maintained?
    Janet Anderson: I could not agree more with my hon. Friend. I remind the House that the right hon. Member for Henley (Mr. Heseltine) who, sadly, is not in his place today, said:
    Our task is to maximise the national gain and recognise that this is a non-party-controversial issue; it is an all-party endeavour.—[Official Report, 28 January 1998; Vol. 305, c. 271.]
    I only wish that Opposition Members would take the same view.
    My hon. Friend is right. I understand that my right hon. Friend the Prime Minister's official spokesman confirmed today that, in his view, the dome is an important part of the regeneration of the Greenwich peninsula. [Interruption.] If Opposition Members will listen for a moment, they may learn something about the regenerative effect of the dome. The Government are the first to acknowledge that the dome has not been the success for which everyone hoped, although it has had more than 5 million visitors. We should not overlook what has been achieved. The dome is a vital contributor to the development of the Greenwich peninsula, and has already brought considerable regenerative benefits to Greenwich and the wider Thames gateway.
    The hon. Member for Ruislip-Northwood (Mr. Wilkinson) asked earlier whether local authorities had been consulted. Greenwich council predicts that 30,000 permanent jobs will be created in the borough of Greenwich within seven years as a result of the investment in the peninsula. Perhaps Opposition Members would rather those jobs had not been created. I am sure that the electors of Greenwich will be listening carefully to them today.
    Mr. Ian Taylor: For once, I shall give the Minister some all-party support. There is no doubt that the original motivation for the dome was the regeneration of that part of the Thames, and I hope that she will continue it. I am glad that Nomura has backed out of its bid, so there are no more beer-swilling concepts of leisure developments there. Will the hon. Lady please make sure that the Legacy bid is taken seriously? It is an opportunity to build a science park there and to help smaller companies. I hope that the negotiations are progressing as well as she suggested, so that an early conclusion can be reached.
    Janet Anderson: I could not agree more with the hon. Gentleman. Although I cannot predict the outcome, the Legacy bid is interesting and exciting. The hon. Gentleman is right that we need an early conclusion. I can confirm that we have been having discussions with Legacy plc, the remaining bidder from the final shortlist of two, and the competition team is currently analysing the proposal from Legacy. I cannot predict what the outcome will be, but I assure the hon. Gentleman that we want an early solution and we will make an announcement shortly.
    Ann Clwyd: Will my hon. Friend congratulate the national botanic garden of Wales, which is also backed by the Millennium Commission, and has just exceeded all expectations by—
    Mr. Speaker: Order. The hon. Lady might try to pick another question, as that does not relate to the one before us.
    Mr. Peter Ainsworth: Will the Minister now treat the question posed by my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) in the manner that it deserves, and answer it? Does she think that Lord Falconer should resign?
    Janet Anderson: Lord Falconer is doing an extremely good job. The short answer to the hon. Gentleman's question is no.
    Mr. Ainsworth: We will see whether that opinion still holds on Thursday, when the National Audit Office report is published. On regeneration in east London, will the Minister confirm reports that the chairman of the New Millennium Experience Company has told Ministers that the site could be worth at least £300 million more if the dome were taken down?
    The Secretary of State is the chairman of the Millennium Commission. He may be sitting there pretending that it is nothing to do with him, but surely he has a duty to salvage whatever is possible from this disastrous year? With growing doubts about the viability of the deal with Legacy, would it not be better—would it not, in the words of my right hon. Friend the Member for Henley (Mr. Heseltine), "maximise the national gain"—to invite bids for the site with or without the dome—or is £300 million a price worth paying for the sake of new Labour's vanity?
    Janet Anderson: I can only say that I am not aware of any such advice from the chairman of the New Millennium Experience Company. I repeat to the hon. Member that we, in common with local authorities in the Greenwich area, consider the building very much part of the area's regeneration. That should be taken into account.

    Regional Television
    Dr. George Turner: What plans he has to address regional anomalies in television reception where viewers cannot receive appropriate regional variations of free-to-air broadcasts. [135342]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): I understand the reason for the question—my hon. Friend has a particular problem in his constituency. It is difficult to know how to resolve it, because the spectrum available for the improvement of terrestrial television services is currently limited. It is difficult to prevent regional anomalies from occurring through analogue and other terrestrial means. My right hon. Friend the Secretary of State and I understand

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    the problem, which is also experienced by my hon. Friend the Member for Wirral, South (Mr. Chapman). If there is any way we can resolve it, we shall try to do so.
    Dr. Turner: I thank my hon. Friend for the interest that she has shown in the matter, and especially for coming to my constituency, where she heard how irritating it is to be interested in the news of Norfolk but to have to watch news that is targeted at Yorkshire.
    Under the previous Government, when digital services, which provide new possibilities for dealing with the problems, were introduced, my constituents were ignored. Will my hon. Friend give me a promise that I can take back to them—that they will not be ignored in the White Paper or subsequent legislation, and that every attempt will be made to ensure that seizing the opportunities of the digital era means that we can put the problem behind us?
    Janet Anderson: My hon. Friend is quite right. I congratulate him on the tireless campaign that he has conducted in his constituency and in the House on behalf of his constituents. He is right to say that digital television uses the spectrum more efficiently and enables the number and range of services to be increased significantly.
    The Government's priority is to deploy the scarce spectrum to enable the BBC and the Independent Television Commission to provide digital television services throughout the United Kingdom and to ensure, as far as possible, reception of the appropriate regional variations. I assure my hon. Friend that we will address the matter in the White Paper when it is published later this year.
    Miss Anne McIntosh: Will the White Paper consider the fact that Yorkshire Television cannot be received everywhere in North Yorkshire?
    Janet Anderson: The hon. Lady cites yet another example. I am not sure of the number of such examples, but there are several around the country. My right hon. Friend the Secretary of State and I appreciate that people in particular areas would like to receive their own ITV regional service, especially regional news. We understand the concern that that causes. If we can do something about it, we shall.

    Public Buildings
    Mr. Phil Hope: What steps he is taking to improve the architectural quality of public buildings. [135343]
    The Minister for the Arts (Mr. Alan Howarth): We have established the Commission for Architecture and the Built Environment—CABE—to promote good architecture and design. We have published a statement of our commitment in a document entitled "Better Public Buildings", copies of which have been placed in the Library. It has been wholeheartedly endorsed by my right hon. Friend the Prime Minister in his foreword to the document.
    Mr. Hope: In a recent debate that the early years network hosted in the House, the motion that
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    public architecture is failing children was carried overwhelmingly. That is a great worry. In Corby, there is an early years excellence centre which is an example of excellent design for children in my constituency. Through sure start and the early years excellence programme, we are spending approximately £350 million on public buildings for children in the next few years. Will my hon. Friend assure me that the excellence that we have seen in Corby will encourage the rapid growth in, and injection of, capital into public architecture, to benefit children throughout the country?
    Mr. Howarth: I agree with my hon. Friend. I am glad that the people of Penn Green in his constituency like the sure start building that has been built there. Large and increasing amounts of capital are spent on public buildings, but for decades, far too many were mediocre—if not downright ugly—in design, depressing for those who visited and worked in them, and unnecessarily expensive to operate and maintain.
    The Government take it as axiomatic that we should design our public buildings well as a statement of civic values and our commitment to best value in every sense. My hon. Friend spoke about the importance of good quality in public buildings to which children have access. Peckham library, which won the Stirling prize at the weekend, is an example of the wonderful public design of a building that children use. I have asked CABE to work with the sure start unit to ensure that the new wave of sure start buildings enhances the quality of the environment, and lifts the spirit as well as providing first rate public services.
    Sir Sydney Chapman: I recognise that the quality of architectural design is a subjective issue, and I say that with some feeling. Does the Minister agree that the lottery funding of many buildings has aroused much greater public interest in the need for quality of design? I say this diplomatically: will the hon. Gentleman put his money where his mouth is and require that when Government Departments become clients they insist on good-quality buildings—even if that means more expensive buildings? Even if they are more expensive, good-quality buildings are a much better financial, as well as environmental, investment.
    Mr. Howarth: The hon. Gentleman has certainly carried the flag for high-quality public architecture for many years, as I well know, and I pay tribute to him for that. From the beginning, the lottery distributors—this has been a commitment shared by Governments of both parties—have been insistent that the buildings funded from that remarkable source of capital funding should be of high quality. The Arts Council and the heritage lottery fund have done excellently in that regard.
    My right hon. Friend the Prime Minister has appointed Ministers in a range of Departments to be champions of high quality and high standards of architecture and design in and for the public sector buildings for which their Departments have responsibility. We are determined to push forward that crusade.
    Mr. Tony Banks: May I inform the Minister that I have a rather commodious office in Portcullis House, which regrettably rather resembles a Novotel? However, the architecture of the atrium of

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    Portcullis House is stunning and wonderful. What will my hon. Friend do to encourage greater public access to that atrium, so that people can enjoy the architecture for which their tax has paid?
    Mr. Howarth: My hon. Friend also has long been committed to high-quality architecture. Of course, he is always a lucky fellow. I am glad that he has a commodious office. Responsibility for the construction project—that is, Portcullis House—has been a matter for the House and not for the Government. All parties have been involved in the oversight of the project. I am sure that the House authorities will wish members of the public to have the best opportunity to see the remarkable piece of architecture by Michael Hopkins and Partners, which is also a remarkable piece of structural engineering. I do not doubt that my hon. Friend, who is always the most assiduous and conscientious of parliamentarians, will be receiving many delegations who will come to wait upon him in his office.

    Millennium Dome
    Dr. Julian Lewis: If he will make a statement on the future of the millennium dome after 31 December. [135344]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): The Government are currently in discussion with Legacy plc, in relation to Legacy's proposal for a high-technology business campus at the Greenwich site. The Legacy proposal is currently being analysed by the competition team in advance of any decision on preferred bidder status. We hope to make an announcement in due course, but I can assure the House that the Government are determined to get the best possible deal to continue the regeneration of east London.
    Dr. Lewis: One thing that the dome and its contents will not be doing next year is fulfilling the Prime Minister's boast that they would form the first paragraph of his general election manifesto. Is the Minister aware that last week the national health service pulled the plug on four community hospitals, including a long-awaited £22 million community hospital serving New Forest? How many more future consequences will there be for the people of this country as a result of the squandering of three quarters of a billion pounds on the millennium dome and its contents?
    Janet Anderson: I do not know how the hon. Gentleman has the brass neck to ask that question. What the Government have done through the new opportunities fund has been popular. I refer him to a comment made by an Opposition Front-Bench spokesman, the hon. Member for East Surrey (Mr. Ainsworth), who said that health and education are things on which lottery money should not be spent? Perhaps the Conservative party would like to tell us what it would cut, in addition to £16 billion-worth of cuts in public spending. Would the Conservatives cut sport in schools? Would they cut the green spaces initiative? Would they axe the additional equipment for cancer patients, the after-school clubs and the healthy living centres? People outside the House will want those questions answered.

    Primary Schools (Sport and Art Grants)
    Dr. Nick Palmer: When he expects the first grants will be made to primary schools under the space for sport and arts scheme. [135345]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): There is a two-stage application process for the space for sport and arts scheme. In the first, which is already under way, local education authorities have received the prospectus and will return outline proposal forms by the end of the year. In the second, which will run from the end of January onwards, LEAs will be invited to work up projects which have been given in-principle approval and to submit detailed applications. We hope that the first grants will be made during the summer of next year.
    Dr. Palmer: I thank my right hon. Friend for his comments. Will my right hon. Friend confirm that schools will not have to match the funding? We should focus on the most needy schools, but they are precisely the schools with the most claims on their resources. If we want the programme to be effective, it needs to carried out without the requirement for match funding.
    Mr. Smith: I can confirm that. The principal element of funding for the space for sport and arts for schools scheme comes directly from the Exchequer as part of the capital modernisation fund. Lottery money is being provided in addition. The running costs, once the projects are up and running, will be met by the Department for Education and Employment through the normal funding arrangements.
    Mr. Graham Brady: Given that sports facilities in schools are increasingly coming under pressure, and that the time for sport in the school curriculums is already under pressure, will the Secretary of State take into account the fact that it is very important for local sporting clubs to augment the sporting facilities that are available to schoolchildren? In that context, will he consider visiting the Bowdon hockey, cricket and squash club in my constituency? By working closely with local schools, it allows schoolchildren to benefit from professional coaching and to take advantage of other opportunities that they should have but which will be affected by the proposal of the Labour-controlled local authority of Trafford to allow house building on one of its most heavily used playing fields. Perhaps the right hon. Gentleman could take the opportunity of a visit to say whether he shares my view, which I hope he does, that that would be an act of vandalism which should be stopped by the Government.
    Mr. Smith: The activities of individual sports clubs are a matter primarily for the clubs themselves and for sports governing bodies. We will shortly announce additional funding for the national governing bodies for sport to assist them with their work. However, in relation to school sport, we have taken measures drastically to reduce the number of school playing fields that are being sold off. We have also taken measures through the new opportunities fund, and through the green spaces initiative, to create playing fields and recreation space. There is also a proposal to spend £750 million on school

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    sports facilities—also through the new opportunities fund. That combination of measures will help to put right the damage done by the Tories when they were in government. Once again, we have not had a clear answer from the Tories. Will they cut the new opportunities fund projects or not? Those are the projects that will put sports facilities back into schools, to the benefit of our children.

    Millennium Dome
    Mr. David Tredinnick: How much (a) national lottery and (b) Treasury money has been spent on the millennium dome. [135346]
    The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): The New Millennium Experience Company has been awarded total grant of £628 million from the Millennium Commission for the millennium experience at Greenwich and its associated national programme of events and activities. No Exchequer funds have been spent on the dome.
    Mr. Tredinnick: Is the right hon. Gentleman not ashamed that so much public sector money has been used to shore up that project? Is that not in stark contrast to private sector projects such as Alton Towers, Flamingo Land and CenterParcs, which have managed to make a profit and entertain people for far less money? Is it not astonishing that, after all this time, there is still no proper funfair at the dome to entertain children? Can the right hon. Gentleman give an assurance that, if the dome is knocked down at the end of the year, the ball and chain will be on the front page of the next Labour party general election manifesto?
    Mr. Smith: The hon. Gentleman ignores the fact that so far 5.2 million people have visited the Dome, of whom 4.15 million have been revenue-paying visitors. In the whole of last year 2.65 million people visited Alton Towers, the other most-visited "paying" attraction. The dome has already had nearly twice as many visitors as Alton Towers. Moreover, the latest surveys show that satisfaction rates among visitors to the dome are rising: enjoyment and satisfaction levels are now at 88 per cent.
    Ann Clwyd: As my right hon. Friend knows, attractions in other parts of the country are also funded by the Millennium Commission, and have proved extremely successful. The national botanic garden of Wales, for instance, has exceeded all expectations by attracting as many visitors in its first six months as it expected to attract in the first year. Will my right hon. Friend kindly offer his congratulations?
    Mr. Smith: I am happy to congratulate all those involved with the national botanic garden of Wales, which, with my right hon. Friend the Secretary of State for Wales, I visited shortly before it opened. It is a splendid building—a very fine dome, created by Lord Foster—and it has indeed attracted far more visitors than the number originally envisaged in the business plan. The same applies to a number of other projects funded by the Millennium Commission, from the Eden project in
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    Cornwall to Dynamic Earth in Edinburgh. Those projects are proving remarkably successful and, indeed, profitable for the organisations concerned.
    Mr. Geoffrey Clifton-Brown: Can the Secretary of State confirm what was said earlier by the Minister for Tourism, Film and Broadcasting—that he has not been told by David James, chairman of the New Millennium Experience Company, that if the dome were demolished, the Government would receive an extra £300 million? If he can give such confirmation, will he take urgent advice, and if he finds that that is true, will he consider allowing the dome to be demolished—or must it remain as a testament to new Labour's failure?
    Mr. Smith: As my hon. Friend the Minister said, we have received no such advice.

    Tourism
    Mr. David Atkinson: If he will make a statement on recent trends in the tourism figures for Great Britain. [135347]
    The Minister for Tourism, Film and Broadcasting (Janet Anderson): The numbers of North American and other long-haul visitors to the United Kingdom have increased by 1 per cent. and 4 per cent. respectively in the first eight months of this year compared to the corresponding period of 1999, although visits from Europe are—rather disappointingly—down by 5 per cent., and overall visits by 3 per cent.
    Overall spend by overseas visitors is, however, up by 1 per cent. to £8.5 billion in the first eight months of this year compared to the. equivalent period of 1999, and remains on course to be one of the highest levels on record.
    Mr. Atkinson: Will the Minister confirm that last year the number of foreign visitors fell for the first time for nine years? Is she aware that the British Tourist Authority predicts a further decline this year? Does she agree that the British tourist industry needs all the help it can get, in the light of ever-increasing global competition? If so, what representations has she made to her right hon. Friend the Chancellor of the Exchequer about the fact that the cost of petrol at the pumps in Britain is now the highest in the European Union, whereas three and a half years ago, under the last Conservative Government, it was the lowest?
    Janet Anderson: That, dare I say it, is a bit rich, coming from a member of the party that cut funding for the English tourist board from about £25 million to under £10 million—its level when we came to office.
    We are doing our best to reverse the declining trend in overseas visitor numbers, but we must remember that this is now a global market, and we are competing with other countries throughout the world. What will encourage people to come here is a value-for-money, good-quality product. That is why, in conjunction with the industry, we produced the first-ever Government strategy for tourism, and established the first-ever ministerial summit.

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    I congratulate the tourist information centre in the hon. Gentleman's constituency, which deservedly won an England For Excellence award last week.
    Mr. Robert Maclennan: Is the Minister not being a little complacent in failing to recognise that in the last complete year there was a deficit in tourism of £8.3 billion and that the number of British visitors who went abroad was substantially higher than the number of foreign visitors coming to this country? Is it not time that the Minister recognised that among the factors contributing to that, apart from the high level of the pound, is the extremely high level of road fuel costs compared with that in other countries? Will the Minister draw to the attention of the Chancellor of the Exchequer the anecdotal evidence, which is supported by statistical evidence, that prices at the pumps of over 90p per litre, which are common in the highlands of Scotland, are deterring visitors, whose number has been cut by at least a third this year?
    Janet Anderson: I am afraid that I cannot agree with the right hon. Gentleman. His point about Scotland does not fall within my remit, but he may like to refer to the figures that were published some months ago, when people in Scotland expressed concern. One of the reasons identified for that was the failure of the industry in Scotland to get to grips with the opportunities presented by information technology. I hope that it will now do that.
    We have provided the British Tourist Authority with an extra £5 million in grant in aid for the three years from 1999–2000 to promote Britain overseas. With the Foreign and Commonwealth Office, we have set up a Britain abroad taskforce to see what we can do to improve Britain's image abroad, and we shall continue with that. All that is in stark contrast to the record of the Opposition, who consistently fail to take tourism seriously, although it contributes £64 billion a year to our economy.

    The hon. Member for Middlesbrough, representing the Church Commissioners, was asked—

    Mobile Phone Masts
    Mr. Michael Fabricant: If the Commissioners will make recommendations to parochial church councils regarding the financing of mobile phone masts on Church property. [135365]
    Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): Welcome to your first Church Commissioners' Question Time, Mr. Speaker. It is a non-partisan Question Time, we are protected from on high, and you will enjoy it as much as we do.
    The commissioners who, as the honourable Gentleman knows, are substantial property owners in their own right, are liaising on this matter with the Archbishops Council which, I am happy to say, is taking a lead on the matter.
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    The council is working on producing national-level guidance and advice on best practice which they believe will be of benefit to the parochial church councils.
    Mr. Fabricant: Is the hon. Gentleman aware that the sight of mobile phone masts in rural areas, let alone in towns, is pretty abhorrent to most people? Is he also aware that a mobile phone antenna can be inserted into the top of a steeple internally so that it is not seen from the outside and can generate over £5,000 for the church concerned? When will the hon. Gentleman make recommendations to churches that their steeples be used for mobile phone masts, to hide them from the general public and generate money for the Church, thus scoring a double whammy?
    Mr. Bell: The Church will be grateful for that double whammy, which will allow it to render a public service to mobile phone operators, which need to cover 80 per cent. of the country, and perhaps also to gain revenue from that. The hon. Gentleman made the point even better than I can. The Church has taken a lead on the matter through the Archbishops Council and we are hopeful of positive results for parish churches throughout the land.
    Mr. Speaker: I call Dr. Tonge.
    Dr. Jenny Tonge: Thank you, Mr. Deputy Speaker—[HON. MEMBERS: "Speaker!"] I am sorry, Mr. Speaker.
    Will the hon. Gentleman tell us if he has any information on when the Department of the Environment, Transport and the Regions will publish the guidelines on mobile phone masts which were promised for the end of July this year?
    Mr. Bell: I am always grateful to have questions to the Secretary of State for Environment, Transport and the Regions pushed on to me, and am happy to answer the hon. Lady. Eighty-seven per cent. of our country should be covered by mobile phone operators by October next year. The Church will play its part in assisting those schemes and I hope that it will do so in the interests of our people, our parishes and our churches.

    Church Repairs (VAT)
    Miss Anne McIntosh: What recent representations the commissioners have received on the reduction of VAT on church repairs. [135366]
    Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): The Church continues to make representations on that issue to the Government at the highest level. A survey will shortly be published giving up-to-date figures for the total VAT burden borne by the Church, particularly in relation to the on-going repair bills payable for the maintenance of churches
    Miss McIntosh: Is the hon. Gentleman aware that the figure that has been put on the cost is £40 million per annum, which is £40 million more than the churches receive in grants from the Government? Is he aware that, today, The Daily Telegraph gave what could be the contents of the Budget statement? Is there any truth in the

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    story that churches will receive a reduced rate of VAT? Will the hon. Gentleman continue to support my campaign to have a lower VAT rate?
    Mr. Bell: I had thought it was my campaign, but I am happy to have the hon. Lady as a joint campaigner on this issue. I have read today's newspapers and what might or might not be in the pre-Budget report of the Chancellor of the Exchequer on Wednesday. I will hold my breath on that—it is somewhat bated—as will the House. I take the opportunity to thank the hon. Lady and all right hon. and hon. Members who have supported the campaign over many years.
    Mrs. Gwyneth Dunwoody: My hon. Friend is very persuasive and I am sure that he will have another go at the Chancellor, as we are getting to the point where small communities are expected to carry very large debts in relation to their churches. I hope that he will be able to get a response from the Government. They must be sympathetic, particularly to rural areas, which are faced with frightening debts.
    Mr. Bell: I am grateful for my hon. Friend's support. As I said, I have read the newspaper reports. The campaign has been a long one. The imposition of VAT at 17.5 per cent. on church repairs absorbs a large amount of locally raised resources—and for no local benefit. A great injustice will be righted if the Chancellor makes the statement on Wednesday that we hope he will.
    Sir Patrick Cormack: Does the hon. Gentleman accept that some of us have been campaigning for a reduction for nearly 30 years, and Minister after Minister has given us a dusty answer? Will he try to persuade the Chancellor that he would earn well-deserved brownie points if he made the announcement that has been forecast this morning? It is a monstrous scandal that churches are paying back in VAT more than they receive in grant, as my hon. Friend the Member for Vale of York (Miss McIntosh) said.
    Mr. Bell: The hon. Gentleman has been campaigning on this issue since 1972. He and I have attended Ministers of the Crown as part of delegations. I am grateful for his support. I have said that Church Commissioners questions is a non-partisan occasion, I would add that, if the Chancellor listens to us, and I think he will, he will be the first Chancellor to have done so in 30 years.
    Mr. Peter L. Pike: Is it not important that the Treasury recognise that such a move would win widespread support; that churches throughout the country perform not only a religious role, but, increasingly,
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    a community role; and that, in many parts of the country, they are an important part of the tourist industry? It is important that we get the concession—I hope, this week.
    Mr. Bell: I am grateful to my hon. Friend for his continuing support for the campaign. He makes several valid points. One is that the churches play an important role in communities in rural areas. Church repairs are to uphold and to maintain our traditions and heritage in local churches, which are a tourist attraction. I hope that those arguments alone will be sufficiently persuasive for the Chancellor on Wednesday.

    Clergy Pensions
    Mr. John Bercow: What assessment he has made of the adequacy of clergy pensions. [135367]
    Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): The formula for determining the full basic rate of clergy pension is two thirds of the previous year's national minimum stipend for incumbents. In addition, a lump sum of three times the pension is payable on retirement. As housing is provided while clergy are working, the formula recognises that clergy in retirement need to meet the cost of housing.
    Mr. Bercow: I am grateful to the hon. Gentleman for that considered reply. Given that since 1998 pensions on service have been funded by parishes themselves and that large numbers of parishes have been forced against their will to lose the services of sound and able-bodied clergymen for no other or better reason than that they have reached the age of 70, does the hon. Gentleman not agree that it would make financial sense and strike a blow against the evil of ageism if clergymen were able to continue beyond the age of 70—or, indeed, for as long as their parishioners wanted them?
    Mr. Bell: I certainly appreciate the hon. Gentleman's point about ageism. All the points that the hon. Gentleman has made will be taken into account by the Archbishops Council—which has started a review of clergy stipends and is consulting widely within the Church as a part of that process. I shall ensure that the hon. Gentleman's remarks are incorporated in that review.
    Dr. Brian Iddon: In improving the clergy's conditions of service, will my hon. Friend consider allowing them to go to an industrial tribunal if they are unfairly dismissed?
    Mr. Bell: Yes. For the past three years, since my hon. Friend was first elected to the House, that point has been raised on the Floor of the House, and many hon. Members have supported that position. The point is being taken into account by various bodies within the Church, and I am hopeful that, over a longer period, we shall have the result that my hon. Friend would like.

Flooding and Flood Defence
3.30 pm
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley): With permission, Mr. Speaker, I should like to make a statement on the serious flooding that has occurred in England. I start by expressing the Government's heartfelt sympathy to all those who have been affected. Some houses have been flooded several times in the past few weeks. The whole House can only appreciate the desperation of all the householders who have been affected.
We do not need to be reminded of the extraordinarily heavy rains that have fallen in recent weeks—and that are still falling even as I speak. It is an extreme situation: the land is saturated and water is running straight off into already swollen rivers.
Floods on this scale are rare. River levels in York, for example, are the highest that they have been for 400 years. The 1947 flood was the most recent event on a comparable scale. It was caused by a combination of heavy rain and melting snow and resulted in significant economic damage. Direct comparisons, however, are difficult, as there has been much subsequent development on the flood plain and our defences are much better.
Happily, and most importantly, we have no reports of people losing their lives in the floods. Of the approximately 1.8 million properties at risk of flooding, fewer than 4,000 have flooded. Much of the extensive flooding has been of agricultural land. I believe that most flood defences for urban areas—including York, which is being severely tested—have operated to their design standard or better, demonstrating the justification for significant Government expenditure over the years.
As the House will be aware, further rain is to come and the prospect of more flooding cannot be ruled out. I shall return to the issue of funding flood defences in a moment. I have to emphasise, however, that we cannot stop all flooding, but can only reduce its risk. The recent floods have overwhelmed some defences. It would not have been practicable to have stopped them, as that would have required massive walls which, even if they could have been afforded and constructed, would be unlikely to be acceptable visually or environmentally. A few years ago, Shrewsbury turned down a flood defence scheme on those very grounds.
Having set out what has happened, I want to say what is being done in response. First, however, I pay tribute to the way in which the Environment Agency, emergency services, local authorities, voluntary services and the armed forces have responded to the flooding. They have been working around the clock to ensure that warnings are issued and acted upon, to evacuate people and to shore up defences. I also thank the local media, including local radio, for their contribution in ensuring that information has been made widely and quickly available. At the weekend, we saw on television the massive efforts being made to combat the floods in York. Similar efforts are being made across the country.
The Government's impression is that those partnerships have worked well and that flood warning arrangements have also been effective. As the House knows, when the immediate work has been completed, I shall be asking the
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Environment Agency, in conjunction with its partners, to produce a full report on the flooding, its effects, how the flood warning and emergency response worked, and what lessons we can learn. Although I shall ask to have that report speedily, I emphasise that I do not want preparation of the report to get in the way of the immediate work that needs to be done. I ask for understanding on that point.
At the weekend, my right hon. Friend the Deputy Prime Minister made an important Government announcement on flooding. He said that the Government were improving the Bellwin scheme to help local authorities which incur unexpected costs in response to floods. Assistance under the Bellwin formula will now be automatic for authorities dealing with the current floods. The rate of Government support will increase from 85 per cent. to 100 per cent. Valid claims will be settled within 15 working days and claims for advance payments can be made.
That announcement addresses important concerns that have been put to the Government. The scheme will also be reviewed more generally when the current flooding is over. The Government are also committed to discuss with the Association of British Insurers how the insurance industry can respond more quickly and effectively to emergencies such as this one and deal with problems of insurability for homes and businesses at risk of flooding. When the current problems are over, the Government, local authorities and other agencies will do all that we can in pursuing the recovery plan to help communities get back to normal as soon as possible.
On the funding of flood and coastal defence, the total amount of spending on flood and coastal defence in England from all sources approaches £400 million this year. The Government are by far the largest contributor to that expenditure. In the current financial year, the Government planned to spend some £337 million in England. That is a combination of Ministry of Agriculture, Fisheries and Food funding towards capital projects of some £80 million and £257 million delivered through the revenue support grant administered by the Department of the Environment, Transport and the Regions. Revenue support grant funding is used, among other things, to pay levies to the Environment Agency which the agency uses to fund the maintenance and operational costs of flood defences and the balance of capital works not met by MAFF grants.
The announcement in the spending review in July this year foresaw that MAFF funding would be increased by £5 million next year, £10 million the year after and £20 million the year after that. In all, MAFF funding was expected to total £267 million in the next three years.
We would also expect revenue support grant funding to increase by about 4 per cent. a year, in line with the spending review settlement. Recognising the severity of the floods, I am sure that the House will welcome my right hon. Friend the Deputy Prime Minister's announcement of a further £51 million over four years starting this year for additional investment in flood defence works;new whole catchment area assessment studies; and making an earlier start to planned improvements in the flood warning system.
That is new and additional money for England. Further discussions are in hand about the possibility of extra resources for Scotland, Wales and Northern Ireland. The further funding is particularly welcome because it will

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allow us to progress more river-based defence schemes. That is an issue that the Ministry needs to discuss with the Environment Agency, but the Government expect to make an announcement on decisions as soon as possible.
I ask the House to join with me in expressing the Government's appreciation to all those who have been involved in responding to the flooding. I also ask the House to acknowledge the already major investment that the Government make in flood and coastal defence and to welcome the further funding that we are making available to help ensure that the risks are reduced for current and future generations.
Mr. James Paice: I thank the Minister for his statement. I extend the Opposition's sympathy and commiseration to all those who have been so seriously affected by the floods in the past few days and weeks. Many of them, as the Minister has rightly said, have suffered on more than one occasion. None of us can put ourselves in the place of somebody who has seen his home or business totally flooded. I join the Minister in paying tribute to all in the rescue services, who have worked above and beyond any call of duty to help those in distress.
The Minister's statement, although welcome, made no reference to the Bye report which followed the last serious flooding in this country: at Easter 1998, when four people died. As the hon. Gentleman said in this House earlier this year, that report clearly said that work had to be done to stop development on flood plains. Planning policy guidance note 25 has been out for consultation for two years. When will the definitive document be issued, especially as it seems that local authorities are still granting planning consent? In the six months to April this year, the Environment Agency advised local authorities to refuse 190 planning applications because of the risk of flooding, yet in 83 of those cases, the authorities ignored that advice and granted planning consent.
There was speculation over the weekend about maps of flood plains becoming available from, I believe, the Environment Agency. When will that happen? What discussions will the Minister or his colleagues hold with the insurance industry not only on the issues to which he referred but on the whole vexed issue of properties on flood plains becoming uninsurable?
Have not the Government already given permission in the past three years for substantial development on flood plains in Hertfordshire, the Nene valley and Ashford? Will they now reconsider those consents?
I welcome the improvements to the Bellwin system that the Minister has announced. It is obviously valuable to local authorities to get the full 100 per cent. and prompt payment. Will that apply only to expenditure incurred by the authorities themselves, or will they be able to pass on resources to others who may have to take remedial actions to deal with the crisis? That is clearly relevant to what the Minister said about the significant impact on agricultural land.
On flood defences, will the Minister confirm that the £51 million will be allocated over four years, so that the funding, although representing welcome extra resources, amounts to only £13 million a year? Is that additional to the £15 million announced in the comprehensive spending
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review earlier this year? Does he accept that the figure of £400 million is slightly misleading? Is not it the case that this year the Environment Agency is spending only £290 million, and that MAFF is allocated £80 million—we are not sure whether that is on top, or as grant aid for the self-same capital projects. In short, how much will be spent in total, forgetting by whom, and how much of it will be new money?
Does the Minister agree with the report of the Select Committee on the Environment, Transport and Regional Affairs, published two years ago, that said that there was significant confusion among the different bodies responsible for flood prevention and control—the internal drainage boards, local authorities, the Environment Agency and his Ministry? If so, what action will he take to create a much clearer line of responsibility, so that the House can better understand not only who is responsible but where the money is going and who is to spend it on flood defences?
Mr. Morley: First, I welcome the hon. Gentleman's comments concerning those who have been affected and the response of the emergency services.
The hon. Gentleman may remember that the previous statement that I made to the House was on the Bye report and what we were doing in response. We have made great progress in acting on the report by uprating the national flood defence scheme, introducing flood risk awareness programmes and setting high-level targets for annual exercises between local authorities and agencies for dealing with floods.
All that investment and time over the past two years have paid off in the response that we have seen to the current situation, with smooth, professional action by the emergency services, much improved early warning, and everyone living on a flood plain getting a leaflet through the door from the Environment Agency explaining what action to take in response to flood warnings.
PPG25 is expected in December, and we would expect all planning authorities to take into account the advice from the Environment Agency on development on flood plains. In fact, 90 per cent. of applications that are objected to by the agency are turned down.
The publication of flood risk maps was another Bye report recommendation, and the Government have set that as a high-level target for the Environment Agency. All local authorities have flood risk maps for their areas and I understand that the Environment Agency is to make them more widely available.
There will be discussions with the insurance companies about risk with regard to those people who might find it difficult to insure their properties in the future.
The variety of funding sources that go towards flood and coastal defences is being reviewed and a report on that will be out in September 2001. I can confirm that the £51 million announced for the listed schemes is new and additional funding. In terms of the funding proposed, I announced in the statement that the Government are planning to spend £337 million in England—a combination of MAFF funding for capital projects and the funding that is delivered through the standard spending assessment to local authorities for flood defence. I understand the hon. Gentleman's concern about

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funding but, given the Conservative's party proposal for a £16 billion cut in public expenditure, how would it improve matters?
Dr. Jack Cunningham: I welcome my hon. Friend's statement, particularly the improvements to the Bellwin formula and the additional £51 million of funding announced by my right hon. Friend the Deputy Prime Minister. Although we all recognise that the national focus has, understandably, been on the villages, towns and cities that have been inundated, does my hon. Friend accept that if one house is flooded, the misery is the same whether the flooding is localised or widespread? In that connection, and bearing in mind the repeat flooding in areas of my constituency, which, although localised, has nevertheless damaged dozens of houses in Mirehouse, Cleator Moor and Egremont, will my hon. Friend ensure that the changes that he has announced today will be equally and fairly applied to all areas and all families who have suffered, regardless of the extent of the flooding?
Mr. Morley: I assure my right hon. Friend that that is the case. He is right that although there has been much focus on areas in which many houses are at risk, there have been small, localised floods all around the country in which people have been seriously affected. My right hon. Friend the Deputy Prime Minister is ensuring that the Government talk to local authorities about how to make a unified response to ensure sure that people get the support that they need in all parts of the country.
Mr. Don Foster: I thank the Minister for the statement and join him in offering sympathy to those affected and thanks to our excellent emergency services. We also welcome the significant improvements to the Bellwin arrangements.
What plans does the Minister have to provide support to farmers in respect of uninsurable losses that they have suffered during the floods? Is he prepared to discuss with the Inland Revenue arrangements whereby businesses that have been affected by the floods will be allowed to submit their VAT and tax returns later than the official due date?
Finally, I welcome the fact that the Minister is planning to review the quagmire of our flood defence arrangements, but is it possible to bring forward the date on which that report is expected? Does he agree that given so many different bodies are able to act but there is no clarity about which has the duty to act, would it not be better to have a single body with the responsibility, power and funds to get on with the job?
Mr. Morley: First, I thank the Liberal Democrats for co-operating with the Government in providing time for the statement on their Opposition day.
The National Farmers Union has already made representations to MAFF about the problems that farmers are facing, and we will look at some of its suggestions. I also understand the hon. Gentleman's point about businesses whose records will have been destroyed in the floods. I give an undertaking that we will contact the Inland Revenue and ask for understanding on VAT and tax returns, given the circumstances, for the businesses affected.
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As for the review on funding sources and arrangements, I give an undertaking to look at the time scale again, and I will write to the hon. Gentleman about it.
Mr. Christopher Leslie: I represent a constituency that has been adversely affected by much of the flooding on the River Aire in Yorkshire, so I thank my hon. Friend and other Ministers for the serious and thorough way in which they have dealt with the problem as it has developed. Will my hon. Friend give more details about the changes to the Bellwin formula which will increase the speed at which help can be given? Will the Government consider developing plans to help people with the reinsurance of properties if they have difficulties insuring them in future?
Mr. Morley: I know that my hon. Friend represents an area that has been affected. I have visited those areas and the emergency centres in Yorkshire, along with my right hon. Friend the Deputy Prime Minister. I can assure my hon. Friend about the changes to the Bellwin scheme. Applications had to be made because payment under the old system was not automatic, which could lead to delays. That point was put to me when I travelled the country, talking to local authorities and visiting the affected areas. My right hon. Friend the Deputy Prime Minister has acted—payment under the Bellwin scheme is now automatic, the funding is 100 per cent. and there is a prospect of advance payments and a 15-day turnaround for claims.
Mr. David Curry: Does the Minister appreciate that some businesses and households have been told that insurers will cover this disaster, but that their insurance will now cease? Is he aware that, for example, the Yorkshire Dales Icecream Company and the households and other businesses in and around Cononley are in precisely that position even though the flooding there was partly caused by the malfunctioning of a flood reservoir that was built under a previous flood relief scheme? Will he ensure that, while the Environment Agency undertakes its work, which is bound to be spread over a long time, those businesses are protected in the event of further problems between now and those works being accomplished? After all, we are not yet into winter.
Mr. Morley: I accept the right hon. Gentleman's point. Of course, that is one of the matters that we would expect the Environment Agency to look at when it has time to review the situation and the areas that might need attention. He is right about insurance, which is why my right hon. Friend the Deputy Prime Minister has been anxious to take the issue forward in discussions with the insurances companies and to ensure that consideration is given to those homes and businesses that may face insurance difficulties in future. It is fair to say that, at present, there are few people who cannot get insurance in flood risk areas.
Mrs. Ann Cryer: I should like to thank my hon. Friend the Minister for visiting the Stockbridge area of Keighley last Friday and talking to many of my constituents and taking on board many of their anxieties. On Friday, we discussed topping up area social funds. He assured me that he would take that on board because many of my constituents will need to resort to social funds to

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help them out of immediate difficulty. The uninsurability of dwellings has been mentioned. That will be a problem for many of my constituents because many insurers—most of whom have been helpful recently—may not want to take on those households again. Yorkshire Electricity's vans were very much in evidence on Friday, but we did not know that the company was charging households a £65 reconnection fee. I was going to mention that to my hon. Friend privately, but I thought that I would get it in now.
Mr. Morley: I was very moved by the experience of the people I met in my hon. Friend's constituency. Again, the local authority was working hard with all the agencies to provide support. I was impressed that Benefits Agency representatives were present at the rest centre to advise people on the spot. I understand that the Department of Social Security has a central contingency fund. I know that applications are being made from flood hit areas to ensure that there is adequate funding for those people who may qualify for the social fund. I shall take such matters as those raised by my hon. Friend into consideration. I must confess that I was not aware that the utilities were charging people a reconnection charge. I should have thought that the utilities would have taken into account the stress that those people were under at the time.
Mr. Patrick McLoughlin: As the right hon. Member for Copeland (Dr. Cunningham) said, areas where flooding is predictable already receive much attention from the Environment Agency. Other areas, however, which had not had problems with flooding for many years, including Duffield in my constituency, have suffered from severe and sudden problems during the past few days. How will the Minister encourage the Environment Agency to prioritise work in those areas, and what steps will the agency take to protect areas that had not previously had problems with flooding?
Mr. Morley: The Environment Agency will, because of the current situation, prioritise work on river systems. In the evaluation of the floods, the needs of areas that were affected on this occasion but which had not been affected by previous floods will be taken into account. However, some areas were flooded because of blockages in or the backing up of drains, which are also the responsibility of local authorities. All those points will be taken into consideration.
Mr. John Grogan: Will my hon. Friend, who visited the Selby area on Saturday, ensure that the relevant authorities seriously consider a detailed plan from the parish council at Barlby, where 200 homes were flooded over the weekend, to strengthen and repair the flood bank there? He will also receive a report from the Selby area about the failure of the electricity supply during the weekend to more than 10,000 homes. That might have implications for the siting of supply stations and their protection from flooding. As the flood crisis spreads throughout rural Yorkshire, will he ensure that the relevant authorities liaise closely with parish councils, which are often the best sources of local information, community support and volunteers?
Mr. Morley: My hon. Friend will recall that we discussed many of those issues when we met in Selby on
28
Saturday, when we also talked to local authorities. He is right about the situation in Barlby, although it is worth pointing out that many of the houses involved were built in 1995 in a flood risk area. Such considerations need to be taken into account with regard to such developments.
The same point also applies to electricity substations. I understand that the problem in Selby was that the substation was flooded. We need to consider the siting of such stations in flood risk areas and whether they need to be defended. The hard work of the Environment Agency prevented an important substation in Leeds city centre from flooding. If it had flooded—it was very close to being inundated—that would have caused absolute havoc in the city. We will have to take such matters into account when we plan for what might be more frequent extreme weather conditions and the need to protect vital infrastructure, such as substations.
Mr. Phil Willis: I point out to the Minister that it was not just the Ouse but most rivers in Yorkshire that were flooding. The River Nidd overflowed in Knaresborough, and caused extensive flooding from the riverside through to two caravan car parks. Most of the area had to be evacuated. Thanks to the emergency services, the borough council and, in particular, King James school in Knaresborough, evacuees could be accommodated. Does the Minister share my concern about the fact that many people, especially those on Abbey road in Knaresborough, did not receive a flood warning until the flood was 4 ft high in their dwellings? There was no awareness exercise in that area, partly because—the hon. Member for West Derbyshire (Mr. McLoughlin) made this point—it was not an area of traditional flooding. Will the Minister give me an assurance that the way in which the Environment Agency issues awareness warnings will be reviewed? People should receive that information in good time to save at least some of their property and belongings.
Mr. Morley: The hon. Gentleman makes a good point. I have emphasised that no Government can guarantee that floods will not happen. We must reduce the risks and ensure that people have adequate warning. In response to the Northampton disaster and the lessons that we learned from the Bye report, we have put many extra resources into a national flood warning system which, by and large, has worked better. However, that is not to say that there have been no gaps in the system—the hon. Gentleman referred to one. I give him an assurance that in the evaluation that will take place following the floods, we shall examine the area that he mentioned. When we identify failures, we shall take steps to ensure that the situation is improved.
Mr. Richard Burden: My hon. Friend will be aware that parts of the midlands—especially in Worcestershire and Shropshire—have been badly affected during the past week. Although, by comparison, my own area in Birmingham has not been particularly affected this time, people in parts of my constituency have suffered four times during the past two years an event that they had been told would occur only once every 50 years. The latest occasion was in July.
As a result, various local taskforces were set up and some lessons were learned that my hon. Friend might like to take on board. First, there is a desperate need to

29
improve flood defences. Although I welcome the changes to the Bellwin formula, we need to take a fresh look at the operation of cost-benefit analyses, because they often discriminate against areas of localised flooding in favour of big projects.
The second point is on insurance companies. Our experience in Birmingham is that, as a result of those four events, some properties are uninsurable or the premiums are unsustainable. Urgent approaches must be made to the insurance companies in order to stop them cherry picking.
Mr. Morley: My hon. Friend makes a good point about frequency. Generally, flood defences are engineered to certain standards—for example, one flood in 150 years, or 100 years or 200 years. Although there is much that we do not know about global warming, there is certainly no dispute that the planet is warming nor that we are seeing changes in weather patterns. We may have to re-evaluate current standards of defences that are set at one flood in 150 years, perhaps reducing that time because of changing weather patterns. Of course, there are cost implications in that for the Government. We accept those implications; that is one reason why we are significantly increasing the available budget.
We have to apply a cost-benefit analysis, although I am aware that it causes problems in some local schemes. We shall certainly consider those in future.
The Government will hold discussions with insurance companies on all the issues raised by my hon. Friend.
Mr. Laurence Robertson: I thank the Deputy Prime Minister for visiting Tewkesbury last Friday to look at the flood damage. His visit was greatly appreciated. He will recall that I stressed the additional problem experienced in the small village of Sandhurst in my constituency where there was an explosion at a chemical factory—a couple of days before the floods, thankfully. If it had occurred during the flooding, the emergency services would not have been able to reach the area.
Will the Minister carry out a full investigation into that explosion, including the reason why a chemical factory was allowed to be sited on an obvious flood plain? As my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) pointed out, to build houses on or near flood plains causes many problems. One reason why councils do so is the pressure to accommodate the number of houses that they are asked to provide.
Mr. Morley: The hon. Gentleman is right about the risk of pollution during floods. Any company dealing with hazardous products, such as chemicals, must follow certain standards. I understand that the Health and Safety Executive is currently investigating the case to which the hon. Gentleman refers and I am sure that it will be dealt with.
On flood plain development, new guidance will be issued in December and we shall expect planning authorities to act on it.
Mr. David Chidgey: The Minister will agree that there has been much debate about who is responsible for approving new developments on flood plains. However, there is a further question: about approval for the development of new estates, where the
30
increased run-off created by extra hard surfaces inundates adjacent areas. That is a recurrent problem—year on year—in my constituency. Who is responsible for approving such plans? Is it the planning authority, the Environment Agency or the drainage authority? At present, they are all passing the buck.
Mr. Morley: The hon. Gentleman is right. Increased run-off must be taken into account in flood plain development. I understand that PPG25 will address the issue of run-off as part of the guidance to local authorities. That new guidance will not be merely a code of practice as it was in the past; it will have much stronger force to ensure that planning authorities take note of it.
The hon. Gentleman asked about the giving of permission; that is a matter for the planning authorities.
Mr. John Greenway: I too thank the Deputy Prime Minister for visiting Malton on Friday. The Minister went to Malton last year; this year, the floods are worse. The beleaguered community wants to know whether his announcement and his change of policy today mean that flood defence systems, currently at the design stage, will be built more speedily. Is it likely that they will be progressed and constructed as quickly as possible?
Will the Minister ask his recovery plan teams to pay attention to the problems of alternative accommodation? Currently, the homes of about 1,500 families in North Yorkshire are flooded and are likely to remain so for several days. Those families will be out of their homes for nine months or longer. We need desperately to find them accommodation for that period—especially during the run-up to Christmas.
Mr. Morley: The hon. Gentleman is right. I visited Malton and Norton in 1998 and, given the severity of the flood then, I did not expect it to happen again for a very long time. However, as he said, the floods are even worse two years later.
The additional £51 million, which is new money, means that we can progress more schemes. The hon. Gentleman will be aware that a scheme for Malton is at the design stage, but I understand that some technical issues need to be addressed. The scheme will be introduced as quickly as possible, and I assure him that the frequency of flooding that Malton has experienced will have an effect on the way that we score the schemes and on the priority that we give to them.
As the hon. Gentleman said, the problems of alternative accommodation is a serious issue. It will be tackled by local recovery teams and we want to ensure that people will continue to receive help from such teams even when the cameras and the newspapers are no longer present.
Sir Michael Spicer: When the Deputy Prime Minister kindly visited my constituency over the weekend, he gave so many assurances that they prompted my constituents to ask when Upton upon Severn will receive its share of the £51 million or when we will be told that it will do so. More generally, when we will we hear any details of the £51 million and, more particularly, what will its impact be on reducing the risks of flooding?
Mr. Morley: As the hon. Gentleman will appreciate, schemes for flood defence have to go through the

31
processes of design, evaluation and receiving planning permission. They cannot be introduced immediately. Nevertheless, I repeat that the £51 million of new money means that we will be able to introduce a range of additional schemes that we could not have introduced otherwise.
Miss Anne McIntosh: Is the Minister aware that the focus of attention in my area was the prevention of flooding in the down-town part of York itself? The perverse consequence was that the Vale of York was left totally exposed and, in Rawcliffe, the flood defences were breached. No sandbags were provided even though they had been requested from City of York council at 11 o'clock on Friday evening. I visited the area the next day and saw the consequences of the flooding. Sandbags were still not available and pumping was not started until 4 o'clock that afternoon. In fact, social services were nowhere to be seen until today and no soup kitchens had been provided. When I was in the area, I learned that one couple had not been rehoused and had nowhere to go. It is a serious problem, and the people in that area feel neglected and exposed.
The Minister also mentioned the revenue support grant. Will he respond to the request from the Local Government Association, which wants additional safeguards so that within year changes, as there will be this year, in local authority spending on flood defence schemes are recognised in the SSA for future years?
Mr. Morley: The hon. Lady has an Adjournment debate on the subject tomorrow and that will enable us to debate some of the issues in more detail than I can now. Much of her constituency is a flood plain and its flooding has taken a great deal of pressure off urban areas. The flood plains in Leeds, which flooded to take some pressure off other areas, have reduced the water level in Leeds by 1.5 m. Water catchment areas form part of the cycle of defence.
Sandbags have been issued in York, but some of the city's flood defences were operating beyond their designed capacity. Sandbags were needed in the city to stop the water getting under the flood defences and destroying them. Therefore, their distribution was an issue of priority. However, I understand that sandbags have been distributed as widely as they possibly can be.
On the SSA, money at above the rate of inflation is being made available for flood defence in all parts of the country. I am sure that we shall have the opportunity to discuss that in more detail tomorrow.
Mr. John Townend: Stamford Bridge in my constituency has been affected twice in the past two years. I never thought that I would welcome the Deputy Prime Minister tramping around my constituency, but we were grateful that he came. I apologise for not being able to be with him, as I was attending a meeting of the Economic and Development Committee of the Council of Europe.
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I am sure that the Minister will recognise that, having being affected twice in two years, with the prospect of floods again in another two years, the people of Stamford Bridge are saying that something must be done. I accept that the problem is enormous and not easy to solve, but when he is considering new flood defence work once the floods have gone down, will he make it clear to the Environment Agency and English Nature that top priority must be given to the safety and property of householders and businesses, rather than to birds and wildlife?
There will be a problem with insurance. In Stamford Bridge, small businesses have been particularly affected. Will the Minister consult the Deputy Prime Minister on whether businesses and houses which people cannot insure or for which excessive insurance rates must be paid should receive council tax relief?
Mr. Morley: The hon. Gentleman will know that when I visited Malton two years ago, I also went to Stamford Bridge, where, again, I did not expect such flooding in another two years. We will have to take into account changes in weather and more frequent flooding—and we are doing so by providing increased expenditure. His idea about council tax relief for affected businesses is interesting. We are discussing the matter of insurance companies, and we shall be looking at a range of options. The option that he is advocating would of course involve increasing public expenditure—of which he has not always been in favour.
Miss McIntosh: On a point of order, Mr. Speaker. Although it is always a pleasure to see the Deputy Prime Minister and other Ministers in one's constituency, may I seek your guidance? I have written to you on the matter. I was informed that the Deputy Prime Minister was coming to my constituency, and then that he was not. In the end, he came to my constituency accompanied by the Under-Secretary of State for Social Security, the hon. Member for City of York (Mr. Bayley), and a number of national film and local radio station crews, but I was not informed. May I be assured that parliamentary conventions will be respected in future?
The Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott): I met you, you twit.
Mr. Speaker: Order. It is an established parliamentary courtesy that a Member visiting another Member's constituency on official business should give prior notification. That applies to Ministers as it does to other Members. However, the matter should be sorted out between the Members concerned. I suggest that the hon. Lady write to the Deputy Prime Minister and to the Under-Secretary.
Miss McIntosh: Further to that point of order, Mr. Speaker. Is it parliamentary language to call a fellow parliamentarian a twit?
Mr. Prescott: On this occasion, yes.
Mr. Speaker: Order. It is not nice.

Opposition Day
[19TH ALLOTTED DAY]
Opposition Day

  Pensions and Pensioners
  Mr. Speaker: Before I call the hon. Member for Northavon (Mr. Webb) to move the motion, I should announce that I have selected the amendment in the name of the Prime Minister.
  4.13 pm
  Mr. Steve Webb: I beg to move,
  That this House believes that pensioners have been betrayed by both Conservative and Labour Governments over the last twenty years; notes that the Conservatives devalued the basic state pension, slashed future SERPS entitlements and oversaw the scandalous mis-selling of personal pensions; notes that the Labour Manifesto promised that pensioners would 'share fairly in the increasing prosperity of the nation', but that the Government now spends a smaller share of national income on pensioners than when Labour came to power; notes that pensioner poverty rose by 400,000 in the first two years of the present Government and that there were nearly 50,000 excess winter deaths in 1998–99 alone, mainly among pensioners; further notes that this year's 75p pension rise was an insult to pensioners and that despite a multi-million pound take-up campaign half a million pensioners still do not receive the means-tested assistance to which they are entitled; believes that the failure to adopt the recommendations of the Royal Commission on long-term care will still leave tens of thousands of pensioners having to sell their homes to pay for care; is concerned that hundreds of thousands of pensioners have faced delays in receiving their pension because of the Government's failure to deal with the problems of the NIRS2 computer system; and therefore calls upon the Chancellor of the Exchequer to announce a substantial increase in the rate of the basic state pension, with additional increases for the oldest pensioners, and to apologise for failing to deliver a decent pension to all pensioners.
  Today's debate is about pensions, but it is about much more besides. It is about the attitude of successive Governments to older people. The 75p pension rise has been much talked about and is a symptom of that attitude, but it is but one of many examples. The Government's failure to implement the recommendations of their own royal commission on long-term care is another example, to which I hope my hon. Friend the Member for Sutton and Cheam (Mr. Burstow) will be able to draw attention later in the debate. The Government's failure to legislate against age discrimination in the workplace—they went only for a feeble code of conduct—and to stamp out ageism in the national health service are but a few more examples. In failing to treat Britain's older people with true dignity, the Government are following the tradition set by their predecessors. For that reason, our motion refers not only to the current Government but to those in office over "the last twenty years", wherein pensioners have been second-class citizens.
  The Government's attitude to older people was summarised by the Prime Minister telling the Labour party conference that he wanted Britain to be "a young country"—that all the things associated with youth were positive and that, by definition, an older and ageing country, which ours is, was a negative thing about which we should be concerned. That is symptomatic of the current Government's attitude. Later, I shall refer to key documents that the Government are concealing, which would reveal their failure to act in support of
  34
  pensioners and their willingness to keep the pressure off in terms of pensions increases. The Government are sitting on two important documents that should be before the House, but are not. That is a matter of concern.
  Our motion begins with the Conservatives' record. As the House will expect, I am a regular reader of Saga Magazine, and I am sure that the Minister of State is too. The magazine recently conducted a survey asking its readers their views on Conservative proposals on pensions—which I have heard described as robbing Peter to pay Peter, by taking pensioners' awards away with one hand and giving them back, plus a few pence, with the other. Although it might have been presumed that the readers would want more money on the pension, rather than in other forms, they voted substantially against the Conservative proposals. The reason was simple: as many said, "We don't trust the Tories on pensions."
  Pensioners have long memories. They remember the Conservatives' record on pensions and they are not willing to trust the party again. That record is one of not believing in the state pension, of eroding the basic state pension during their 18 years in office, of attacking SERPS—the state earnings-related pension scheme—and of slashing entitlements. In addition, as the House knows, women whose husbands were concerned about making provision for them when they became widows are now reaping the harvest of changes that were sown by the Conservatives in the mid-1980s. Pensioners, rightly, do not trust the Conservatives on pensions.
  What do the Conservatives offer pensioners for the future? They face a dilemma: they have to go into the next election pledged to cut taxes, but they still need something to say to pensioners. The entirety of the policy that they have announced is twofold. First, they pledge to take money that pensioners already receive and then to give it back to them; added to that will be some money taken from lone parents who are trying to find work and some taken from the poorest of the poor through the social fund, to a grand total of 42p. At the next election, the electorate will be faced with a choice between a party that gave them '75p and one that promises them 42p—what a choice.
  In my customary fashion, I am being generous to the Conservatives by citing a figure of 42p. The Conservatives said that their pension increase next April would be £5.50–£2 for inflation and £3.08 for the gimmicks, leaving 42p. However, we now know that £2.25 will be needed to cover inflation. Although the hon. Member for Beckenham (Mrs. Lait) might provide one in her speech, we have not yet heard a revised figure for the increase. If it is still to be £5.50, with inflation taking £2.25 rather than £2, that leaves only 17p. Perhaps I have been too generous.
  Secondly, those calculations are based on an equation that does not include tax, which leads me to one of the features of the Conservative proposals to which the readers of Saga Magazine objected most. The £150 winter fuel payment is tax free, as is the reduced television licence, worth more than £100. Once those pensioner benefits are subject to tax, many pensioners will be worse off overall. That is the best the Conservatives offer for the state pension in year 1; in years 2, 3, 4 and 5, they offer nothing. They would return to the old ways of nothing more than price indexation—nothing more than 75p and its equivalent.

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  As for the Conservatives' long-term plan, they have always wanted to privatise everything that moves—and, in the case of the railways, plenty of things that do not move—and pensions are no exception. They tried to go for the full Monty—to phase out the basic state pension. Before the previous general election, they cobbled together a policy that was roundly rejected, so now they are going to try to do it very slowly.
  The Conservative party intends to start with the young, by telling them that they can opt out of national insurance and save for a private pension in future. However, there is a slight cash flow problem. If people in their 20s start paying less national insurance in return for the state saving some national insurance in 40 years, there will be a bit of a gap between the loss of revenue now and the saved expenditure in 40 years. Where will the money come from? That is another black hole in the Conservative spending plans.
  Perhaps it is unnecessary to dwell too long on the Conservative record. The House is familiar with it; more important, pensioners are familiar with it. I have one thing to say about Conservative proposals for the future. I have seen examples from around the country of Conservative literature relating to the party's proposals for pensioners, and the figure of £5.50 features prominently. I am reminded of the situation that arises when one writes an article for a newspaper, and the sub-editors remove the final paragraph because there is insufficient space. In this instance, it is the paragraph which discloses where the £5.50 will come from. Mysteriously, those who read the first line will see that £5.50 is to go on the pension, but they may never read the line that states that £5.08 is to come off. I believe that that is dishonest, and I hope that the hon. Member for Beckenham will dissociate herself from any local Conservative association that is putting out such literature.
  Mr. John Bercow: I am grateful to the hon. Gentleman for giving way. He observed a few moments ago that the Conservative party is not trusted by pensioners on the subject of pensions. How, therefore, does he explain the fact that even at the 1997 general election, 44 per cent. of pensioners voted Conservative, only 34 per cent. voted Labour, and we cannot quite remember how poorly the Liberals did?
  Mr. Webb: The hon. Gentleman underestimates pensioners by assuming that all they do is make a simple calculation of what their pensions will be. Pensioners look at a range of policies, not just pensions. Does the hon. Gentleman want to dispute the verdict of Saga Magazine readers on the Conservative pensions policy, which they rejected by an overwhelming majority when specifically asked about it a month or so ago?
  The Conservative record is well known. We might have expected better from Labour. Many pensioners voted Labour in the hope of something better. In their manifesto, the Government set themselves the goal that pensioners would share fairly in the rising prosperity of the nation. How is that to be measured? Clearly, by the share of national income going from the Government to pensioners. One would not measure it narrowly,
  36
  by looking just at pensions. One would look at the range of things given by Government to pensioners. I did that, in the form of a written question.
  Mr. Gerald Kaufman: The hon. Gentleman referred to an election manifesto. The Liberal Democrat election manifesto at the last election stated:
  The basic state pension will remain indexed to prices.
  That means that this year the Liberal Democrats would have increased the basic retirement pension by 75p. That is what the hon. Gentleman admitted to me in the debate on 8 June. It is sheer hypocrisy to describe as an insult what the Liberal Democrats themselves would have done.
  Mr. Webb: I am well aware that the right hon. Gentleman is rattled by the local success of the Liberal Democrats and is nervous about the subject of the debate. Earlier this year, I moved a motion in the House condemning the 75p pension rise as inadequate. Perhaps the right hon. Gentleman was elsewhere. My right hon. and hon. Friends and I supported the motion. The right hon. Gentleman and his party voted that the pension rise was adequate, and the Conservative party abstained. That is what happened this year.
  The Labour promise was that pensioners would share fairly in the rise in national prosperity, so the least one would expect is that pensioners' share of national income from the Government would rise. For goodness' sake, doing better than the Tories is not much to ask, but they have not done so. Under this Government, the share of national income going to pensioners is lower than in the final year of the Conservative Government. No Labour-supporting pensioner who voted for this Government can have expected that to be the outcome.
  There is plenty more evidence of the disappointment caused by the Government on pensions. The Government's own figures show that the number of pensioners living in poverty rose by 400,000 in the first two years of the Labour Government. The Government will say, "Since then, we have done A, B and C." Is it acceptable for two years to go by, with hundreds of thousands more pensioners living in poverty, before the Government get around to doing something as an election approaches?
  Last December, we highlighted the figure for excess winter deaths—the number of deaths that exceed the expected figure. Those numbers are not large in much colder climates, but they reach extraordinary levels in this country. We have been trying to get the figures for last winter, but we are not being told them. My noble Friend Lord Russell asked for that information almost six weeks ago after one of our researchers phoned the Office for National Statistics and was told that the figures were ready but that we had to ask a parliamentary question to get them.
  I tabled a question to the Treasury a couple of weeks ago and was given a named-day answer. I was told that we would get the figures soon. We phoned today and were told that they were still being "worked on". The Government want to get the figures off the political agenda. They want to announce a big pension increase before they receive the flak. They are sitting on the information, which should be before the House now.
  As the hon. Member for Newport, West (Mr. Flynn) knows, that is not the only information on which the Government are sitting. I am sure that the hon. Gentleman

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  will try to make that point during the debate. The Government Actuary's Department has been asked to produce a report on the funds available to the Government, the cost of higher pensions and the state of the national insurance fund. The Government Actuary wrote to the Southwark pensioners action group and said that his report was more or less ready at the end of September and would be finalised in the next few days and sent to the Government. I am grateful to the group for letting me know his comments. I have it on good authority that the report was sent to the Government. However, in a written answer today, the Minister said that it was being finalised. We bet it is being finalised!
  One imagines that the figure for the national insurance fund balance was so huge that the Government had to get some different figures. That is the problem. There is key evidence for the Government's overflowing finances and the Government's record on pensions, but the Government are sitting on it—so much for freedom of information.
  Mr. John Butterfill: Does the hon. Gentleman seriously suggest that the Government would try to manipulate the report of the Government Actuary's Department?
  Mr. Webb: Yes. [Interruption.] I make no bones about it; yes is the answer to the question. I believe that the Government were sent a report, which did not provide the answers that they wanted. I hope that the Minister will explain the delay in making known the contents, given that he has had the report for approximately a month. What extra questions has he asked the Government Actuary? What was the bottom line? Perhaps the Minister will tell us now; he has seen the report. The Government Actuary knew the figures at the end of September; I hope that the Minister will give us the figures.
  Mr. Paul Flynn: A little more than an hour ago, a journalist told me that the Department received the report on 6 October—the date it was expected—and that it would be published next Thursday. That is significant. That was the reason for a long point of order that you allowed me to make last week, Mr. Speaker. It is worrying that information crucial to deciding whether restoring the link is affordable has been kept from the House for a month.
  Mr. Webb: I pay tribute to the hon. Gentleman for his dogged pursuit of the matter. I have written to the Minister about it, and, so far as I know, I have not received a reply.
  Mr. Simon Hughes: Does my hon. Friend know that he is describing common Government practice? My right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) and others have made the point that Governments publish independent reports only with their spin on them, rather than letting the public read and judge the reports, and responding to them alone. The freedom of information measure has not yet been amended at the other end of the building to deal with that because the Government continue to refuse to allow facts that are given to them to be free from Government constraint, and to insist that they should not be generally available.
  Mr. Webb: My hon. Friend makes an important point. Freedom of information is sometimes viewed as an
  38
  esoteric issue that is only for the cognoscenti, yet it clearly has practical consequences in the case of BSE, rail and pensions.
  A couple of administrative issues that relate to the way in which the Government have run pensions remain a shambles and are symptomatic of the lack of priority that is given to the needs of pensioners. The first is the infamous NIRS2 computer system. In the fourth year of the Parliament, the Government are still incapable of paying pensioners the right pension on the day that they are entitled to it. The hon. Member for Buckingham (Mr. Bercow) has pursued the issue in the House.
  I tabled a question to the Treasury—I know that that is usually a triumph of hope over experience. I asked what progress there had been on the NIRS2 system. The Paymaster General replied:
  Following the well-documented problems … considerable progress has … been made and the Inland Revenue now regards the system as stable.—[Official Report, 31 October 2000; Vol. 355, c. 409W.]
  There was an answer to the hon. Member for Havant (Mr. Willetts), a Conservative spokesman, on 2 November. He asked
  how many pensioners are not receiving
  their pensions on time. The reply was as follows:
  As at 15 September 2000, Benefit Agency offices had 97,000 pension awards waiting to be reviewed.—[Official Report, 2 November 2000; Vol. 355, c. 573W.]
  If that is stable, is it being suggested that that is the way we can expect things to be indefinitely?
  I raised the issue of delays in state pension payments in an Adjournment debate in July 1999. I was assured that the problem would be sorted out by Christmas. Which Christmas? When will the problem be sorted out? How long will pensioners have to wait?
  It is not only the computer system that the Government seem unable to run. I mentioned earlier the position of widows' state earnings-related pension schemes.
  Mr. Butterfill: Before the hon. Gentleman leaves the computer system, is he aware that each of the seven different types of benefit that are payable by the Benefits Agency has its own separate computer system, none of which is capable of interfacing with the other systems? Even if the Government get NIRS2 right, they cannot get the benefit right.
  Mr. Webb: The hon. Gentleman is right. There are fundamental issues that have gone unaddressed by consecutive Governments. I shall give some evidence of the scale of the problem. The Financial Times reports that
  there are 7m cases on the computer system with data missing today, compared with 2.5m in 1998.
  The situation is getting worse, not better, and the Government have failed to address it.
  I understand that Age Concern is taking the Government to the European courts on the issue of widows' SERPS. The Government have said that men—it is typically men—who inquired about SERPS rules in the early 1990s and were given duff information can claim protected pension rights, on condition that they can show that they
  would or might have acted differently if they had received the correct information.—[Official Report, 26 October 2000; Vol. 355, c. 166W.]

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  I have discussed the matter with some of the folk who have been through the personal pension mis-selling follow-up. Each case is painstakingly examined and the process is taking a long time to complete. However, the work is being done thoroughly. How can anyone prove that seven or eight years ago he saw a duff leaflet—[Interruption.] I think that the Minister said from a sedentary position, "He does not have to prove." The individual will have to say that he received a duff leaflet and show that he
  would have or might have acted differently.
  That person would have to produce the scheme of which he was a member at the time, the alternative schemes that were available and the situation and provision of the spouse. How will that be done? I believe that the Government are giving a misleading impression to the many men in this position—there are some women—who have been told that they will be protected. They will find out in a few years' time, when we know how the scheme will work, that they will not be protected. What they will have to prove will be impossible to prove. I hope that the Minister will clarify what exactly these men will have to provide.
  I shall set out the Liberal Democrat approach to the issue. First, I shall reflect briefly on the Government's strategy for pensioners. Almost certainly, "strategy" is completely the wrong word. It is a dog's breakfast. The Government have been making it up as they have gone along, and there is still a lack of coherence. A few months after the general election, there was a massive increase in the level of the means test, and a renaming, which is essential. It is the minimum income guarantee.
  We know that about 500,000 pensioners—
  Mr. Bill Rammell: Will the hon. Gentleman give way?
  Mr. Webb: No, I would like to make some progress. I will give way later.
  About 500,000 pensioners are not claiming the money to which they are entitled. When the Government said that they are prioritising the poorest pensioners, they have it wrong. The poorest pensioners are not those who claim their entitlement. There are about 500,000 with an entitlement who are living below the poverty line but do not claim.
  To be fair, the Government have ridden into battle. Thora Hird was brought forward to tackle the issue. The most recent figure that we have been given in a written answer—perhaps the Minister can update us—is that 30,000 of the 500,000 have now claimed their benefit. After the millions of pounds spent on publicity and on sending nearly 2 million letters to pensioners—at least three quarters of them did not have an entitlement—they have managed to increase by 30,000 the numbers of those who claim. Therefore, 470,000 pensioners are still going without. Aiming for a target of 500,000 and hitting 30,000 is a pretty poor performance. Is the Minister satisfied with that?
  40
  Reliance on the means test—which, of course, the Chancellor will increase massively on Wednesday—means missing the poorest pensioners in the land. The basic state pension reaches those pensioners like nothing else. That is why we believe in it.
  Mr. Rammell: The same Liberal Democrat manifesto as my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) mentioned commits the Liberal Democrats not only to increasing the pension in line with prices, but to introducing a top-up of the basic state pension to meet the needs of the poorest pensioners. How is that different from the minimum income guarantee?
  Mr. Webb: The hon. Gentleman is right. I am well aware of what the manifesto said. We committed ourselves to ensuring that the incomes of those pensioners would rise at least in line with earnings. That is the basis on which we will work, but we need to go beyond that.
  Mr. Rammell rose—
  Mr. Webb: If the hon. Gentleman will allow me, I will tell him what we want to do in addition.
  The minimum income guarantee sounded like a good idea. The Government thought that if they changed the name, came up with a new scheme and got Thora Hird involved, all would be well, but there was a problem. They realised that by creating a chasm between the basic pension and the means test, they were also creating a savings trap. They were discouraging pensioners from saving for the future and saying to today's pensioners who had already saved, "What was the point of saving? You've got your small pension, but all it's doing is disqualifying you from the minimum income guarantee."
  What do the Government do? Instead of closing the gap between the pension and the means test, they increase it. If the Chancellor does what is widely expected of him on Wednesday and puts a fiver on the pension and takes the MIG up to £90, he will increase the gap between the basic state pension and the means test, which will push more pensioners on to means testing. I recently asked how many extra pensioners will be means-tested as a result of the increase under the new package, and was told that nearly 100,000 extra pensioners are to be means-tested.
  The Government decided to do something else to deal with the hole that they had dug themselves into by creating a huge gap between the basic pension and the minimum income guarantee. Instead of putting the pension up, they decided to have another scheme called pensioner credit, but because it is so complicated, they have said that it will be years before they can introduce it.
  In the meantime, however, they needed something else, which I think the Chancellor called transitional measures. What transitional measures could the Government possibly take between now and 2003? Well, let us think: what is happening between now and 2003? Oh, an election, so the Government decide to introduce transitional measures which will put money on the basic state pension, the very thing that they have spent several years telling us is a bad idea.
  The Government have said that they could not possibly put money into the basic state pension because it is poorly targeted, but they have now decided to pay £150 to every pensioner regardless of means. It is a complete mess.

  41
  There is no coherence to the Government's approach. There are pension increases when an election is on the way, but only a 75p increase when it is not. That summarises the Government's approach. More schemes, more claim forms. Why does it have to be so complicated?
  Mr. Tom Levitt: If the hon. Gentleman wants all funding for pensioners to be given through the basic state pension, what would be an adequate amount to replace what he is describing as gimmicks and what we describe as targeting resources where they are most needed? How would he pay for that?
  Mr. Webb: The £150 winter fuel payment, to which I presume the hon. Gentleman's remarks also refer—he is not indicating whether that is so—goes to every pensioner household in the land, regardless of means. It is impossible to imagine anything more untargeted. It is so untargeted that his right hon. Friend the Minister of State will get it this winter.
  The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): He is not a pensioner.
  Mr. Bercow: He is only 59.
  Mr. Webb: I would not begrudge him £150—I am sure he needs it. [Interruption.]
  Mr. Deputy Speaker (Mr. Michael Lord): Order. There are far too many interventions from a sedentary position on both sides of the House, but particularly from Labour Members. The hon. Gentleman must be allowed to carry on with his remarks.
  Mr. Webb: There is a rag bag of schemes—take-up campaigns, publicity campaigns and new schemes to deal with the problems of the old schemes. Even the free television licence scheme is a shambles. Many other hon. Members may have had my experience of receiving a letter asking whether I am over 75 and want to claim. Plenty of pensioners have received cheques to refund the money that they spent on the licence. Many pensioners do not have bank accounts, so they are being asked to send the cheques back so that they can have some money to take to the post office. This lot could not organise—well, it is a complete shambles.
  What, then, is our priority? The hon. Member for High Peak (Mr. Levitt) asked what should be done—
  Mr. Kaufman: Will the hon. Gentleman give way?
  Mr. Webb: No, I will not.
  The hon. Member for High Peak asked what level of pension we proposed, and I am keen to give him a specific figure. At our party conference a few weeks ago, I moved a motion on our new pensions policy, which our party has overwhelmingly endorsed. I can put on record precisely the policy on which we shall go into the next general election.
  We propose that those who benefited from the Lawson tax cuts of 1988 and are always on the top incomes, having done two, three, four or five times as well as those on average earnings—that is, those on more than
  42
  £100,000 a year—should be asked to pay more tax on their slice of income above £100,000. They, after all, are most able to do so. That would raise enough to allow us to put money on to the basic pension.
  We propose that, over and above the figure that the Chancellor announces for next April, there should be rises of a minimum of £5 a week for all newly retired pensioners, of £10 a week for those aged between 75 and 79, and of £15 a week for those aged 80 or more. Those figures are in addition to inflation, in addition to what the Chancellor announces, and in addition to the other payments that the pensioners currently receive.
  The payments will not be means-tested, but they will be intelligently targeted. That is the beauty of our proposals.
  Mr. Rammell rose—
  Mr. Webb: I think I had better ensure that I set out the entire policy.
  I mentioned an increase of £15 a week for those over 80. Why should the amount be tapered according to age? Because there is a strong link between the oldest pensioners and the poorest. I have received letters from pensioners up and down the land, and those in most need are often the oldest. Almost all are women, who are given a particularly raw deal in regard to both state and private pensions. We can give extra help to those in most need without forcing them through additional means-testing. That is the clear distinction between what the Liberal Democrats advocate and what the other parties advocate.
  Mr. Levitt: Will the hon. Gentleman give way?
  Mr. Webb: No; I am about to finish my speech.
  The Conservatives propose to give people back their own money, plus 42p top whack. Labour proposes a pre-election giveaway. On Wednesday, the Chancellor of the Exchequer will stand up and do a Chris Tarrant routine: "£2.25 for inflation—but we don't want to give you that! £3.40 for the earnings link—but we don't want to give you that!" It will be £5; it will be £8. Who wants to be a millionaire?
  Labour will be throwing the money at pensioners because there is an election around the corner. Pensioners, however, will remember what the Government did when there was not an election around the corner. They will remember which was the only major party in the House that voted against the 75p—the Conservatives abstained. At the next election, when Conservative candidates show themselves to have undergone a damascene conversion to the basic state pension, they will need to be reminded that, given the chance to decide whether 75p was enough, they said "We do not really know." I note that the Conservative party declined to table an amendment to today's motion. Clearly, only one party is expressing serious opposition to the Government on pensions: the Liberal Democrats.
  We believe that a substantial increase is needed in the basic pension. The Chancellor has created a huge gulf between the pension and the means test, and on Wednesday, whatever he says, he will increase that gap. We believe that there should be fewer pensioners on means-tested benefits, not more. We believe in a decent basic state pension, and we believe that we will be the only party to go into the next election committed to that.
  4.44 pm
  The Minister of State, Department of Social Security (Mr. Jeff Rooker): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
  "endorses the Government's approach to pensions and other policies for pensioners; notes that the Government has already committed £6½ billion more to pensioner benefits during this Parliament than was planned by the Conservatives, while ensuring that this additional expenditure is funded prudently and consistently with the Government's fiscal rules; strongly agrees with the Government that the basic state pension should be retained as the foundation of pension provision, and that most should be done for those pensioners who need most help through the Minimum Income Guarantee; supports the additional help for pensioner households, including winter fuel payments, which now gives them the equivalent of a further £3 a week and free TV licences for the over 75s, which were introduced from 1st November 2000; also supports the wide range of other measures taken by the Government for pensioners, the record investment in the National Health Service, free eye tests, help with home insulation and concessionary public transport fares and reductions in income taxation; and further agrees with the Government that the next priority should be to help pensioners with moderate savings and small occupational pensions to ensure that their thrift is rewarded and that they are able to share in the rising prosperity of the nation."
  I do not wish to be misunderstood, but I am one of the few Members of Parliament who can say with some certainty that I have a limited amount of time in which to listen to this drivel. The reality is that the speech of the hon. Member for Northavon (Mr. Webb) was thirty minutes of drivel. I shall do my best to answer some of his points, some of his highly misleading statements and, indeed, the contemptible scare stories that were deliberately designed to frighten people outside the House.
  The hon. Gentleman started off with a point about age discrimination. I wholly agree with part of his speech, as age discrimination is rampant throughout society in this country and goes across the board, whether in jobs or the health service. It is not the easiest thing in the world to deal with that but, as the House knows, we have attempted to tackle it in employment on a voluntary basis. We also made it abundantly clear with the publication of the report "Winning the Generation Game" that we are considering going beyond a voluntary approach. The hon. Gentleman therefore made a valid point.
  The hon. Gentleman made some assertions on the share of the gross national product going to pensioners, but did not provide figures or Hansard references. He was on the verge of giving a quote or reference, but did not do so. I suspect that he got a quote from a parliamentary answer that appeared some months ago. I have read the motion and done Liberal Democrat Members the justice of taking it seriously, even if I cannot take the hon. Gentleman's speech seriously. I went back and looked for that parliamentary answer because I recall it—although parliamentary answers in March are not good up-to-date information in November.
  One should look at expenditure on pensioners, including retirement pensions, winter fuel payments, means-tested benefits and other benefits paid to pensioners, as well as concessionary TV licences, which came in last week, and compare the last year of the previous Government, 1996–97, with the planning year 2001–02, which begins next April. Even before the Chancellor's statement on Wednesday about what will
  44
  happen next April, the percentage of the gross national product spent on pensions is higher than it was in the last year of the Tory Government.
  Mr. Webb: What about the first four years?
  Mr. Rooker: It is no good the hon. Gentleman saying that, as he said that we have spent less. I am telling him that we have spent more, even before the Chancellor's statement on Wednesday.
  Mr. Webb: And now?
  Mr. Rooker: It is no good, the hon. Gentleman cannot go back and rewrite his speech.
  Mr. Matthew Taylor: Will the Minister give way?
  Mr. Rooker: No, I shall not, as I am going to make my speech in my own way and answer some of the drivel that we heard before it becomes folklore that is repeated by Liberal Democrat councillors and campaigners up and down the country.
  Mr. Flynn: Will my right hon. Friend give way?
  Mr. Rooker: In a moment, but first I want to put the matter on the record so that no one can go round using the hon. Gentleman's statement, as they will have the knowledge that I rebutted it with figures, which are 5.32 per cent. and 5.33 per cent. That is a small difference, but it is bigger than the hon. Gentleman said it was, even before this Wednesday's announcement.
  Mr. Flynn: Will my right hon. Friend give way?
  Mr. Rooker: In a moment. I may be able to save my hon. Friend time, although I shall gladly give way if he is not happy with what I say.
  The hon. Member for Northavon raised the matter of the Government Actuary's report and, in response to a question asked by the hon. Member for Bournemouth, West (Mr. Butterfill), said that the Government were seeking to manipulate it. I do not think that the Government Actuary would admit to that, and it is useful for me to put on the record the fact that we have answered parliamentary questions on the matter in the last couple of weeks. I do not resile in any way from what I said when the Government accepted Baroness Castle's amendment at the final stages of the Child Support, Pensions and Social Security Bill last year. It is true to say that the Government Actuary is finalising his report on the effect on the national insurance fund of an earnings uprating of basic state retirement pension, and it will be published when it is completed. That is the phrase that we have used in parliamentary answers and in answers to letters from right hon. and hon. Members, but it is important to point out that, on Friday, Baroness Castle received a letter from the Government Actuary in which he answered some specific questions. He said:
  I can confirm that I submitted a report to the Secretary of State during the week ended 6 October, as indicated by Mr. Young in his letter to the Secretary of the Southwark Pensioners Action Group,

  45
  which is what the hon. Member for Northavon quoted. The Government Actuary went on:
  In my letter to the Secretary of State covering the report I made it clear that the report did not cover the Government's proposals for uprating in April 2001. In pursuance of my responsibilities with respect to the uprating orders I would either have to amend this report or lay a supplementary report detailing these effects.
  The Secretary of State wants Parliament to have all the relevant information before it debates the uprating orders.
  That is the commitment that the Secretary of State for Social Security made clear. Before Parliament is asked to approve the uprating orders, the House will have all the relevant information, including all the reports available. That commitment has been given and will be met. It is outrageous for hon. Members to imply that the Government are deceiving the House or that Ministers are lying.
  Mr. A. J. Beith: Will the Minister give way?
  Mr. Rooker: I have not finished the letter yet. It goes on:
  Accordingly he—
  that is, the Secretary of State—
  asked, and I—
  that is, the Government Actuary—
  have agreed, to complete the report by adding a further section to take account of the Government's proposals for uprating in April 2001. The Secretary of State has asked me to complete that section in time for him to lay the report when he sets out his proposals to Parliament next week.
  As everyone knows, the Chancellor of the Exchequer will make the pre-Budget report statement on Wednesday and the Secretary of State for Social Security will come to the House and make a statement on Thursday, so there is nothing secret. Nothing is being hidden. It is only once our plans for next April's uprating have been announced—they will not be announced in the main until Wednesday and in more detail on Thursday—that the report can be published.
  Therefore, it is not possible to publish the Government Actuary's report in a way that allows right hon. and hon. Members to have a meaningful debate, but when the House is asked to vote and to approve those orders—some time in the near future, subject to the business managers—the report will be available. It will be published on Thursday.
  What is the problem with that? The report could not conceivably be published beforehand. Any report that was half completed and put in the hands of hon. Members for today's debate would not take account of what will be proposed for next April. Surely, it is relevant for Members to have the full picture before we get involved in a debate and in decision making.
  Mr. Beith: May I suggest that, in any publicity the Government give to the figures to be announced on Wednesday and Thursday, any press release or briefing given by the Department contains the relevant passage from the Actuary's report, particularly if that briefing takes place before an announcement to the House?
  Mr. Rooker: Drivel plus. The report will be published in full. We are not in the position of manipulating the Government Actuary's report.
  Mr. Simon Hughes: You are delaying it.
  Mr. Rooker: We are not delaying it—it is not finished. It cannot be finished until the Government Actuary is given the figures that the Chancellor will announce on Wednesday.
  Mr. Beith: Has the Government Actuary been given the figures?
  Mr. Rooker: The right hon. Gentleman cannot expect me to answer that.
  Mr. Deputy Speaker: Order. Again, we cannot have conversations from sedentary positions with the Minister at the Dispatch Box. If Members want to intervene, they should stand up in the normal way and the Minister may or may not give way.
  Mr. Rooker: As Liberal Democrat Members well know—and as they knew when they chose the subject of today's debate—they cannot have any information whatever on Wednesday's uprating statement. I can answer no questions today on Wednesday's statement.
  Mr. Matthew Taylor: Will the Minister give way?
  Mr. Rooker: No.
  Mr. Flynn: Will my right hon. Friend give way?
  Mr. Rooker: Yes; I promised my hon. Friend that I would.
  Mr. Flynn: Does my right hon. Friend recall telling the House, on 24 July, that the earliest opportunity to publish the Government Actuary's report would be in January 2001? Does he also recall that the Deputy Government Actuary—in his letter to the Southwark Pensioners Action Group, of which I am a member—said:
  The report on the financial impact of price and earnings indexation of the basic pension—
  which is what he was talking about—
  is now at a very advanced state and I am hoping to be able to submit it … next week.
  The Deputy Government Actuary's letter was written on 28 September, since when I have tabled five parliamentary questions—including one during the recess—on the subject. However, I can generously describe the answers given to me by my right hon. Friend the Minister as evasive. Would it not be better if he had replied to those questions with the type of answers that he has just given the House?
  Mr. Rooker: Indeed; that is precisely what I have done. As I said,
  The Government Actuary is currently finalising his report on the effect of the National Insurance Fund of an earnings uprating—
  of pensions—
  and it will be published when it completed.—[Official Report, 2 November 2000; Vol. 355, c. 575W.]

  47
  The report will not be completed until the Government Actuary has the figures that the Chancellor will use on Wednesday. That is precisely what I said in parliamentary answers to my hon. Friend the Member for Newport, West (Mr. Flynn) and to other hon. Members.
  I should address some of the other issues raised in the debate, including those on administration. I do not deny that NIRS2 is a problem that has not been solved. However, I am not going to review the history of NIRS2 or the preceding years in which competitive tendering was used. I should add that the word "stable", when used in relation to information technology systems, does not mean that those systems are 100 per cent. perfect.
  Each month, about 50,000 plus people become pensioners. Currently, the system is not dealing correctly with payments to about 2,300 of those people, which is not satisfactory. Also, there is still a backlog of information from NIRS2 to the Benefits Agency. We are, however, working very quickly to correct the situation.
  I do not think that it is a secret that the Department of Social Security is not proud of our IT systems, which are rubbish. Over the years, underinvestment in IT and purchase of the cheapest systems have brought us to the current sorry state. Although I shall not blame all that on the legacy that we inherited, everything cannot be put right in three years. We are purchasing and designing new systems. Had hon. Members examined some of the finer points of detail of the spending review 2000, they would have seen that more money is being made available to obtain those systems.
  In his remarks on inherited SERPS, the hon. Member for Northavon showed himself to be a disgrace to his party and to the House. By refusing to accept that the Government have accepted, from the ombudsman and from the Public Accounts Committee, that the burden of proof is on the Government and not on the individual, he sought deliberately to create a disturbance among the public. Our difficulty in designing a scheme is that the burden of proof is on the Government, not on the individual. It is for the individual only to make a claim, subject to procedures that we will be introducing for debate.
  The hon. Gentleman knows that it is untrue that individuals will have to satisfy the burden of proof, and it is dishonourable and disgraceful for him to repeat that statement on the Floor of the House.
  Mr. Webb: The Minister is getting extremely carried away. It is a serious issue about which many pensioners have contacted me, because they are concerned about the Minister's utterances on it. I think that everyone agrees that those pensioners saw duff literature. Will he clarify whether the Government will seek to disprove their claims that they might have taken different action, or will their assertion that they might have taken different action be sufficient?
  Mr. Rooker: The House can debate that when it debates the regulations—[Interruption.] No; the burden of proof is on the Government, not on claimants. I cannot express the position any clearer than that.
  48
  The hon. Member for Northavon is trying to twist my words. Claimants do not have to prove anything. They do not have to have documents; they only have to make a claim. They have to fill in a form and answer some questions. The onus of proof is on the Government, not on claimants. I have said that since March, and it is entirely false and disingenuous of the hon. Gentleman to try to assert otherwise.
  In his speech, the hon. Member for Northavon talked about it taking years to introduce the pension credit. A few sentences later, he slipped in the date of 2003. We hope to get the pension credit up and running in two years, and we shall publish detailed information on that. As we have not yet published that information, and there is not much on the subject in the public domain—other than the speech of my right hon. Friend the Secretary of State for Social Security—the hon. Gentleman cannot say that that information is complicated. A consultation document on the subject will be published very shortly.
  I am not sure what the hon. Member for Northavon said about his party's policy on the minimum income guarantee, because I was adding up the figures. He can make assumptions, based on press speculation—I cannot—about Wednesday's announcement. However, it did not seem that pensioners aged between 65 and 75 would end up with a pension that reached even the present MIG level of £78, let alone our £90 proposal. I say to pensioners who are now on £78.45p that it is not a princely sum—it is a safety net, and one cannot have a comfortable life on it. However, before April, the figure was £75; there has been an increase of £3.45. By next April, the figure will be £90—an increase of almost £12 a week. I do not hear many cheers from the Liberal Democrats about that increase for the poorest pensioners. I assume that they will vote against it, as they did with regard to the help for pensioners earlier this year.
  Mr. Simon Hughes: Will the Minister give way?
  Mr. Rooker: No, I will not. Let me finish this point.
  The hon. Member for Northavon seemed to imply that the winter fuel help would disappear. From his calculations, I thought that it had disappeared. We know that it would disappear under the Tories' plans, and they have the brass neck to complain about us not getting money to men aged between 60 and 64 who have been working when they plan to take that money off them anyway.
  This month, the over-75s start to get their free television licences. This week, the cheques start to go out for the winter fuel allowances. Those are not celebrated by Opposition parties. All they do is come here to whinge and moan. There will be good news later this week and we will be able to rebut in detail many of the assertions made by the hon. Member for Northavon.
  The hon. Member for Northavon has not outlined to the House a cohesive strategy for pensioners. He let it slip that the Liberal Democrats' policy would be paid for by taxing those on £100,000. Earlier this year, they said that they would pay for the policy by abolishing SERPS—the additional pension. We have not heard that rebutted, so our assumption must be that the Liberal Democrats would still have to abolish SERPS to make their policy work. Those who have been on average earnings for the past 20-odd years will get SERPS payments of £70 a week. The Liberal Democrats are offering to take that away. That is more drivel.
  5.2 pm
  Mrs. Jacqui Lait: I am glad to follow the Minister, but I hope that I do not get so excited. As all will be revealed on Wednesday, the Minister must feel—I have a great deal of sympathy with him—a bit like the emperor without any clothes.
  I agree with the Minister's analysis of the speech by the hon. Member for Northavon (Mr. Webb), which was a classic Liberal Democrat speech—holier-than-thou, sanctimonious to the nth degree and of breathtaking cheek, particularly in the attempt to exempt his party from any electioneering. His speech was guaranteed to be attractive to a certain part of the electorate, without taking any responsibility. Suggestions have come today from the hon. Member for Northavon and, last week, from the hon. Member for Sutton and Cheam (Mr. Burstow) in Westminster Hall, on how much the Liberal Democrats intend to give pensioners. I cannot think of a better, or more expensive, way of appealing to one particular, but very large, group of the electorate.
  It might be worth while to go through some of the information that we elicited from the Liberal Democrats in the debate in Westminster Hall on the exact cost of their proposals.
  The hon. Member for Northavon set out what he thought was the cost of the £5, £10 and £15 hike, and he maintains that it can be covered by the 10 per cent. hike in the higher rate of tax for people earning more than £100,000. My calculations show that that hike would raise only £2.6 billion, and that the cost would be £4.5 billion.
  Mr. Paul Burstow: No, £3.1 billion.
  Mrs. Lait: Well, I did not want to burden the House with figures, but I am willing to enlighten the Liberals as, judging by the puzzled face of the hon. Member for Northavon, they have not done their sums.
  My calculations show that £5 a week for all pensioners would cost £2.8 billion; that the cost of the extra £5 for pensioners aged between 75 and 79 would be £500 million; and that the further £5 for the over-80s would be £1.2 billion: a total of £4.5 billion. The Liberals are £1.9 billion adrift on the total that they plan to spend.
  Last week in Westminster Hall, the hon. Member for Sutton and Cheam declared that the Liberal Democrats' target was to offer single pensioners £90 a week and couples £135 a week. That was all hedged around with phrases about growth in the economy and not reaching that stage in one go. In fact, growth in the economy is usually linked to earnings. Despite the hon. Gentleman trying to obfuscate the situation, we know that the Liberal Democrat conference chucked out that proposal, possibly because the delegates did not want to frighten their supporters with the consequences, which, as worked out by the National Institute of Economic and Social Research—not a body known to favour Conservative philosophy—would be to put 5p on the basic rate of income tax.
  The Liberal Democrats have adjusted their figure, as we heard last Tuesday. I was surprised that the hon. Member for Northavon did not use the figure, because it represented such a clear commitment and, given how much they are pandering to the pensioner vote, I should have thought that they would want to re-emphasise it.
  50
  However, the total cost of increasing the basic state pension to £90 for single pensioners and £135 for couples is £8.5 billion. I am prepared to subtract from that the £2.6 billion that we have already agreed would be raised by the tax hike, so that we get a difference of £5.9 billion, which is the equivalent of an increase of 2.3p in the basic rate of tax. Or are the Liberals planning to increase the higher rate of tax on those earning more than £100,000 to the 73p in the pound that I have calculated it would cost? Those of us of a certain age remember what that did to public finances in the 1970s.
  We have heard a speech of such breathtaking electioneering cheek that the House can treat the suggestions in it with the contempt that they deserve and get back to the real world of trying to help pensioners.
  I am concerned about a broader matter mentioned in the motion: long-term care policy. Most of us would agree that paying for nursing care in England and Wales is a recipe for bureaucracy. Anyone who has had anything to do with defining what is nursing care and what is not will know the difficulties.
  In recent days, we have seen emerging the very difficulty that we warned about all along when we were debating the establishment of the Scottish Parliament. The Scots are being promised that all their care costs will be covered. They are in charge of their own budget and can make their own decisions; the Scottish Parliament and the Scottish people have to pay for it. We can clearly see a battle royal taking place between the Scottish and English Executives—between No. 10 and the Scottish Parliament. Scots are able to vote on English and Welsh issues but not the other way around. We will also have the dubious pleasure of watching those with a dual mandate having to vote against their Scottish parliamentary colleagues and for the London Government, or for the Scottish Parliament and against the London Government. It will be most interesting to see what happens when people who sit in both Parliaments have to vote.
  Mr. Burstow: Is it now the Conservative party's official position in this House that personal care should be free on the basis of assessment of need, as the royal commission recommends?
  Mrs. Lait: The point that I was making, which the hon. Gentleman obviously missed, was about the constitutional position known to many as the West Lothian question, which is the key to the illogicality of devolution. What happens on long-term care, as the hon. Gentleman should know, is the responsibility of the Department of Health, and some elements of social security may well be included. If he is not careful, he will get the same lecture on annuities as he got last Tuesday. He gave me the opportunity to give it then, and I am happy to give it again now, but I know that a number of Back Benchers wish to contribute to this debate on pensioners' income.
  Many of us have seen the statistics arising from the Government's annual poverty report, which show that, since 1997, the number of pensioners in poverty has increased from 28 per cent. to 30 per cent.—[Interruption.] Indeed, it is not mentioned by the Government. Their attempts to change it—although who knows what will happen on Wednesday—appear to be falling on stony ground. We still see pensioners losing out, as has been discussed, from the minimum income guarantee.

  51
  We have all seen the Thora Hird advertisements on television. On my way here today, listening to BBC Radio Kent, I heard someone from the Benefits Agency explaining the minimum income guarantee and how it will work. I know that many letters have gone out to pensioners who could claim. From surgery experience, I am aware that some have still not received their letter or, if they have, that they thought that it was junk mail and chucked it in the bin. However, this past week has seen the figures so far emerging and they have not been a pretty sight.
  In last Tuesday's debate, the Under-Secretary of State for Social Security, the hon. Member for City of York (Mr. Bayley), told us that 500,000 people have inquired about the campaign. However, it has taken parliamentary questions to extract the answers as to how many have been successful. On 31 October, we were told that 24,746 claimants had been successful so far and that 22,988 had been unsuccessful. Therefore, barely 10 per cent. of eligible people have replied; only half are getting anything, and the rumours are that they are finding the sums pretty small. I would be most interested to know the largest and smallest sums awarded so far, and the average payment.
  Mr. Rooker: Because of the lack of time, I did not deal earlier with the take-up. The last time that I looked at the average figure of those successfully claiming, it was just over £20 a week. Furthermore, not all the 2.3 million letters have gone out; they are still being sent out at the rate of 30,000 a day.
  Mrs. Lait: I am very pleased to have the average figure. We knew that the letters were still going out. However, more significantly, only 10 per cent. of people are replying at present. As anyone in marketing knows, 10 per cent. is a jolly good return. I congratulate the Government on attracting replies from 10 per cent. of people; a marketing company would consider 1 per cent. a very good return. However, 10 per cent. is still scandalously low, and I hope that more people will be able to claim that to which they are entitled.
  People are losing out in other ways as well. We heard that a million people are still waiting for winter fuel payments. The Under-Secretary of State for Social Security, the hon. Member for Wallasey (Angela Eagle), said:
  all payments should be issued by the end of September.—[Official Report, 11 April 2000; Vol. 354, c. 271W.]
  Perhaps we could be updated on that as well, because we understand that a million people are still waiting.
  It is worth stating that the length of time taken to deal with the problem has increased. However, the then Pensions Minister, the Financial Secretary to the Treasury, the hon. Member for East Ham (Mr. Timms), predicted that, by the end of the year,
  everybody would have received all of the benefits, plus any compensation …—[0fficial Report, 26 July 1999; Vol. 336, c. 97.]
  The Minister of State said that 2,300 new cases a month were emerging. I should be most grateful to him if he would confirm that figure because those cases are in addition to the 100,000 people who are still waiting.
  Mr. Rooker: There was an argument about whether the system is stable. I shall not refer to my folder, but I
  52
  said that being stable does not mean working at 100 per cent. accuracy. The system is not 100 per cent. accurate at present. About 650,000 people become pensioners each year—50,000 plus a month—but 2,300 are not dealt with accurately. I saw that figure this morning. However, that does not mean that they do not get their pensions. Some pensions are calculated on the basis of what the figure may be and involve an overpayment or an underpayment.
  Mrs. Lait: I am grateful to the right hon. Gentleman. I accept that the word "stable" does not mean 100 per cent. accuracy, but I take that to mean that, of the new pensioners who can claim SERPS payments, approximately 2,300 a month are new cases. It is useful to have that information on the record. Taking into account all such matters—NIRS2, MIG and the winter fuel payment—it is interesting that 2.5 million people are awaiting the pleasure of the older person's champion, otherwise known as the Secretary of State. To add insult to injury, it now appears, from coverage in Pensions Week, that the reorganisation at the Department of Social Security has led to a shortage of pensions advisers, so much so that the Department has asked the National Association of Pension Funds to do its work for it.
  We, and all other hon. Members, await with interest the Chancellor's statement on Wednesday, although I assume that information on the pensioners credit will be given on Thursday. We hope that the consultation document will be published on Wednesday, so that we have time to study it before Thursday's statement and can provide a relatively reasoned response, which we may otherwise not be able to give. I congratulate the Government on the fact that, unusually for them, they have so far failed to leak what is in that document or, indeed, to spin it.
  Precise details about the pensioners credit are scarce, but I cannot understand how a pensioners credit and the transitional arrangements could be introduced without some sort of means test. Thousands of pensioners may have to fill in tax forms, as opposed to income support forms, but that still constitutes a means test.
  Mr. Michael Jabez Foster: Does the hon. Lady regard herself as being subject to a means test when she completes her tax return?
  Mrs. Lait: The pensioners credit has a great similarity to the working families tax credit and, as the hon. Gentleman will know, the tax credit is merely income support provided by another Department, and the pensioners credit will, in effect, be the same—hence a means test will be involved.
  We shall make our own judgment of the Government's proposals when they are produced on Wednesday and Thursday, and so will the pensioners of the United Kingdom. To date, they and we are unimpressed by the Government's treatment of them.
  5.19 pm
  Mr. Eddie O'Hara: Our debate so far has been combative. As the chairman of the all-party group on ageing and older people, I shall refrain from making party-political points. Clearly, other hon. Members in the Chamber will make enough of them.
  I pay tribute to the great deal that the Government have already done for pensioners. I recognise that the £6.5 billion allocated to pensioners in benefits and in kind

  53
  during this Parliament is considerably more than the cost of uprating pensions in line with earnings. In view of my constituency's demography, the majority of pensioners there will benefit from the Government's policy of targeting the poorest pensioners.
  I am pleased by the increase in the threshold for payments of the minimum income guarantee and the pension credit for pensioners with second pensions and modest savings. Those measures go some way towards addressing my concerns, which I have expressed on several occasions in the Chamber, about those pensioners who are just above the income support and minimum income guarantee thresholds, of whom there are many in my constituency. They are typical blue-collar workers with a small occupational pension from, for example, Plessey or British Insulated Calendar Cables.
  On the other hand, I want to discuss several areas in which the Government have not yet quite got their approach right and to urge them to do so in future. My right hon. Friend the Minister commented on the state earnings-related pension scheme, and I do not envy the Government their problem with SERPS. It was not of their devising, although they have the unenviable task of having to sort it out. I hope that my right hon. Friend was right to say that the onus of proof will lie with the Government. I have previously expressed to him my concerns about the fact that any system of remedying the mess that is based on justification is designed to be inequitable and perhaps to disfavour those in most need. We shall see.
  The 75p uprating of pensions in line with inflation last year will be discussed extensively in this debate. It was entirely logical to those in the Treasury who crunch numbers in the abstract, but it was psychologically crazy to anyone who knows and cares about real pensioners. On previous occasions, I referred to the prism—it might be a distorting mirror—through which pensioners will continue to view the Government's pensions policy. That is sad, in view of the fact that their policy contains many generous provisions.
  The argument about whether pensions should be uprated in line with earnings is complex. The Government maintain that that would be unsustainable in the medium to long term, and that the concept is outmoded because, for many pensioners, the state pension is not the main element of their retirement income. I understand the Government's concern that an increase across the board would put pension payments into the pockets of those who least need them. They are better targeted at those who need them most, but it is surely not beyond the wit of the Treasury to find a means to claw back some money from those who do not need it.
  I disagree with the suggestion of the hon. Member for Beckenham (Mrs. Lait) that clawing back through the tax system or the allowances system involves means-testing. It does not involve means-testing, as I understand it. Everyone who pays tax has to have an assessment, but those who pay large amounts in tax commonly have different reasons for being sensitive to means-testing than do those many pensioners who simply find it demeaning.
  Mrs. Lait: The pensioners' credit is for people who have a small occupational pension and who do not already pay tax. Many of them will have to fill in some type of form—whether a tax or an income support form.
  Mr. O'Hara: I do not agree with the hon. Lady that that equates to means-testing. I was referring to those
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  people whom the Government rightly do not want to receive pension benefits that are better targeted elsewhere. Such people do not fill in their tax return; they have an accountant to do it for them.
  Pensioners regard the pension to which they have contributed not as a benefit or a handout but as an entitlement for which they have paid through their contributions. We are advised that there is a surplus in the national insurance fund that could provide an increase in line with earnings—at least in the medium term. However, in the absence of the Government Actuary's report, it is difficult to make a judgment on that matter, although I note the Minister's reasons for the delay in publishing the report.
  Surely there is room for some policy improvement—on increasing pensions in line with earnings rather than with prices. The minimum income guarantee is the Government's own estimate of the minimum decent income for a pensioner. In the medium term, could we not at least move towards that as the acceptable amount for the basic pension? At the least, could we not have a discretionary increase in excess of inflation? I look forward to hearing good news on that in the autumn statement, although I realise that the Minister cannot be drawn on that at present.
  Mr. Simon Hughes: As this is the last relevant parliamentary debate to be held before the Chancellor makes his announcement on Wednesday and before the subsequent debates on its social security aspects, is the view of the all-party group on ageing and older people that it would be preferable for fewer people to be in receipt of means-tested pensions or pension top-ups and for more people to receive a higher non-means-tested basic allowance? That is certainly the view that pensioners of all parties have put to me. Everyone understands that they may have to fill in a tax return and pay tax, but surely it would be a bad result if this week's announcements meant that more people were means-tested.
  Mr. O'Hara: I hesitate to speak for other members of the group, but my view is that there should be a more generous basic pension, across the board, even if it cannot at present be increased in line with earnings.
  To help pensioners to share in the prosperity of our country—a laudable aim in the Government's manifesto for the previous general election—is not an act of charity. When pensioners were earning, they contributed to that prosperity. They worked and, in many cases, fought to lay the foundations for the prosperity that we enjoy. What better argument could there be for the Government to show a little more generosity towards older pensioners—those aged between 75 and 80—in the settlement to be announced in the autumn statement?
  5.28 pm
  Mr. John Butterfill: None of the parties can look back on their record on pensions with any great credit. The Liberal Democrats made an attack on the Conservatives' record when we were in office. Under Baroness Thatcher, it is certainly true that we broke formally the link with earnings, although during our period in office the increase was slightly higher than inflation—about 10 per cent. higher. Furthermore, we introduced the winter fuel allowance—[Interruption.]—

  55
  Yes, we did. I point out to the Minister of State, Department of Social Security that the real link with earnings was first broken when his party was in office—under a Lib-Lab coalition—although the Minister himself, to his great honour, was extremely critical of his Government when he was a young Back Bencher; the figures were fiddled and he said that the earnings link had been broken.
  The problem is that all parties in the House, knowing that it would never be possible to give pensioners a full pension that would sustain them throughout their retired lives, have somehow connived, particularly at election time, to hint that that might some day be possible. No one has done that more than the Liberal Democrats with their series of wholly unsustainable and inadequately costed proposals that they know that they will never have the opportunity to implement. They know that all they are doing is putting out fodder for their Focus magazines.
  Mr. Webb: We have tabled interminable questions on these issues. The revenue from a 50p rate in a full year is £3.1 billion. The cost of our proposals—I can show the hon. Gentleman the written answers—net of savings on tax on means-tested benefits is £3.1 billion. What more can we do than that?
  Mr. Butterfill: I prefer the figures that my hon. Friend the Member for Beckenham (Mrs. Lait) gave. Even if the hon. Gentleman were correct, he is saying that his proposal is affordable. Even if were affordable in the short term, it would not be affordable, as he well knows, in the long term. Indeed, the present system is not sustainable in the long term. Anyone who has studied the issue sensibly and for a length of time—many Members on both sides of the House have done so—knows that the present system is not sustainable in the long term because of a demographic time bomb. People are living longer and not a state in the western world is capable of sustaining a system that is wholly unfunded in the way that ours is. It is a pay-as-you-go scheme that will never be affordable in the long term.
  Mr. Flynn rose—
  Mr. Butterfill: I give way to the hon. Gentleman, because he knows much about these matters.
  Mr. Flynn: I refer to a booklet entitled "The Age of Entitlement" that was published by the hon. Member for Havant (Mr. Willetts). He refers to the myth of the demographic time bomb, which was used by the Conservative party when it was in government to wreck the national insurance system. In addition, the evidence given to the Select Committee on Social Security made it clear that the funds in the national insurance system now are enough to restore the link for the next five years and will be enough for the period after that if national insurance funding increases by just the rate of inflation.
  Mr. Butterfill: The hon. Gentleman studies these matters carefully and he will know that there are many conflicting views. The majority view, which is expressed by all sorts of experts on the subject—I have read as many publications as the hon. Gentleman—is that the present
  56
  system is not sustainable. Even if it were, it would be sustainable at a level of pension that would never be adequate for people to live on without additional savings of their own or the provision of means-tested benefits by the state. That is the point that I want to make. We must try to get away from the politicking and down to the reality of what can and should be done by all of us on an all-party basis to provide a sustainable decent standard of living for pensioners in future.
  There are three groups in society. The young have inherited a wonderful economic climate and will have the opportunity during their lifetimes to make themselves rich beyond the aspirations of any of us here. Most of us probably represent the middle group and then there are the significantly elderly—particularly those aged over 75—who fought in the last war and grew up in a period of austerity. They did not have the opportunities that we, and certainly the young, have had to save for their retirements. If we are going to make a change, we should single out the elderly and accept that we have an inter-generational responsibility to pay them, as of right, a decent pension.
  For the intermediate group—that includes most of us; certainly anybody between the ages of 40 and 65, and perhaps those between the ages of 40 and 70—we should say that the present system will continue. We should tell them, "You should have been able to save something for your retirement. It is reasonable to assume that you might do so and, therefore, you will not be entitled to more than the present system provides." For those who fall through the net, there should be the prospect of some means-tested safety net.
  Most people under the age of 40 view with horror the idea of having to live on a state retirement pension—and quite rightly so. They know that they must save for their old age and are quite prepared to do so. We should make that far more possible for them. At the moment, a series of incentives—many of them introduced by my party—is proving inadequate to persuade people to save.
  The Government stakeholder pension scheme benefits nobody. The poorest group of people, whom the Government are keen to encourage, will find it better to be on the minimum guaranteed income and, frankly, it would be pension mis-selling to sell them a stakeholder policy. The richer group have better savings vehicles that are not encumbered by the ludicrous rules that currently apply to pension saving. Therefore, only a small group of people in the middle could benefit from stakeholder pensions, but they are not those whom the Minister of State and his party wanted to target.
  Eventually, the answer must be to look at what has happened in other states, such as Australia, Argentina and Singapore. We need a compulsory retirement scheme into which everyone will have to pay. The young should be told that there will not be anything else and that they must save for their retirement. Then, we should concentrate on looking after the group of people to whom we all have an obligation—those who were not able to save during their working lives—and pay them a decent pension.
  5.37 pm
  Mr. Michael Jabez Foster: Given that about a third of my electorate are retired, my concern is that we need to do better—even than we have already. I know, however, having gone around the constituency

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  just recently, that many of my constituents already recognise just how much better things are than they were three years ago.
  I do not think that people will forget that, in 18 years, the previous Government badly short-changed pensioners. Many will recall the hardship that pensioners suffered without relief. Even when the economy was going well during the many years of rising prosperity, there was nothing for pensioners beyond a basic increase in line with prices. That makes it clear where the Conservatives have been coming from. That record will not be forgotten; pensioners were not born yesterday.
  When I faced the electorate in 1997, not one of my political opponents proposed anything more than an uprating of pensions in line with prices. That was true of the Liberal Democrat candidate, as it was of everyone else. However, because things have gone well, the Government have done better than could possibly have been envisaged. Benefits such as the minimum income guarantee, the uprating in line with wages, fuel payments and free television licences for older pensioners could not have been expected in 1997. Those things are appreciated, but I acknowledge, as I am sure many hon. Members would, that pensioners need and want more.
  I have spoken to a number of pensioners over past weeks and found that, on analysis of their incomes, very few regard themselves as worse off under the Labour party. In fact, I have found quite the reverse. Pensioners get excited at public meetings, but when I had the opportunity to offer to write a cheque for the difference to anyone who was worse off, no one came forward. That is not to suggest that the pensioner's lot is sufficient, but they are better off under Labour than they were three years ago, and certainly better off than they would have been under the policies of the other two major parties.
  My concern centres on the way in which things could get worse—indeed, they could only get worse if the Conservatives were to have the opportunity they seek—for the one third of my pensioner constituents who are on or near the level of the minimum income guarantee. They would lose from the minimum income guarantee no longer being upgraded according to wages, as well as on the winter fuel payment and free television licences. Happily, most of my constituents have seen though the Conservatives' hall of mirrors and are unlikely to fall for it. It is by one's deeds that one is judged and the Tories have a long way to go, especially among our experienced constituents, who remember them for what they did, not for what they say.
  For all their good will, the Liberals never promised more than Labour has provided—how could they, when they reject the means by which the Labour Government have delivered an economy that is able to create options to pay more? If the Liberals early spending commitments had been implemented and their refusal to back the new deal had been accepted, we would be looking, not at a budget surplus this year, but at a deficit that would make it impossible to help those to whom we want to give priority.
  It is important that we abandon the dangerous idea, often mentioned by hon. Members, of linking pensions with national insurance contributions. I had the Library calculate current pensions based on 40 years' national insurance contributions at the basic rate. The result would be a pension of £40 a week—of course, that pension
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  would be upgraded according to inflation, but it is significantly less than is already paid. When the Tories talk about privatisation, with private pensions replacing the state system, we must remember that pensioners have made a wider contribution to our society, for which they should be rewarded; that contribution is more than merely the national insurance contributions they made, which would pay far less than even the current meagre pension.
  Mr. Flynn: Does my hon. Friend recall that there was a substantial sum known as the Treasury supplement which was paid into the national insurance fund from 1911 to the mid-1980s, to which all those who are pensioners today have contributed? Therefore, one cannot measure the pension only using national insurance contributions; one has to take into account the sums paid through the Treasury supplement, which was interrupted in the late 1980s by the Conservatives.
  Mr. Foster: I accept my hon. Friend's point that pensioners have made a contribution greater than their national insurance contributions alone. My point is that, often, the Liberal Democrats and the Conservatives imply that national insurance contributions alone could pay for a pension greater than that which pensioners now receive. That is far from the truth. If the sums involved in national insurance contributions were paid into a private scheme, as the Conservatives would have us do, the resulting pension would be far smaller than the one that is currently paid. Their calculations are invalid. Whether or not they have been able to contribute through taxation, people's broader contribution to society should be taken into account.
  I strongly support the Government's desire to improve the lot of all pensioners while simultaneously targeting the greatest benefits on those in greatest need. However, I believe that there is a weakness in the way we attract claims from those who are deserving of extra help. The problem is that we have mixed up supplementary pensions with the income support system: there is a significant difference between those who require temporary assistance while awaiting employment opportunities, for example, and those who have completed their years of toil and now look forward to security in retirement.
  The supplementary pension that is sometimes necessary to produce a minimum guaranteed income should not be referred to as "income support". It is a supplementary pension for which people have worked and which they deserve. The perceived degradation of older people claiming an income support payment could easily be alleviated by changing the name of the payment—perhaps by using the term "supplementary pension" to refer to that special payment applied only to older people who require extra help.
  I do not accept, as is sometimes suggested by the Government in answer to questions, that legislation is required to change the terminology on a form. That could be done without a great deal of effort. When the next version of the form is printed, perhaps the heading could be something other than "Income Support".
  I commend the Government for their work in targeting groups that may be eligible, but while the term "income support" persists, there will be those who refuse to claim it. Many pensioners, rightly or wrongly, associate income support with folk sitting outside McDonald's with their dogs and their begging bowls. That is not an image that pensioners are prepared to accept.

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  I plead with the Government to look again at the administrative apparatus for delivering the minimum income pension. That should refer to a minimum retirement income, and the difference between other incomes and that level should be made up by a retirement supplement.
  Terminology is important. To some extent pensioners have been aided by the introduction of telephone claims, but they will not fill in forms that warn of the dire consequences of fraud. More work needs to be done on that. However well-meaning Department of Social Security staff are, specially trained staff are needed to work with the claims of elderly people. Pensioner applicants are not skivers and must not be made to feel uncomfortable when they make their claims.
  Much has been done, but much remains to be done for our pensioners. A change in the name of that additional benefit would make an enormous difference to many people in my constituency and elsewhere.
  5.46 pm
  Mr. Paul Burstow: The hon. Member for Hastings and Rye (Mr. Foster) referred to the Liberal Democrats' commitment to additional investment in public services early in the life of the present Parliament. Hon. Members on both sides will recall that on a number of occasions we highlighted what we believed to be weaknesses in public services that needed early investment. It is only recently that the Prime Minister has acknowledged those weaknesses and the fact that the Government failed to invest in the early days of their Administration to address them. For that reason, we continue to have NHS winter crisis after winter crisis.
  Mr. Jeremy Corbyn: Will the hon. Gentleman give way?
  Mr. Burstow: Briefly, as I must make progress.
  Mr. Corbyn: I entirely agree with the hon. Gentleman's point about investment in the public services. In a spare moment, will he ask Islington Liberal Democrats why they are closing day centres for the elderly, other day centres and luncheon clubs?
  Mr. Burstow: One of the reasons, I suspect, is that the Government have decided that the data changes that would lead to an increase in standard spending assessments for London this year will not come through. Consequently, London will lose substantial resources. I imagine that that causes concern to the hon. Gentleman as well. I shall bear in mind what he said and find out whether that is, indeed, the case.
  I return to the subject on which I intended to speak—long-term care. At the last Labour party conference before the 1997 general election, the then Leader of the Opposition, now the Prime Minister, gave this pledge:
  I don't want to live in a country where the only way pensioners can get long term care is by selling their homes.
  That was clear and unambiguous, and it was deservedly welcomed by many across the country. It was a promise to act to end the grotesque spectacle of the debt collector pursuing the dementia sufferer for care home fees.
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  Three years on and one royal commission later, what is left of the Prime Minister's promise? Nothing but bitter disappointment and a sense of betrayal among many people outside. What do the Government propose to put in place of the Prime Minister's pledge to the Labour party conference in 1997? The sop offered by Government is that nursing care will be free in future. Legislation will be needed to bring that about, and it will not start until 2003 at the earliest.
  Everyone in the country, and many of my constituents to whom I have spoken directly about the matter, thought that nursing care was free anyway. They are puzzled about why the Government intend to give them the great gift of free nursing care.
  The message about the Government's views on long-term care is plain. Care is free for those who have a medical condition from which they can recover. That applies to every aspect of the care: hotel accommodation, food, personal care and nursing care costs. Everything is free, and so it should be. That is part of our commitment to a universal, free health-care system. However, care for those who suffer from a chronic medical condition such as Parkinson's disease or dementia comes with a bill attached. Liberal Democrats are clear and unequivocal about our commitment to making personal care free on the basis of an assessment of need.
  Mr. Rammell: If the commitment is clear and unequivocal, why does the Liberal Democrat alternative Budget for 2000 include only a costed commitment to pay immediately for nursing care?
  Mr. Burstow: If the hon. Gentleman had read on, he would have realised that we are also committed to funding all personal care. It is clearly stated in the same document. During our previous debate on the subject, the hon. Gentleman did not have a copy of the alternative Budget. I am glad that he now has it. He can read that it goes on to refer to a first step towards implementing the royal commission's proposals for free personal care.
  Mr. Rammell: Will the hon. Gentleman give way?
  Mr. Burstow: I shall not give way because I have answered the hon. Gentleman's point. The royal commission's recommendations are also clear. It was right to recommend that personal care should be free.
  With chronic health conditions, it is difficult to predict or anticipate the way in which the risk will fall on an individual, and whether someone will need long-term care. Consequently, the costs fall disproportionately on a few people. We believe that the costs of long-term care should be spread across the whole community and ultimately met through taxation. The royal commission also took that view after undertaking the inquiry that the Government requested to ascertain the way in which we can construct a fair, effective and sustainable system for financing long-term care. Unfortunately, the Government chose to miss the opportunity of accepting the royal commission's proposals. Instead, they plumped for short-term fix. We have had what could be described as an adjournment of the debate on long-term care. The Government will return to it because they must do that.
  Dr. Jenny Tonge: Does not my hon. Friend agree that the Government discriminate against

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  people who are mentally ill through their policies on long-term care, which affect sufferers of Alzheimer's disease and Parkinson's disease, which becomes a mental illness? That is grossly unfair.
  Mr. Burstow: My hon. Friend is right about such discrimination. Their policies are also another form of age discrimination. It means that many people, who rightly expect that their nursing and personal care costs would be covered if they suffered from a chronic condition such as dementia, know that nothing will change as a result of the NHS plan. The Government's announcement will leave in place the postcode lottery of care that existed under the Conservatives for years. It will create new anomalies when the new definition of nursing care is interpreted.
  The NHS plan leaves in place the perverse incentives that encourage local authorities to utilise residential care rather than help older people who remain in their homes. It leaves unanswered a fundamental question: where does the balance lie between an individual's personal responsibility and that of the state for meeting care costs? The Government have not provided a clear answer to that. They have put the matter into a siding, but they will have to return to it, and answer that question clearly and definitively.
  As the hon. Member for Beckenham (Mrs. Lait) said, reports in The Sunday Times at the weekend, and in the Daily Mail today, describe the way in which the Scottish Executive will view long-term care. If those reports are correct, the Government will be put under a spotlight to explain why they have followed one road while the Scottish Executive have gone down another. The Scottish Executive appear set to go further than the Government. The new First Minister, the hon. Member for Central Fife (Mr. McLeish), is reported as saying that not only nursing care, but personal care should be free.
  In The Sunday Times, the First Minister is quoted as saying:
  If you are rooted in public concern then you will know that if every organisation you talk to, every medical group, every local authority, the Sutherland people themselves, the PLP, the Liberal group—
  I believe that he means the Liberal Democrats—
  the opposition are all agreed, then sometimes you just have to say to yourselves: "Well, look. There is a firm body of opinion. Is what we have as a policy the right thing to do?"
  Clearly, the First Minister believed that the Government of Scotland had not adopted the right policy by embracing the Westminster Government's policy of covering nursing care only. I welcome that decision, which is a step in the right direction. I hope that we, along with all the organisations in England and Wales that want the same policy as Scotland, can persuade the Government to provide it.
  There has been no action on the matter during the whole Parliament. Plenty of debate has taken place, and the Government have often refused to set out their clear policy intent. They set up a royal commission within six months of the general election and we had to wait a year for it to report. That is unusually quick for a royal commission, and we welcomed that. Another 18 months passed before the Secretary of State told us at the Dispatch Box that he had to consider the report for another six months. In June or July, smuggled out under cover of the NHS plan, we received the extremely bad news that nothing would be done in this Parliament.
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  As my hon. Friend the Member for Northavon (Mr. Webb) spelled out, pensioners feel betrayed not only in the case of long-term care. There is genuine anger about the pension. I have met many of my older constituents, who feel insulted by the 75p increase in the basic state pension this year. Labour has presided over an increase in pensioner poverty—400,000 more pensioners live in poverty today than when the Government took office. The Government spend less of the national income on pensions now than when they took office—they have spent less in the first four years of the Parliament. The Minister may have wriggled at the Dispatch Box, but relying on future figures is not helpful and does not bear close scrutiny. When we consider the true figures for Government spending in their first four years in office, we realise that the prosperity of the nation is not being shared.
  If Labour has made matters worse, the Conservatives are not the solution. Let us consider how much their pensions policy will cost. The hon. Member for Beckenham did an exercise to try to cost our policy. She needed only to read Hansard, which makes it clear that our policy will cost considerably less than the figures that she chose to peddle to the House. The Conservatives would scrap the winter allowance and the free television licence for the over-75s, and they would end the Christmas bonus.
  What extra money would pensioners receive through Conservative pensions policy? My hon. Friend the Member for Northavon was generous; he said that they would receive 42p extra. However, the inflation increase of £2.25 would mean that pensioners would receive only 17p extra.
  Mrs. Lait: Will the hon. Gentleman deny that, last Tuesday, he said that he wanted the basic state pension to be £90 for a single person and £135 for a couple? Will he also deny that the net cost of that could he 2.3p on the basic rate of income tax?
  Mr. Burstow: I have the relevant copy of Hansard, and I urge the hon. Lady to read my speech, her speech and the interventions before she pursues that line of argument. The construction that she placed on my words—although I am happy to accept it—does not entirely reflect what I said. I was referring to the family budget unit's work on low cost, affordable pensions. The unit suggested two figures: £90 for a single person and £135 for couples. I said that we wanted to establish a commission to review the way in which pensions are increased year on year, and that the family budget unit's methodology should be considered as part of the commission's work.
  Mr. Bercow: Will the hon. Gentleman give way?
  Mr. Burstow: No, I have dealt with the hon. Lady's question clearly for the third or fourth time. She asked me similar questions during last Tuesday's debate.
  As my hon. Friend the Member for Northavon rightly said, the Conservatives' proposal is the first case on record of robbing Peter to pay Peter. They would be taking money from pensioners and giving it back to them. We shall hear a great deal about pensions this week because of the pre-Budget statement, and those who consider the debate and the issues should carefully

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  examine Conservative proposals and not take them at face value. They should look carefully at the contents of their pockets before accepting any pension proposals from the Conservatives. I think that they will find that they would be well and truly short changed.
  That is hardly surprising when we consider the record of the Conservatives over the 18 years they were in office. It is undoubtedly true that the richest of our pensioners, who are a small minority of pensioners, enjoyed significant increases in their pensions. The poorest pensioners saw their incomes rise by only £10 a week. After 18 years of Tory rule, pensioners had only £10 to show for it. That was the consequence of a Conservative policy which was all about targeting extra help on the rich rather than doing something to help the poorest pensioners.
  We are clear that the most effective way of getting extra help to pensioners is through the basic state pension. It is the most administratively cost-effective way of targeting extra help.
  Mr. Bercow: Will the hon. Gentleman give way on that point?
  Mr. Burstow: On the effective targeting of extra help?
  Mr. Bercow: Yes. Given that the Liberal Democrats June 2000 policy document proposed a restoration of the earnings link, that their party conference took a different view and that the hon. Gentleman and his right hon. and hon. Friends were veritably at sixes and sevens on the subject, with no coherent overall position, will he now remove the fog of confusion that is descending?
  Mr. Burstow: The hon. Gentleman intervened on a specific point and then moved on to another. He should draw out the document from the Library and read it. It does not state anything to do with the earnings link. An amendment to that effect was moved from the floor of the conference.
  Mr. Bercow: I studied reports of the debates and the votes.
  Mr. Burstow: The hon. Gentleman obviously blanked out during that part of the conference. He should check his facts. Central office briefing was completely wrong.
  The most effective way of getting extra help to pensioners is through the basic pension. Administrative costs are about 6 per cent. of expenditure if there is targeting through a means test. They are about 0.9 per cent. if we proceed through the basic state pension. The Minister has accepted that it is far more costly to use a means test to get extra help to the poorest. As my hon. Friend the Member for Northavon rightly said, the poorest pensioners do not get the help because they are the ones who do not claim the minimum income guarantee.
  As there is such a strong and clear link between poverty and old age, targeting extra help to pensioners aged 75 and 80 is the right way forward. We all know that at the age of 80 pensioners receive an extra 25p. That is not enough to buy a first-class stamp to send it back. When the increase was introduced in 1971, it was worth something.
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  Liberal Democrats want to increase the extra payment to £15 for a single pensioner and to £28 for a pensioner couple. The hon. Member for Bournemouth, West (Mr. Butterfill) says that our proposals cannot be afforded and cannot be implemented. We say that they can be afforded and delivered. There is clear evidence of a willingness outside the House to ensure that the basic state pension is increased. Even the evidence from the Department of Social Security bears that out. It is clear from social security research report 83 that the Department found from its research work that even people in work were prepared to pay enough to enable an extra £10, £20 or £30 a week to be paid through the basic state pension.
  My hon. Friend the Member for Northavon has been chastised for not sticking to some of the commitments set out in the Liberal Democrat manifesto in 1997. I find it odd to be chastised for doing not less but wanting to be more ambitious and wanting to do more for our pensioners. It is rather novel to be challenged and chastised by the Government for taking such an approach.
  The Prime Minister says that he has got the message about the 75p increase. On Wednesday, the Chancellor of the Exchequer should say clearly and effectively whether he understood the message. We believe, along with people outside the House, that a decent pension increase is long overdue. Too many years have passed during which we have seen the basic state pension wither away. It is time that we reversed that long-term decline and invested for a decent basic pension.
  6.4 pm
  Mr. Paul Flynn: During the 10 years of miserable opposition that I suffered, along with my right hon. and hon. Friends, we dreamed about the day when we would reform the pension system on the lines that we preached throughout those 10 years. Indeed, they have been preached during the party's entire history. We said that we would rebuild the pension on the basis of the national insurance principle. I shall say many things in opposition to the Government's policy, but I shall do so with the support of my party's history, my party's present policy as decided at the most recent conference and the approval of two marvellous reports by no fewer than three Select Committees since June, and knowing that we are talking about a policy that has worked brilliantly.
  We can go to our constituencies and say that there is a Labour good-news story on pensions. We have provided a good £6 billion more than the Conservatives would have made available if they had been re-elected. I do not understand how the perception of our policies is so badly wrong. Many pensioners believe that we have been mean with pensions. The fault is ours. It cannot be said that what has happened was not predicted. It was predicted in early-day motion 1 this year. Over the previous four years, pleas have been made, with the backing now of 106 Members, to restore the earnings link and start to ensure that the basic pension has a strengthened foundation, not a crumbling one.
  To his great credit, the Welsh Liberal, David Lloyd George, introduced the national insurance scheme in 1911. There were moves before that to introduce such a scheme. However, it determined how we would organise our welfare benefit throughout almost the entirety of the 20th century. The 19th century was marked by the

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  poor law. It was thought that the way to distribute welfare was to give it to the poor, tapping them on their grey heads and saying, "There is a little handout for you."
  It is extraordinary that we appear to be reverting to the principle of the poor law in Government policy. It has been said that there is a young person's view of these matters, and that may lie behind what is happening. When we were in opposition, and especially during the final years, we said that 1 million of the poorest pensioners would he our first priority. They were getting basic pensions and not what we call the minimum income guarantee.
  There is nothing new about MIG. It was around 60 years ago, and it existed throughout the life of income support, supplementary benefit and national assistance. It has always been possible for those whose pensions were not at a level that was deemed reasonable to obtain extra money. It was the handout, the charity or the gift from Government. The number of our poorest pensioners has been reduced to 876,000, and we are now talking about 500,000. They are living below a level that the Government have described as the minimum income guarantee.
  The Opposition spokesperson, the hon. Member for Beckenham (Mrs. Lait), talked about the take-up of the scheme, which arrived two years late—the Government had been begged to introduce it a long time before. Take-up is disappointing. At the most, it is about 5 per cent., but it is probably about 3 per cent., which is tiny. Why is that the position? I suggest to my right hon. Friend the Minister that he should talk to pensioners. Many pensioners worked throughout their working life, paid all their dues and never claimed any dole or any benefit. That is a matter of great pride for them. When they reach the age of retirement, they are told that if they are to get the amount of money that the Government regard as the minimum that they should receive, they will have to complete a very long and complex form and ask for a handout. That is the difference between what the Government Front-Bench spokesmen are saying and what 85 Labour Members have said and have not resiled from in early-day motion 1. They want the extra amount put on the basic pension, so that it is an entitlement that pensioners can accept with dignity and pride. They do not want it to be a demeaning amount that pensioners have to claim through the income support scheme. The difference is crucial. It is difficult to see why that is not understood by the Government. Investigations have been made throughout this long period into why people entitled to the minimum income guarantee are not receiving it. The evidence shows that pensioners find the scheme demeaning, although it has not been published in great detail.
  The majority of pensioners, including those who will come to Parliament tomorrow, want a promise that no party is making to them, which is that in their retirement they will have an increase in their pensions equivalent to the real rate of inflation. That is not a great deal to ask. Is it affordable? I agree with the hon. Member for Bournemouth, West (Mr. Butterfill) about compulsory pension schemes.
  It is not just today's pensioners who face these problems. People in their 40s and 50s who were mis-sold personal pensions will get a terrible shock when they reach retirement age and go into the world of annuities. Annuity rates dropped in value by 30 per cent. from the 1990–94
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  projections. That is a huge drop. Some of my constituents believed that their total fund was the annual amount that they would receive in their personal pensions, and they had organised their lives accordingly. People understand well their occupational pensions, but few understand the personal pensions that they were wickedly mis-sold.
  Millions of young people will be in even greater trouble if we allow the basic pension to wither on the vine. Those not in work will be in terrible trouble, but so will those not paying into any occupational scheme. The hon. Member for Bournemouth, West spoke against the policy of his own party. The most dangerous thing about the Government's policy is that it attacks the principle of the basic pension. If on some dark day in the future there were a change of Government, they would have an open invitation to destroy the basic pension. The Opposition already have a policy of allowing young people to pull out of it.
  We all know the attitude of staff to pensions. They have almost to be nailed to the desk to get them to contribute to pension schemes that are freely given, which require a contribution of 10 per cent. of their salaries. It is difficult to persuade them that they are not immortal and that one day they will grow old and need that pension. They do not want to contribute during the early, furniture-buying, child-rearing days of marriage. In their 40s and 50s, they will have to pay 15 or 20 per cent. of their income on a pension. If the state pension goes, they will receive a derisory pension. That is an important point.
  I want to consider the intellectual poverty of the Government's position on pensions. Since June, there have been reports from three Select Committees, which are not manned or womanned by people who present a challenging view for the Government. I have just discussed that with my hon. Friend the Member for Islington, North (Mr. Corbyn). We have been told in clear terms that we will never be allowed to serve on a Select Committee, certainly not the Select Committee on Social Security. The Government trust members of Select Committees to be loyal to them. I would love to read the Government's response to the splendid report of the Social Security Committee on "The Contributory Principle", which says that the Government's preference for means-testing
  involves a rejection of the wider functions which the contributory system offers, of allowing individuals, whatever their means, to redistribute income over their lifetime.
  The whole point of national insurance is to provide help in certain periods of our lives: when we are very young, in the early days of marriage and when we are old. If we have paid into an insurance fund during that period when we can afford to do so, we can have money out at other times. Every party accepts that principle for child benefit, which enjoys almost 100 per cent. take-up. Why? Because there is no stigma attached to it, everyone can receive it and it is entirely untargeted. It is a very popular benefit.
  The report from the Select Committee on Scottish Affairs on "Poverty in Scotland" said:
  fundamentally we believe that the basis for support in old age should be the universal state pension, payable at the age of retirement. The state pension should be linked to the increase in average earnings.
  The Social Security Committee report on "Pensioner Poverty" referred to the aims set out in the 1998 pensions Green Paper. It said that
  people who work all their lives should not have to rely on means-tested benefits when they retire.

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  It went on to say that
  the Government's long-term aim of enabling working people to retire on incomes which will not require them to depend on a means-test, will be realised.
  All those reports are detailed and thorough. They were the result of months of work by the various Committee. Not one of them supports the stubborn, doctrinaire line taken by the Government, which is contrary to the opinion of the Labour party and is difficult to sell to pensioners.
  We know that the Government intend to allocate a large amount of money to pensioners. However, after the Budget, the £150 allowance and the policy behind it met a growing feeling of rejection. I went to a meeting of a pensioners' group, and the morning papers were saying that the Chancellor would be popular with pensioners. He was not. Feelings about that larger lump sum were similar to those that people had in the early years of trade unions when rogue employers cheated their workers every week by paying them low wages and then tried to buy back their favour by giving them a turkey for Christmas. The effect of being given a turkey was much greater than being cheated out of £5 a week in their wages. It was a gimmick. When the 75p increase was announced, those pensioners were very angry about it.
  Liberal Democrat and Labour Members have expended much energy trying to find out the amount of the national insurance fund. That information is crucial to debates on pensions. Last November, there was a surplus of £8.43 billion. That money belongs principally to pensioners. This and previous Governments have raided the national insurance fund to reduce contributions to employees. Employees have a claim on some of that money, but large sums have been used for that purpose.
  The stable employment situation, with the lowest unemployment rate for 20 years, and the Government's other great achievements have ensured that the national insurance fund contains an even bigger sum. That £8.43 billion was not the balance of the fund: it was the unneeded surplus. There was already enough money in the fund for contingencies, as the law states that there should be. Increases in unemployment could have been dealt with using the contingency fund, and there would still have been £8.4 billion available. An increase in the basic pension of £1 a week would cost about £500 million. No one is asking for an unreasonable increase for pensioners to bring pensions up to what they would have been had those pensioners not been cheated by the Tory Government every year between 1980 and 1997. We know that that is not possible: it would be very difficult to achieve.
  We argue, however, that increases are affordable. They are just, and they are the best way to reward pensioners for the contributions that they have made. The Treasury supplement was paid for years. Real money went into the scheme. Pensioners who have worked all their lives and have contributed through their insurance contributions and through the Treasury supplement now have to beg for charity and take handouts to get a pension. Increasing the MIG to £90 may provide extra money, but instead of the current one in five persons on means-tested benefits there will be more of them—if the present trend continues that number will increase to one in four by 2050. We cannot say to a whole generation that they must rely on means-tested benefits.
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  I appeal to the Government to re-examine their policies. Those policies are deeply unfair, although the Government's heart is in the right place. Their spending is generous, but they are corrupting what has been one of the Labour party's great achievements over the past 100 years: supporting the principle of national insurance. Not only is a large increase fair, affordable and overdue; it should be possible to make that increase now, and it should be announced on Wednesday. There is no excuse for any other action.
  6.20 pm
  Mr. Patrick Nicholls: It is a pleasure to follow the hon. Member for Newport, West (Mr. Flynn), who speaks about these matters with great passion and knowledge. I thought I would be able to agree with him to an extent that would embarrass us both, but I am happy to say that in a moment I shall be able to resume normal hostilities.
  The hon. Gentleman was right to talk about the restoration of the pensions link, a theme that has run through the debate. Certainly, out in the country there is a feeling that—if I may use the phrase employed by the hon. Gentleman a few moments ago—the Conservative Government cheated in 1980 by withdrawing the link with earnings, and that although the present Government would like to restore it now, they cannot for some reason. The Government seem to be trying to have it both ways: they are blaming us for taking away the earnings link, and are trying to achieve vicarious credit by saying that they would of course restore it, but cannot quite get around to doing so.
  The history is instructive. Under the National Insurance Act 1974, Labour linked the retirement pension to the rise in earnings. I think that it was honouring an election pledge, and many people greeted the move with joy. The difficulty is that it is one thing to introduce legislation, and another to implement it. In 1976, pensions were raised by less than income or earnings. In that year, the Labour Government did not implement their own legislation. Then came the uprating for November 1977, when the link did not apply, because earnings had risen faster than prices, and earnings had risen faster in any event.
  The real crunch for the Labour party came in the uprating statement of November 1978. Labour raised pensions by 11.4 per cent., but earnings had risen by 13.3 per cent. Labour then proposed an uprating that it was not in a position to implement, because it lost the election. That is nevertheless relevant to the point that I am about to make.
  In March 1979, it was proposed that pensions should rise by 12.8 per cent. At the time, earnings were rising by something in excess of 15 per cent. That caused outrage among pensioners, many of whom had doubtless voted Labour and seen legislation passed, and now saw their own fluffy Labour Government and their own Secretary of State avoiding their own legislation.
  Trying to square the circle and work out how such an extraordinary thing had happened—extraordinary, that is, to those who had not followed the track record of previous Labour Governments—Lord Ennals, then Secretary of State for Social Services, wrote in Pensioners Voice something that, even in a cynical profession, comes across as cringe-making. He wrote:
  There is a statutory obligation to take these figures (i.e., earnings) into account, which was done, but no statutory obligation to get it right—

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  a Government who introduce legislation then cynically refuse to implement it.
  The Conservative Government did not, in some cloak-and-dagger or hole-in-the-corner way, repeal the link; they said in their 1979 election campaign that they would remove the link, because at the time it was unsustainable. Lord Jenkin of Roding, as he then was not—he was then Secretary of State for Social Services—explained why it was unsustainable, given the state of the economy at the time. I shall say more about that shortly. He went on to say that the rise in pensions would be linked to the rise in prices instead, because that was
  a more realistic, a more honest and, above all, a more sustainable, prospectus.—[Official Report, 20 December 1979; Vol. 976, c. 903.]
  What has happened with the earnings link has passed into mythology. A Labour Government campaigned to introduce it, refused to implement their own legislation, and cynically sneered that all they were obliged to do was take the figures into account—they did not have to get it right. A Conservative Opposition and, in due course, a Conservative Government campaigned on the basis that those figures were simply unsustainable, and that it was better in the long run to promise something to pensioners that was sustainable.
  Mr. Rooker: Will the hon. Gentleman give way?
  Mr. Nicholls: I would adore to give way to the Minister, so that I can share his embarrassment.
  Mr. Rooker: There is no embarrassment. The hon. Gentleman has gone over the history of what happened during those four years and I do not dissent from any of what he has said, but he has neglected to draw attention to something that was fundamentally wrong. I refer to the attempts to forecast earnings and prices six months in advance. Ministers were coming to the Dispatch Box in March announcing what they thought earnings and prices would be in November, and stating what the pension would be. The forecasts were wrong, and it was necessary to return to an historical system.
  There were inbuilt errors in the design of the system. I complained at the time, as did others. There was no precision in the attempts to forecast what would happen in six months' time, which is why we have an historical system today.
  Mr. Nicholls: There is something glorious about the Minister. I always enjoy my exchanges with him.
  As the Minister well knows, under the Labour Government in those days it was impossible to forecast rises in prices or earnings in terms of more than a few weeks, because the economy was completely out of control. At that time—the last time that the Minister was involved in an alliance, a Lib-Lab pact—it was impossible to forecast what would happen from week to week. At that time, the country was so bankrupt that when Lord Healey was going overseas he had to turn his car around on the way to Heathrow, because the International Monetary Fund had said that it would withdraw the country's credit and make it bankrupt.
  In 1979 our economy was a thoroughgoing basket case, and it was certainly true at the time that the earnings link was unsustainable. We are now in a vastly different world. We now have an excellent economy, bequeathed by a
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  Conservative Government who had learned from the mistakes of their predecessors. Although the economy will slow down as stealth taxes begin to bite, the present Government have not yet wrecked the economy that they were bequeathed. As it is a strong economy, I think it fair to consider whether the earnings link could be restored in some shape or form.
  I say that without for a moment making light of the figures that would be involved. I understand that if the earnings link were restored for this year, it would cost £1 billion, and that by 2010 it would amount to £8 billion. Those are substantial sums, even if we allow for the amount that the Government have stored up to give back to those from whom they took it forcibly in the first place to persuade them to vote Labour next May, and even judged by the sums that are in reserve.
  But—it is an important but—this is a vastly different world from that of 1979. Although all three parties have, in a sense, followed the historic and traditional view that the earnings link is unsustainable, I think it fair to ask whether there is something in it that we should try to revive or retrieve.
  I think it comes down to this. I think that Members on both sides of the House always see such action as a sticking plaster. One thing that unites the hon. Member for Newport, West and me is our wish to see something done for pensioners that is better than what has been done for them by either of the last two Administrations. That much is clear; but we must also ask what is the underlying, and overriding, consideration.
  When we talk of the earnings link, we are not just trying to outbid each other. We are saying that we want the elderly, who have played their part in producing the economy we have today, to be able to benefit in the future. That is the core of what we are trying to achieve, and I should have thought it was possible. I do not know whether it will be necessary to define it in relation to gross domestic product, but it should be possible to state the aspiration in regard to an earnings link, while ensuring the existence of mechanisms to deal with any substantial downturn in the economy without the need to refuse to implement legislation that we have ourselves passed.
  I think that a debate on that should take place in my party, and I think it would be healthy for it to take place in all three principal parties. I should like it to be acknowledged that, although such action was indeed unsustainable in the world of 1979, we should now ask—given the present state of the economy—how pensioners can have a stake in rising prosperity, while not ultimately saddling taxpayers with burdens that they cannot afford.
  The hon. Member for Hastings and Rye (Mr. Foster) made an offer, but I do not know whether he is prepared to come down to my constituency on his holiday and keep his promise. He offered to give a cheque to anyone who, in a public meeting, could honestly say that, as a pensioner, he or she was worse off under the present Government. I hope that the hon. Gentleman has his cheque book ready, as the first person to whom he must send a cheque is Mr. Allen Bridges of Shaldon in Devon. Mr. Bridges wrote to the Prime Minister about the interesting matter of the financial burdens of partially sighted people and concluded his letter by saying:
  But no matter, I have my 75p increase plus my 75p "over 80" gift and to cap it all, £100 fuel allowance. Minus £97 tax credit loss, this then equals £3 for fuel plus increase plus age allowance. It makes the mafia appear as Fairy Godmothers.

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  I am sure that a cheque should be made out to Mr. Bridges, which is spelt with one "d".
  I have dozens of such letters, which are completely unsolicited. If time allowed I would read them all, but I shall read out just one from Mr. Howell, again from Shaldon, who, I am sure, would also appreciate a cheque from the hon. Member for Hastings and Rye. Mr. Howell writes:
  Dear Mr. Nicholls,
  My wife is 77 years of age and is registered disabled; I submit her tax return to the Inland Revenue each year.
  I am enclosing photostat copies of statements for the tax years ending April 1999 and April 2000 which reveal a substantial drop in income due to the changes made by the Chancellor … respect of the taxation of dividends.
  Throughout her working life my wife endeavoured to save, out of taxed income, in order that she would not become a burden on the State. The Government boast that they have kept their promise not to increase basic rates of tax but are careful not to mention the many significant increases in indirect taxes.
  There are, most probably, large numbers of pensioners who have been affected similarly and I hope that protest continues to be voiced in … Parliament and the media.
  Mr. Howell then sets out figures that have been accepted by the Inland Revenue, so there is no doubt about them. Mr. Howell says that for the year 1996–97 his gross income was £5,220 and his tax refund was £601—I shall leave out the pence for the sake of brevity. In 1997–98, his gross income was £6,853 and his tax refund was £619. In 1998–99, his gross income was £5,345 and his tax refund was £588. In 1999–2000, his gross income was £5,062 and his tax refund was £10.66. Mr. Howell concludes in irony, I assume, rather than sorrow:
  I had thought that the Government were encouraging people to save for their later years!!
  We must be straight about the matter.
  Mr. Rooker: Will the hon. Gentleman give way?
  Mr. Nicholls: I shall give way to the Minister who is marvellous and reminds me of the late Brian London. Boxing fans will know that that was not meant to be a compliment.
  Mr. Rooker: I would like more information, as the hon. Gentleman has just quoted the figures for a tax refund for a gross income of £5,000. The basic pension for a couple is £107 a week and the minimum income guarantee is £121 so, because of the tax allowances, other income must be involved. In that situation, there would not be a tax liability. The hon. Gentleman should not kid the House that the couple's gross income is their only income. He cannot be giving the House the full information.
  Mr. Nicholls: I am giving the House the full information, and it says something about the right hon. Gentleman, whom I respect, that he is embarrassed by what he has heard. I will send the right hon. Gentleman the information, which is news to no one on this side of the House. I accept that the matter is not entirely within his brief, as it is more of a Treasury brief. However, if he understood the effect of advance corporation tax on
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  pensioner income, he would not be in the least surprised by the outcome. I shall send him the papers without any difficulty at all.
  Mr. Bercow: As my hon. Friend is helpfully providing the House with a list, perhaps he would be so kind and generous as to add to it one of my own constituents, Mrs. Jones-Williams of Seven Gables, Buckingham Road, Winslow, whose husband is registered blind and who is trying to maintain a car. Mrs. Jones-Williams has suffered from the Government's ACT policy and assures me that she has been impoverished by this benighted Administration and wants them out of office yesterday.
  Mr. Nicholls: There are dozens of examples of the way in which ACT has worked. The two examples that I mentioned simply made the point that the hon. Member for Hastings and Rye was wrong.
  A moment or two ago, I said that, to some extent, given the figures we were discussing, we were almost swapping offers. We need to go much further than that, and a different approach should be considered by all the main political parties.
  There is now a third age, and people live immeasurably longer than ever before. In 1909, which, give or take, was the time when Lloyd George introduced the first state retirement pension, average life expectancy was 45 years for men and 49 years for women. In other words, the state pension was paid 15 years after the actuarial calculation of one's death. Give or take a few years for the time that I was born, the figures for 1951 show that men's life expectancy was 66 years and women's life expectancy was 71 years. For a male born today, life expectancy is 75 years and, for a woman, 80 years. I have checked with the Library the proposition that once one takes out of those figures the fact that mortality in the early years is still relatively high, it is true that someone born today has every expectation of living well into his or her nineties. When the state retirement pension was introduced, it came into effect 15 years after one was expected to die. With a bit of luck, one will now live for a good 25 years after first receiving one's pension.
  Mr. Butterfill: Will my hon. Friend give way?
  Mr. Nicholls: If my hon. Friend will allow me, I shall continue as time is short.
  We must draw the conclusion that we have the opportunity of a third age. We need a bigger idea, and Her Majesty's Government—it does not matter of which political party—should accept that we have moved on so much that we need a Ministry of the third age. We need an overriding, all-embracing Ministry that considers pensions policy, employment policy and health policy. It should also think about recreation policy, taxation and health care. Old age need not be undignified.
  The Secretary of State for Northern Ireland wants pensioners to be branded because he thinks that being old is uncool. The hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Soley), who is chairman of the parliamentary Labour party, said that there is no point in trying to appeal to pensioners, as they are either racist or Conservative. The first notion is a slur and the second is not necessarily always true. However, we all aspire to a dignified old age and to have time during the third age

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  for opportunities that people of our parents' and grandparents' generation would scarcely have believed. If there was a Secretary of State in the Cabinet who was charged with considering the entirety of what it is like in the third age, we really could make progress. Until then, progress must be relatively slight.
  6.37 pm
  Mr. Bill Rammell: In the three minutes available to me, I shall attempt to do justice to the proposition on the Order Paper. I shall make three short points, the first of which concerns the consistency of Liberal Democrat Members. If we go back to their 1997 manifesto, they were in favour of raising pensions only in line with prices. In the vote in the House in April, they committed themselves to restoring the link between pensions and earnings. Liberal Democrats campaigned on that issue in the local elections and, in my constituency of Harlow, put leaflets through the doors that made it clear that their policy was to restore the link between pensions and earnings. In the vote at the Liberal Democrat conference in September, the link between pensions and earnings was explicitly rejected.
  That is a bewildering set of somersaults on policy, the end result of which, certainly in my constituency, is that Liberal Democrats refuse to admit that originally they were in favour of restoring the link between pensions and earnings. People expect from politicians a degree of consistency on the issue which, sadly, the Liberal Democrats lack.
  I shall pick up on two other points made by Liberal Democrat Members this afternoon, the first of which concerns long-term care. I shall reiterate the fact that the Liberal Democrats' alternative set of proposals for the 2000 Budget did not include a costed commitment to paying for personal long-term care. Their explicit costed commitment was to pay for nursing care, not personal care. Frankly, that is symptomatic of what we often get from Liberal Democrat Members. They spray promises around like confetti and hope that, in the meantime, nobody will look at the detail or the fine print and find out that there is no costed commitment to implement their proposals. I am committed to progressive taxation to fund decent public services, but the case for that is not bolstered by not being straight with people about where the money will come from.
  Finally, in the short time available, I shall refer to the specific pension proposals that the hon. Member for Northavon (Mr. Webb) spoke about this afternoon. If I heard him correctly, he said that he would fund those proposals by raising the top rate of taxation to 50p in the pound. Only six months ago, the Liberal Democrats' alternative Budget for 2000 proposed raising the top rate of taxation to pay for cutting the 10p starting rate to zero. Therefore, in six months, the specific proposal from the Liberal Democrats has been changed for a different purpose. There is no consistency whatever from them on those issues. That is why, in my constituency and elsewhere, no one will believe them.
  6.40 pm
  Mr. Matthew Taylor: The hon. Member for Harlow (Mr. Rammell) talks about consistency and about Liberal Democrat policy changing. I suspect that, on Wednesday, we shall see one of the
  74
  Government's biggest U-turns. They have spent some three years arguing against the principle of above-inflation pension increases. I believe that, because of a campaign by the Liberal Democrats—with the support of many Labour Back Benchers—but, above all, by pensioners, despite having no support from Ministers or from the Conservative party, which did not accept the argument, the case for above-inflation increases, resulting in a substantial pension increase, will prove to have been won.
  That is a measure of the mistake that the Chancellor made at the start of the Parliament in taking pensioners for granted and in forcing them into increased means-testing. It is a measure of the effectiveness of a public revolt that has had nothing like the attention of the fuel tax protests, but will prove to have been more effective.
  In constituency after constituency throughout the country, pensioners have taken up the case for a decent income, on which they can survive, as of right. That was the basis of the speech by my hon. Friend the Member for Northavon (Mr. Webb), probably the most expert person in the House on the issue; he is certainly one of the most expert.
  In those terms, I regret the tone of the Minister's response. Many years ago, I served with him on the Committee that dealt with the poll tax. He did an effective job; I think that we did quite an effective opposition job between us. The poll tax certainly did not last long. I have always had great admiration for him, but he misjudged his response and he was wrong in his criticisms.
  The figures that the Minister gave were, to say the least, misleading. He did not let me intervene at the time. Had he done so, I could have put him right, so it is sad that he did not. The fact is that the Government will call a general election—we will see whether they get back—and leave office spending less on pensions as a proportion of national wealth than when they came in. They will be doing worse on the state pension than the Conservatives.
  The figures that the Minister sought to give related to overall expenditure on pensioners. That is a different issue, but, even there, the Government's record is nothing to be proud of because the simple fact is that, at this moment, they are still spending less than the Conservatives.
  We know that the Government have jacked up spending for the general election and that they will just, in the Minister's terms—not by much—reach the level that the Conservatives were at when they left office. In the meantime, however, pensioners will have lost out on money that they will never get back.
  The Conservative official spokesperson, the hon. Member for Beckenham (Mrs. Lait), made up a series of figures. The hon. Member for Bournemouth, West (Mr. Butterfill) resorted to saying that he preferred those to ours. She simply got her figures wrong. Perhaps she should call the House of Commons Library. It is very good and it will sort her out on that. She failed to take account of the fact that the costs of our policy are net, not gross. She also underestimated the gross costs of the policy, but her maths are clearly not too good. Broadly speaking, the net costs are equivalent to the income that we raise from the 50 per cent. rate of tax on earnings over £100,000 a year. Some years will bring in more income than we need and others fractionally less, but the figures are almost identical. There is a tie-up there.

  75
  We are clear about why it is necessary to put that tax on: we want to guarantee pensioners our big increases. We could simply hope that the economy delivers continued growth. The evidence is that the Chancellor has more than a big enough pot into which he can dip to make substantial pension increases. I hope that he will take a step towards that on Wednesday, but to guarantee, after a general election, to deliver substantial pension increases, we have to say that that might mean an increase in tax. We believe that it would be right to have a 50 per cent. tax rate on earnings over £100,000 a year, if necessary.
  There are several reasons for that. First, we believe that it is important that pensioners should receive the benefit of the pension increases. Secondly, our tax system is regressive. People on high incomes pay less tax overall as a proportion of their income than those on low incomes. We do not believe that that is right. In tackling what was a real problem—taxation of very high incomes under Labour prior to 1979—previous Conservative Chancellors went too far. That is why very wealthy people now pay less, as a proportion of income, than people on very low incomes—the pensioners on whom we are concentrating. We believe that, if we have to make a tax increase, that is where it should be made. It will still leave this country's high-rate tax one of the lowest in Europe and lower than for most of the period that Margaret Thatcher was Prime Minister.
  Mr. Bercow: Obviously, if the top tax rate is cut, those who pay that rate thenceforward will pay a lower proportion of their income to the Exchequer, but does the hon. Gentleman not accept that, as a consequence of the Lawson tax changes, the proportion of the overall tax-take contributed by the highest earners was higher? I hope that even a Liberal Democrat would acknowledge that point.
  Mr. Taylor: The hon. Gentleman is trying to argue that, if we tax very high earners a little more, we will get less income. I challenge him to find an academic report that backs him. Even the last Conservative Administration—let alone any academic group—undertook their own report on that and failed to find the evidence.
  The hon. Member for Knowsley, South (Mr. O'Hara) made a far more measured speech than the Minister. Not only Liberal Democrat Members, but other Members on both sides of the House would agree with much of what he said. He sought to reflect some of the general concerns, which were echoed by the hon. Member for Newport, West (Mr. Flynn), who has an exceptional record on this issue. He highlighted something that the Minister sought to deny: the Government are holding back key information on their ability to afford increases prior to their announcement.
  The Minister says that we will be given the information after the announcement. That will help us to look at what the Government have done, but it does not help anyone to argue, before the announcement, for a better, more generous decision. Once that announcement has been made, there is no chance of any of us—whether the hon. Member for Newport, West or Liberal Democrat Members—winning the argument this year that the Government have the funds to do more. The decision will already have been made.
  76
  My hon. Friend the Member for Sutton and Cheam (Mr. Burstow) addressed the issue of long-term care. It was not the centre of attention in the debate, but it is an important matter. I have already touched on the accusation of inconsistency by the hon. Member for Harlow. It will be interesting to see whether he says the same of his Chancellor. In both cases, I hope that he will do more than he has previously argued for.
  Let us be clear about long-term care. We made an absolute guarantee to fund nursing care, which the Government would not guarantee. We committed ourselves to work towards funding long-term care, too. That is a difference between Labour and us: it is not that the proposal is not budgeted; it is that Ministers oppose it and we shall work for it. People who are concerned about their elderly relatives selling their houses and having to pay for care should understand where the Liberal Democrats stand and where the Labour party stands.
  Mr. Lembit Öpik: Does my hon. Friend agree that there should also be a rurality consideration? Provision for the elderly sometimes costs more in rural areas, such as mid-Wales, and the Government should take that into consideration in their planning.
  Mr. Taylor: My hon. Friend tempts me, as the hon. Member for Truro and St. Austell, down the route of special offers for rural constituents. There are key issues for rural constituencies, and I hope that Ministers will address them soon in the long-promised but still-not-delivered review of local government expenditure. I have made that argument directly to Ministers.
  Today's debate has very clearly set out three options available to pensioners. Conservative Members are so embarrassed by their true position on pensions that they dare not spell it out. The truth, of course, is that they are committed to the continued whittling away of the state pension as the basis for people's long-term support. The hon. Member for Teignbridge (Mr. Nicholls), to be fair to him, countered by calling for restoration of the earnings link, which he believes would cost £8 billion. I notice that that is the very same sum that Conservative Members have committed themselves not to adding, but to cutting.
  The hon. Member for Bournemouth, West spoke rather more in favour of the position advocated by Conservative Front Benchers—although they will not spell out their position. The truth is that, on the pensions issue, Conservative Members want to have their cake and to eat it. They want to talk about tax cuts, but not about the fact that those can be delivered only by cutting expenditure on pensions and forcing more people into private pension schemes. Nevertheless, they pretend to pensioners that they want a real increase in the state pension.
  One Conservative leaflet after another promises that pensioners would receive a pension increase of more than £5. One has to read the fine-print—as many pensioners do—to discover that the Conservatives would take away pensioners' Christmas bonus, heating allowance and even the 25p age addition that people start receiving at 80. The promise is an insult.
  Mr. Butterfill: Will the hon. Gentleman give way?
  Mr. Taylor: I cannot give way to the hon. Gentleman; I have to get on. People will be able to read his comments for themselves.

  77
  As my hon. Friend the Member for Northavon said, Labour Members are all over the place on the pensions issue. Year after year in this Parliament, Liberal Democrat Members have campaigned for real increases in the state pension. Ministers, however, have said that they cannot agree to those increases, but must target assistance more accurately on those who need it, yet the Government have chosen to provide the heating allowance, which is not only indiscriminate, but not taxed. Pensioners who perhaps could have afforded to do without the allowance are beneficiaries of it. Therefore, Ministers' comments on targeting are absolute nonsense.
  The Government do not want to increase the basic state pension, but are willing to allow it to wither away in the long run. Their long-term plan is to ensure ever more means-tested support and to withdraw support from those who they think can afford to be without it. Although that is a distinct policy, which is not dissimilar from that of the Conservatives, they do not want to talk about it.
  The Government also believe that the arrival, just before Christmas, of a £150 cheque for the heating allowance is more effective politically than adding a few pounds a week to the basic state pension. The 75p increase, however, proved that they misunderstood the situation and got the spin wrong. It led to a revolt, and proved that pensioners care most about being able to feed themselves and to live in dignity week by week.
  Tomorrow, there will be a pensioners' rally at Westminster, attended by pensioners who have supported all of the political parties. They are rising in protest at the way in which the Government have treated them in this Parliament. The Chancellor's attempt on Wednesday to retrieve the situation will be seen for what it is: a response to that campaign as the general election approaches, rather than a genuine commitment to long-term improvement in the basic state pension.
  The Liberal Democrat proposals would ensure substantial increases in the state pension, targeted on those who most need it. If we were making Wednesday's announcement, single pensioners would receive an additional £7.25. Older pensioners and pensioner couples would receive even more, so that pensioner couples over 80 would receive an increase of more than £30 a week. However, we go even further than that.
  Labour Members have asked about our long-term policy. Because we have underwritten our pensions policy with a tax policy to fund it, we can guarantee that we will be able to deliver those increases in addition to those made in the Chancellor's announcement on Wednesday. The difference is that our policies are underwritten and funded by a tax policy that is more progressive than that which the Government are willing to offer. We can fund a pension increase that will take pensioners out of means-testing, rather than forcing them into it, as the Chancellor will do on Wednesday.
  Our policies give pensioners independence and dignity, rather than force them to ask for hand-outs from the state. They also guarantee that pensioners receive the increase, regardless of whether they can find their way through the means-testing jungle that the Government have imposed.
  6.56 pm
  The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): The hon. Member for Truro and St. Austell (Mr. Taylor) was complaining that
  78
  Conservative and Labour Members had been caught electioneering—as if that were a crime—but then went on to do a little electioneering of his own. Much to my surprise, however, he produced figures different from those given earlier by the hon. Member for Northavon (Mr. Webb).
  Undoubtedly, both hon. Members' expenditure will be financed by the same 10p increase in the top tax rate that they announced, and which my hon. Friend the Member for Hastings and Rye (Mr. Foster) pointed out has already been committed elsewhere. Liberal Democrat Members really have to learn that they cannot keep spending the same tax increase over and over again. One may not be able to perceive that fact when in opposition, but one perceives it rather quickly when one gets into government.
  We have had an interesting debate. All the major parties—I include the Liberal Democrats—fought the previous general election on the same basis: that there would be a link between pensions and prices, and that other action would be taken subsequently. I should quote the Liberal Democrats' 1997 manifesto, on which the hon. Member for Northavon was elected to the House. It stated:
  The basic state pension will remain indexed to prices.
  It went on to say a little more about what they might have managed to do had they entered government in 1997. It stated:
  We will create an additional top-up pension for pensioners with incomes below the income support level. This will be indexed to earnings and tapered as outside income increases.
  Does not such provision indexed to earnings describe the minimum income guarantee that the Government have introduced? I am not very sophisticated, but is not tapering that provision as outside income rises another way of describing a means test? I might have it wrong, but I think that that is how the Liberal Democrats' manifesto—on which every Liberal Democrat Member stood—would have been interpreted by those who read the manifestos in the previous general election.
  Mr. Webb: The hon. Lady is obviously easily confused. The inflation figure for next April is £2.25 and I pledged £5 on top of inflation, making the £7.25 mentioned by my hon. Friend the Member for Truro and St. Austell (Mr. Taylor). The taper mentioned in the manifesto would mean a rate of less than the 100 per cent. tax that she applies to pensioners' savings. That would be better than what she has delivered.
  Angela Eagle: I notice that the hon. Gentleman did not address the point about the manifesto, which is on the record. All the Liberal Democrats promised to do is what we have done in government.
  The Conservatives recently produced their pensions policy and, clearly, they also agree only with an increase in terms of prices. However, they would abolish winter fuel payments. They would abolish the Christmas bonus and the free television licences for the over-75s—even though those are arriving as we speak. They would abolish the age addition for the over-80s and, interestingly, the winter fuel payments to men over 60.
  In her speech—which I enjoyed—the hon. Member for Beckenham (Mrs. Lait) asked me why 1 million men aged between 60 and 65 were still waiting for their winter

  79
  fuel payments. What a cheek to ask me that, when the Conservatives have announced that they would abolish the payment.
  Mrs. Lait: Does the Minister agree that the philosophical point is that people want to have their money in their own pockets to spend as they wish, rather than the gimmicks that the Government deliver? They want the dignity and self-respect of spending their own money.
  Angela Eagle: The practical point is that, according to the Saga poll, 75 per cent. of pensioners do not want their winter fuel payments abolished.
  The Tories' "Common Sense for Pensioners" policy would effectively give 42p extra to some people in certain circumstances. That is enough to buy a tin of Campbell's soup—very generous. The Tory document contains some questions and answers. For example:
  What about a man aged 60 to 64 losing his winter fuel payment?
  The answer is:
  We faced a tough choice here … We decided it was more important to increase the state pension. The savings on benefits for this group help to finance better pensions which will, of course, benefit these men within a few years.
  The reality is that men aged between 60 and 65 will not get winter fuel payments when they retire under the Tories.
  Spending as a percentage of gross domestic product has increased and will be greater by April 2001 than when we came to power, as my right hon. Friend the Minister of State made clear. We must remember also that that is a higher percentage of a growing GDP because we have had a successful economy under the Labour Government. The cake is getting bigger and the percentage given to pensioners is also getting bigger. That is before whatever might happen on Wednesday, so part of the Liberal Democrat motion is inaccurate.
  I have had some fun listening to the debate today. The hon. Member for Teignbridge (Mr. Nicholls), who is a doughty fighter—a shock trooper for Thatcherism in his time—gave us a history of the link. He said that it would be a good time to consider restoring the earnings link and that, because the Tories' economic legacy was so good, we could now afford it. What a cheek from the party that abolished the link in the first place. That was opportunism from the hon. Gentleman.
  The hon. Gentleman did not mention the £8 billion cost of restoring the earnings link and said nothing about how his sums would add up—particularly when the shadow Chancellor has already announced £8 billion in tax cuts. We know that the Tories plan £16 billion worth of cuts from our spending plans, yet the hon. Gentleman proposes to spend another £8 billion. I am not sure how much will end up in the national insurance fund when the Tories are through with it. However, there seems to be a lot of billions floating around for people to spend as they think fit.
  This debate has come far too early this week for it to be meaningful. The Government have spent £6.5 billion more on pensioners over this Parliament than would have been spent under Tory spending plans. The key point is that half of that has gone to the poorer pensioners who were in poverty as a result of the Tory legacy. In those 18 years, pensioners' income distribution was stretched. Many pensioners did far better in that period because of
  80
  occupational pensions and the original SERPS. There was a 64 per cent. increase in real terms in pensioners' incomes but, when we look at the details, we see that the income distribution stretched and that there was a huge increase in pensioner inequality. Given the structure of pensioner incomes that we inherited as a result of the Tories' ideology, we had to address pensioner poverty and the bottom end of income distribution first. This is what we have done with the minimum income guarantee.
  There are those who may quibble with the minimum income guarantee, such as my hon. Friend the Member for Newport, West (Mr. Flynn). But I say to them, "Please help pensioners who are eligible for the guarantee to claim it. You can have your own opinion of it but, on average, those who claim successfully are £20 a week better off. Your constituents who are eligible but not claiming will thank you for helping them to make a claim, rather than for rubbishing the system."
  Mr. Simon Hughes: Will the Minister give way?
  Angela Eagle: No, I do not have long enough. I hope that the hon. Gentleman is helping his pensioners to claim the guarantee.
  The key thing this week is the Chancellor's statement on Wednesday. To those who have been making pleas and looking at the structure of expenditure and the Government's record, all I will say is, "Wait for Wednesday to see how we will fulfil our promises to Britain's pensioners."
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 38, Noes 280.

  Division No. 317]

  [7.7 pm

  AYES

  Allan, Richard

  Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

  Ballard, Jackie

  Beith, Rt Hon A J

  Livsey, Richard

  Bell, Martin (Tatton)

  Llwyd, Elfyn

  Brand, Dr Peter

  Maclennan, Rt Hon Robert

  Breed, Colin

  Michie, Mrs Ray (Argyll & Bute)

  Burstow, Paul

  Moore, Michael

  Campbell, Rt Hon Menzies (NE Fife)

  Morgan, Alasdair (Galloway)

  Oaten, Mark

  Chidgey, David

  Öpik, Lembit

  Cotter, Brian

  Rendel, David

  Davey, Edward (Kingston)

  Sanders, Adrian

  Foster, Don (Bath)

  Stunell, Andrew

  George, Andrew (St Ives)

  Taylor, Matthew (Truro)

  Hancock, Mike

  Thomas, Simon (Ceredigion)

  Harris, Dr Evan

  Tonge, Dr Jenny

  Harvey, Nick

  Tyler, Paul

  Heath, David (Somerton & Frome)

  Webb, Steve

  Willis, Phil

  Hughes, Simon (Southwark N)

  Tellers for the Ayes:

  Jones, Nigel (Cheltenham)

  Mr. Tom Brake and

  Keetch, Paul

  Sir Robert Smith.

  NOES

  Adams, Mrs Irene (Paisley N)

  Ashton, Joe

  Ainger, Nick

  Atherton, Ms Candy

  Ainsworth, Robert (Cov'try NF)

  Atkins, Charlotte

  Alexander, Douglas

  Austin, John

  Allen, Graham

  Banks, Tony

  Anderson, Donald (Swansea E)

  Barnes, Harry

  Anderson, Janet (Rossendale)

  Barron, Kevin

  Armstrong, Rt Hon Ms Hilary

  Battle, John

  81

  Beard, Nigel

  Field, Rt Hon Frank

  Beckett, Rt Hon Mrs Margaret

  Fisher, Mark

  Begg, Miss Anne

  Fitzpatrick, Jim

  Bell, Stuart (Middlesbrough)

  Fitzsimons, Mrs Lorna

  Benn, Hilary (Leeds C)

  Flint, Caroline

  Benton, Joe

  Flynn, Paul

  Bermingham, Gerald

  Follett, Barbara

  Berry, Roger

  Foster, Michael Jabez (Hastings)

  Best, Harold

  Foulkes, George

  Betts, Clive

  Fyfe, Maria

  Blackman, Liz

  Gapes, Mike

  Blizzard, Bob

  George, Bruce (Walsall S)

  Boateng, Rt Hon Paul

  Gerrard, Neil

  Bradley, Keith (Withington)

  Gibson, Dr Ian

  Bradley, Peter (The Wrekin)

  Godsiff, Roger

  Bradshaw, Ben

  Goggins, Paul

  Brinton, Mrs Helen

  Golding, Mrs Llin

  Browne, Desmond

  Gordon, Mrs Eileen

  Burden, Richard

  Griffiths, Jane (Reading E)

  Burgon, Colin

  Griffiths, Win (Bridgend)

  Butler, Mrs Christine

  Grocott, Bruce

  Butterfill, John

  Grogan, John

  Campbell, Alan (Tynemouth)

  Hain, Peter

  Campbell, Mrs Anne (C'bridge)

  Hall, Mike (Weaver Vale)

  Campbell, Ronnie (Blyth V)

  Hall, Patrick (Bedford)

  Campbell-Savours, Dale

  Hanson, David

  Casale, Roger

  Healey, John

  Caton, Martin

  Henderson, Doug (Newcastle N)

  Cawsey, Ian

  Henderson, Ivan (Harwich)

  Chaytor, David

  Heppell, John

  Clapham, Michael

  Hill, Keith

  Clark, Rt Hon Dr David (S Shields)

  Hodge, Ms Margaret

  Clark, Paul (Gillingham)

  Hope, Phil

  Clarke, Eric (Midlothian)

  Hopkins, Kelvin

  Clarke, Rt Hon Tom (Coatbridge)

  Howarth, George(Knowsley N)

  Clarke, Tony (Northampton S)

  Howells, Dr Kim

  Clwyd, Ann

  Hoyle, Lindsay

  Coffey, Ms Ann

  Hughes, Ms Beverley (Stretford)

  Coleman, Iain

  Hughes, Kevin (Doncaster N)

  Connarty, Michael

  Humble, Mrs Joan

  Cook, Frank (Stockton N)

  Hurst, Alan

  Cook, Rt Hon Robin (Livingston)

  Hutton, John

  Cooper, Yvette

  Iddon, Dr Brian

  Corbett, Robin

  Illsley, Eric

  Corbyn, Jeremy

  Jackson, Ms Glenda (Hampstead)

  Corston, Jean

  Jackson, Helen (Hillsborough)

  Cousins, Jim

  Jenkins, Brian

  Cranston, Ross

  Johnson, Alan (Hull W & Hessle)

  Cryer, Mrs Ann (Keighley)

  Jones, Rt Hon Barry (Alyn)

  Cryer, John (Hornchurch)

  Jones, Mrs Fiona (Newark)

  Cummings, John

  Jones, Helen (Warrington N)

  Cunningham, Rt Hon Dr Jack (Copeland)

  Jones, Dr Lynne (Selly Oak)

  Jones, Martyn (Clwyd S)

  Cunningham, Jim (Cov'try S)

  Kaufman, Rt Hon Gerald

  Dalyell, Tam

  Keeble, Ms Sally

  Darling, Rt Hon Alistair

  Keen, Alan (Feltham & Heston)

  Davey, Valerie (Bristol W)

  Keen, Ann (Brentford & Isleworth)

  Davidson, Ian

  Kemp, Fraser

  Davies, Rt Hon Denzil (Llanelli)

  Khabra, Piara S

  Davies, Geraint (Croydon C)

  King, Ms Oona (Bethnal Green)

  Davis, Rt Hon Terry (B'ham Hodge H)

  Kingham, Ms Tess

  Ladyman, Dr Stephen

  Dean, Mrs Janet

  Lammy, David

  Denham, John

  Lawrence, Mrs Jackie

  Dobson, Rt Hon Frank

  Laxton, Bob

  Doran, Frank

  Lepper, David

  Dowd, Jim

  Leslie, Christopher

  Drew, David

  Levitt, Tom

  Dunwoody, Mrs Gwyneth

  Liddell, Rt Hon Mrs Helen

  Eagle, Angela (Wallasey)

  Linton, Martin

  Eagle, Maria (L'pool Garston)

  Lloyd, Tony(Manchester C)

  Edwards, Huw

  Love, Andrew

  Efford, Clive

  McAvoy, Thomas

  Ellman, Mrs Louise

  McCabe, Steve

  Ennis, Jeff

  McCafferty, Ms Chris

  Etherington, Bill

  McDonagh, Siobhain

  82

  Macdonald, Calum

  Salter, Martin

  McDonnell, John

  Sarwar, Mohammad

  McIsaac, Shona

  Savidge, Malcolm

  MacShane, Denis

  Sawford, Phil

  McWalter, Tony

  Sedgemore, Brian

  McWilliam, John

  Shaw, Jonathan

  Mahon, Mrs Alice

  Sheerman, Barry

  Mallaber, Judy

  Sheldon, Rt Hon Robert

  Marsden, Gordon (Blackpool S)

  Short, Rt Hon Clare

  Marshall, David (Shettleston)

  Skinner, Dennis

  Marshall, Jim (Leicester S)

  Smith, Rt Hon Andrew (Oxford E)

  Marshall-Andrews, Robert

  Smith, Angela (Basildon)

  Maxton, John

  Smith, Jacqui (Redditch)

  Meale, Alan

  Smith, John (Glamorgan)

  Michael, Rt Hon Alun

  Smith, Llew (Blaenau Gwent)

  Michie, Bill (Shef'ld Heeley)

  Soley, Clive

  Mitchell, Austin

  Southworth, Ms Helen

  Moffatt, Laura

  Squire, Ms Rachel

  Moonie, Dr Lewis

  Starkey, Dr Phyllis

  Moran, Ms Margaret

  Steinberg, Gerry

  Morgan, Ms Julie

  Stevenson, George

  Morley, Elliot

  Stewart, David (Inverness E)

  Morris, Rt Hon Sir John (Aberavon)

  Stewart, Ian (Eccles)

  Strang, Rt Hon Dr Gavin

  Mountford, Kali

  Straw, Rt Hon Jack

  Mullin, Chris

  Stuart, Ms Gisela

  Murphy, Denis (Wansbeck)

  Sutcliffe, Gerry

  Murphy, Jim (Eastwood)

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Naysmith, Dr Doug

  Norris, Dan

  Temple-Morris, Peter

  O'Brien, Bill (Normanton)

  Thomas, Gareth R (Harrow W)

  O'Brien, Mike (N Warks)

  Timms, Stephen

  O'Hara, Eddie

  Tipping, Paddy

  Olner, Bill

  Trickett, Jon

  O'Neill, Martin

  Truswell, Paul

  Organ, Mrs Diana

  Turner, Dr Desmond

  Osborne, Ms Sandra

  Twigg, Derek (Halton)

  Palmer, Dr Nick

  Twigg, Stephen (Enfield)

  Pearson, Ian

  Tynan, Bill

  Pendry, Tom

  Vis, Dr Rudi

  Pickthall, Colin

  Ward, Ms Claire

  Pike, Peter L

  Wareing, Robert N

  Plaskitt, James

  White, Brian

  Pollard, Kerry

  Whitehead, Dr Alan

  Pound, Stephen

  Wicks, Malcolm

  Powell, Sir Raymond

  Williams, Rt Hon Alan (Swansea W)

  Prentice, Ms Bridget (Lewisham E)

  Prosser, Gwyn

  Williams, Alan W (E Carmarthen)

  Quin, Rt Hon Ms Joyce

  Williams, Mrs Betty (Conwy)

  Rammell, Bill

  Winnick, David

  Rapson, Syd

  Winterton, Ms Rosie (Doncaster C)

  Robinson, Geoffrey (Cov'try NW)

  Wood, Mike

  Roche, Mrs Barbara

  Woodward, Shaun

  Rogers, Allan

  Worthington, Tony

  Rooker, Rt Hon Jeff

  Wright, Anthony D (Gt Yarmouth)

  Rooney, Terry

  Wright, Tony (Cannock)

  Ross, Ernie (Dundee W)

  Wyatt, Derek

  Rowlands, Ted

  Ruane, Chris

  Tellers for the Noes:

  Ruddock, Joan

  Mr. Don Touhig and

  Russell, Ms Christine (Chester)

  Mr. David Jamieson.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—
  The House divided: Ayes 266, Noes 81.

  Division No. 318]

  [7.22 pm

  AYES

  Adams, Mrs Irene (Paisley N)

  Allen, Graham

  Ainger, Nick

  Anderson, Donald (Swansea E)

  Ainsworth, Robert (Cov'try NE)

  Anderson, Janet (Rossendale)

  Alexander, Douglas

  Armstrong, Rt Hon Ms Hilary

  83

  Ashton, Joe

  Fitzpatrick, Jim

  Atherton, Ms Candy

  Fitzsimons, Mrs Lorna

  Atkins, Charlotte

  Flint, Caroline

  Austin, John

  Flynn, Paul

  Banks, Tony

  Follett, Barbara

  Barnes, Harry

  Foster, Michael Jabez (Hastings)

  Barron, Kevin

  Foulkes, George

  Battle, John

  Fyfe, Maria

  Beard, Nigel

  Gapes, Mike

  Beckett, Rt Hon Mrs Margaret

  George, Bruce (Walsall S)

  Begg, Miss Anne

  Gerrard, Neil

  Bell, Stuart (Middlesbrough)

  Gibson, Dr Ian

  Benn, Hilary (Leeds C)

  Goggins, Paul

  Benton, Joe

  Golding, Mrs Llin

  Bermingham, Gerald

  Gordon, Mrs Eileen

  Berry, Roger

  Griffiths, Jane (Reading E)

  Best, Harold

  Griffiths, Win (Bridgend)

  Betts, Clive

  Grocott, Bruce

  Blizzard, Bob

  Grogan, John

  Bradley, Keith (Withington)

  Hain, Peter

  Bradley, Peter (The Wrekin)

  Hall, Mike (Weaver Vale)

  Bradshaw, Ben

  Hall, Patrick (Bedford)

  Brinton, Mrs Helen

  Hanson, David

  Browne, Desmond

  Healey, John

  Burden, Richard

  Henderson, Doug (Newcastle N)

  Burgon, Colin

  Henderson, Ivan (Harwich)

  Butler, Mrs Christine

  Heppell, John

  Campbell, Alan (Tynemouth)

  Hill, Keith

  Campbell, Mrs Anne (C'bridge)

  Hodge, Ms Margaret

  Campbell, Ronnie (Blyth V)

  Hope, Phil

  Campbell-Savours, Dale

  Hopkins, Kelvin

  Casale, Roger

  Howarth, George (Knowsley N)

  Caton, Martin

  Howells, Dr Kim

  Cawsey, Ian

  Hoyle, Lindsay

  Chaytor, David

  Hughes, Ms Beverley (Stretford)

  Clapham, Michael

  Hughes, Kevin (Doncaster N)

  Clark, Rt Hon Dr David (S Shields)

  Hurst, Alan

  Clark, Paul (Gillingham)

  Hutton, John

  Clarke, Eric (Midlothian)

  Iddon, Dr Brian

  Clarke, Rt Hon Tom (Coatbridge)

  Illsley, Eric

  Clarke, Tony (Northampton S)

  Jackson, Helen (Hillsborough)

  Clwyd, Ann

  Jenkins, Brian

  Coleman, Iain

  Johnson, Alan (Hull W & Hessle)

  Connarty, Michael

  Jones, Rt Hon Barry (Alyn)

  Cook, Frank (Stockton N)

  Jones, Mrs Fiona (Newark)

  Cook, Rt Hon Robin (Livingston)

  Jones, Helen (Warrington N)

  Cooper, Yvette

  Jones, Martyn (Clwyd S)

  Corbett, Robin

  Kaufman, Rt Hon Gerald

  Corbyn, Jeremy

  Keeble, Ms Sally

  Corston, Jean

  Keen, Alan (Feltham & Heston)

  Cranston, Ross

  Keen, Ann (Brentford & Isleworth)

  Cryer, Mrs Ann (Keighley)

  Kemp, Fraser

  Cryer, John (Hornchurch)

  Khabra, Piara S

  Cummings, John

  King, Ms Oona (Bethnal Green)

  Cunningham, Jim (Cov'try S)

  Kingham, Ms Tess

  Dalyell, Tam

  Ladyman, Dr Stephen

  Davey, Valerie (Bristol W)

  Lammy, David

  Davidson, Ian

  Lawrence, Mrs Jackie

  Davies, Rt Hon Denzil (Llanelli)

  Laxton, Bob

  Davies, Geraint (Croydon C)

  Lepper, David

  Davis, Rt Hon Terry (B'ham Hodge H)

  Leslie, Christopher

  Levitt, Tom

  Dean, Mrs Janet

  Lewis, Terry (Worsley)

  Denham, John

  Liddell, Rt Hon Mrs Helen

  Dobson, Rt Hon Frank

  Linton, Martin

  Doran, Frank

  Lloyd, Tony (Manchester C)

  Dowd, Jim

  Love, Andrew

  Drew, David

  McAvoy, Thomas

  Eagle, Angela (Wallasey)

  McCabe, Steve

  Eagle, Maria (L'pool Garston)

  McCafferty, Ms Chris

  Edwards, Huw

  McDonagh, Siobhain

  Efford, Clive

  Macdonald, Calum

  Ellman, Mrs Louise

  McDonnell, John

  Ennis, Jeff

  McIsaac, Shona

  Etherington, Bill

  MacShane, Denis

  Fisher, Mark

  McWalter, Tony

  84

  McWilliam, John

  Sawford, Phil

  Mahon, Mrs Alice

  Sedgemore, Brian

  Mallaber, Judy

  Shaw, Jonathan

  Marsden, Gordon (Blackpool S)

  Sheerman, Barry

  Marshall, David (Shettleston)

  Sheldon, Rt Hon Robert

  Marshall, Jim (Leicester S)

  Skinner, Dennis

  Marshall-Andrews, Robert

  Smith, Rt Hon Andrew (Oxford E)

  Maxton, John

  Meale, Alan

  Smith, Angela (Basildon)

  Michael, Rt Hon Alun

  Smith, Jacqui (Redditch)

  Michie, Bill (Shef'ld Heeley)

  Smith, John (Glamorgan)

  Moffatt, Laura

  Smith, Llew (Blaenau Gwent)

  Moonie, Dr Lewis

  Soley, Clive

  Moran, Ms Margaret

  Southworth, Ms Helen

  Morgan, Ms Julie (Cardiff N)

  Squire, Ms Rachel

  Morley, Elliot

  Starkey, Dr Phyllis

  Morris, Rt Hon Sir John (Aberavon)

  Steinberg, Gerry

  Stevenson, George

  Mountford, Kali

  Stewart, David (Inverness E)

  Mullin, Chris

  Stewart, Ian (Eccles)

  Murphy, Denis (Wansbeck)

  Strang, Rt Hon Dr Gavin

  Murphy, Jim (Eastwood)

  Straw, Rt Hon Jack

  Naysmith, Dr Doug Norris, Dan

  Stuart, Ms Gisela Sutcliffe, Gerry

  O'Brien, Bill (Normanton)

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  O'Brien, Mike (N Warks)

  O'Hara, Eddie

  Temple-Morris, Peter

  Olner Bill

  Thomas, Gareth R (Harrow W)

  Organ, Mrs Diana

  Timms, Stephen

  Osborne, Ms Sandra

  Tipping, Paddy

  Palmer Dr Nick

  Trickett, Jon

  Pearson, Ian

  Turner, Dr Desmond (Kemptown)

  Pendry, Tom

  Twigg, Derek (Halton)

  Pickthall, Colin

  Twigg, Stephen (Enfield)

  Pike, Peter L

  Tynan, Bill

  Plaskitt, James

  Vis, Dr Rudi

  Pollard, Kerry

  Ward, Ms Claire

  Pound, Stephen

  Wareing, Robert N

  Powell, Sir Raymond

  White, Brian

  Prentice, Ms Bridget (Lewisham E)

  Whitehead, Dr Alan

  Prosser, Gwyn

  Wicks, Malcolm

  Quin, Rt Hon Ms Joyce

  Williams, Rt Hon Alan (Swansea W)

  Radice, Rt Hon Giles

  Rammell, Bill

  Williams, Alan W (E Carmarthen)

  Rapson, Syd

  Williams, Mrs Betty (Conwy)

  Robinson, Geoffrey (Cov'try NW)

  Winnick, David

  Roche, Mrs Barbara

  Winterton, Ms Rosie (Doncaster C)

  Rogers, Allan

  Wood, Mike

  Rooker, Rt Hon Jeff

  Woodward, Shaun

  Ross, Ernie (Dundee W)

  Worthington, Tony

  Rowlands, Ted

  Wright, Anthony D (Gt Yarmouth)

  Ruane, Chris

  Wright, Tony (Cannock)

  Ruddock, Joan

  Wyatt, Derek

  Russell, Ms Christine (Chester)

  Salter, Martin

  Tellers for the Ayes:

  Sarwar, Mohammad

  Mr. Don Touhig and

  Savidge, Malcolm

  Mr. David Jamieson.

  NOES

  Allan, Richard

  Chapman, Sir Sydney (Chipping Barnet)

  Amess, David

  Arbuthnot, Rt Hon James

  Chidgey, David

  Ballard, Jackie

  Chope, Christopher

  Beith, Rt Hon A J

  Clappison, James

  Bell, Martin (Tatton)

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Bercow, John

  Brady, Graham

  Clifton-Brown, Geoffrey

  Brake, Tom

  Collins, Tim

  Brand, Dr Peter

  Cotter, Brian

  Breed, Colin

  Cran, James

  Browning, Mrs Angela

  Davey, Edward (Kingston)

  Burns, Simon

  Davis, Rt Hon David (Haltemprice)

  Butterfill, John

  Day, Stephen

  Campbell, Rt Hon Menzies (NE Fife)

  Fabricant, Michael

  Foster, Don (Bath)

  85

  Fowler, Rt Hon Sir Norman

  Morgan, Alasdair (Galloway)

  Gale, Roger

  Nicholls, Patrick

  George, Andrew (St Ives)

  Oaten, Mark

  Gill, Christopher

  Öpik, Lembit

  Gray, James

  Paice, James

  Hancock, Mike

  Rendel, David

  Harris, Dr Evan

  Robertson, Laurence

  Harvey, Nick

  St Aubyn, Nick

  Heath, David (Somerton & Frome)

  Sanders, Adrian

  Howarth, Gerald (Aldershot)

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

  Hughes, Simon (Southwark N)

  Spicer, Sir Michael

  Jones, Nigel (Cheltenham)

  Stunell, Andrew

  Keetch, Paul

  Swayne, Desmond

  Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

  Syms, Robert

  Taylor, John M (Solihull)

  Laing, Mrs Eleanor

  Taylor, Matthew (Truro)

  Lait, Mrs Jacqui

  Taylor, Sir Teddy

  Lansley, Andrew

  Thomas, Simon (Ceredigion)

  Lewis, Dr Julian (New Forest E)

  Tonge, Dr Jenny

  Lidington, David

  Tyler, Paul

  Lilley, Rt Hon Peter

  Webb, Steve

  Livsey, Richard

  Wells, Bowen

  Llwyd, Elfyn

  Whittingdale, John

  McIntosh, Miss Anne

  Willis, Phil

  McLoughlin, Patrick

  Winterton, Mrs Ann (Congleton)

  Major, Rt Hon John

  Tellers for the Noes:

  Michie, Mrs Ray (Argyll & Bute)

  Mr. Peter Atkinson and

  Moore, Michael

  Mr. John Randall.

  MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

  Question accordingly agreed to.
  Resolved,
  That this House endorses the Government's approach to pensions and other policies for pensioners; notes that the Government has already committed £6½ billion more to pensioner benefits during this Parliament than was planned by the Conservatives, while ensuring that this additional expenditure is funded prudently and consistently with the Government's fiscal rules; strongly agrees with the Government that the basic state pension should be retained as the foundation of pension provision, and that most should be done for those pensioners who need most help through the Minimum Income Guarantee; supports the additional help for pensioner households, including winter fuel payments, which now gives them the equivalent of a further £3 a week and free TV licences for the over 75s, which were introduced from 1st November 2000; also supports the wide range of other measures taken by the Government for pensioners, the record investment in the National Health Service, free eye tests, help with home insulation and concessionary public transport fares and reductions in income taxation; and further agrees with the Government that the next priority should be to help pensioners with moderate savings and small occupational pensions to ensure that their thrift is rewarded and that they are able to share in the rising prosperity of the nation.

  Privatisation
  Mr. Deputy Speaker (Sir Alan Haselhurst): We now come to the motion on privatisation. I should announce to the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.
  7.31 pm
  Mr. Don Foster: I beg to move,
  That this House notes public concern about the effects of railway privatisation and about current plans to privatise National Air Traffic Services and London Underground and opposes the dogmatic pursuit of privatisation in public services.
  I am not surprised that Mr. Speaker chose to select the amendment in the name of the Prime Minister because—disappointingly, given that the Conservative party was responsible for many of the problems through its dogmatic approach to privatisation—it has not even bothered to table an amendment to defend its record. We tabled the motion because the privatised railways are in chaos at present and we are concerned that, if the Government follow their current proposals, we shall end up with exactly the same chaos in the London Underground and National Air Traffic Services.
  When the Conservative party introduced many of its privatisation proposals, the Liberal Democrats warned it that privatisation simply was not the cure for all ills. At that time, the Labour party in opposition entirely agreed with us. The Labour party would accept that both our parties were correct in expressing our concerns. However, it appears that, in office, the Labour party has changed its spots. We are now in danger of seeing a Labour party introducing its own dogmatic approach to privatisation and the real possibility of putting lives at risk with its proposals for the part privatisation of NATS and the underground. It seems that the new Labour party has developed its own form of privatisation dogma.
  The Liberal Democrats are certainly prepared to acknowledge that the private sector and the public sector can benefit from each other. We acknowledge that some of the privatisations that have occurred in recent years have had positive outcomes. Even if British Telecom has some way to go, the liberalisation of the telecommunications industry has undoubtedly brought significant benefits. We also acknowledge that the privatisation of gas and electricity has been instrumental in improving the standards of service offered, even though we were unhappy with the way in which and the price at which that was done.
  It is interesting that some rather bizarre side effects have resulted from those privatisations. I suspect that the Conservative party did not anticipate that the electricity powering the lights in Parliament would come from an electricity company owned by the French Government. Therefore, rather bizarrely, given the views of the Conservative party, any profligacy on our part in this building will lead to a reduction of taxes in France—not what the Tories wanted.
  There has been a growing acceptance that, in certain circumstances, some public services can be delivered by or in partnership with the private sector. A good example is the Government's recent announcement of the concordat between the NHS and the private health care sector. That seems to be a sensible form of partnership between the two sectors.
  Mr. Gerald Howarth: Will the hon. Gentleman bring pressure to bear on the French

  87
  authorities to privatise those moribund state organisations in France to ensure that British companies are allowed reciprocity so that they can buy French companies in France?
  Mr. Foster: That is the most bizarre intervention that I have heard for a long time. It is extremely bizarre for the hon. Gentleman, whom I have heard speak passionately against our integration into Europe many times, to express any concern whatever about how industry is organised in France. I hope that the hon. Gentleman, who supports a party that was so passionately committed to privatisation, is prepared to acknowledge that privatisation has involved many problems. I hope that he accepts that, where privatisation involving selling off the family silver and putting money into the Treasury coffers, very often the organisation was sold off far too cheaply and the nation sold short.
  Mr. Paul Keetch: Would my hon. Friend care to comment on the Government's proposals to sell off the Defence Evaluation and Research Agency? Given that that sell-off has few friends in the Ministry of Defence or the American Department of Defence and, indeed, no friends at all on the Select Committee on Defence, is it not another case in which the only friends of the sell-off appear to be in the Treasury?
  Mr. Foster: My hon. Friend is absolutely right. It is interesting that that case follows the pattern of the way in which the Labour Government are now pursuing privatisation. Having opposed the way in which the railways were privatised, with massive fragmentation, the Government are proposing to split DERA in two and flog off three quarters of the total package to the private sector. That has implications not only for public safety, but for national security.
  As we look back on privatisation, I hope that hon. Members on both sides of the House accept that many mistakes were made, details were often not properly thought through and long-term consequences were often ignored for short-term gain. Many such examples abound. We have only to consider the way in which employees lost out, especially in early privatisations. For example, when local government services were privatised, it was ludicrous that the employees who worked in the public sector ended up doing exactly the same job as before, but their wages were lower and they had poorer pensions and conditions.
  Protection was rightly introduced under the Transfer of Undertakings (Protection of Employment) Regulations 1981. However, equally bizarrely, transferees are protected, but new employees of the privatised service provider have poorer conditions, so there is a two tier system, which is not likely to raise morale.
  Mr. John Bercow rose—
  Mr. Foster: The hon. Gentleman is desperate to intervene, so I shall give way to him.
  Mr. Bercow: Desperate is scarcely the word. The hon. Gentleman refers to the undervaluation of assets at
  88
  flotation to the private sector. Would he care to cast his mind back and concede that the significance of the privatisation of the bulk of the state industrial sector was that industries which, in public ownership, were costing the Exchequer £50 million a week under the previous Labour Government now contribute tens of millions of pounds a week to the Exchequer?
  Mr. Foster: I certainly do not accept the hon. Gentleman's suggestion. How did the Conservative Government manage to sell off the railway system? Their first act was to pay off £1.6 billion in debt. They ensured that the company's assets were widely spread, and they took various steps to make the company more attractive. If the hon. Gentleman examined the figures for many privatisations—the railways are a good example—he would appreciate that more state money is being put in to subsidise the various services than previously.
  Mr. Geoffrey Clifton-Brown: The hon. Gentleman appears to criticise the privatisation of the railways. I wonder whether he is aware that the right hon. Member for Yeovil (Mr. Ashdown) asked:
  is not the answer to give BR access to the private markets to increase investment and to give private services access to the rail network to increase competition?—[Official Report, 15 October 1991; Vol. 196, c. 148.]
  Does the hon. Gentleman agree with his right hon. Friend?
  Mr. Foster: I hope that the hon. Gentleman will acknowledge that his point is a bit of a damp squib. I had been warned in advance by several Conservative Members that an exocet missile would be coming at me—I was told that a former leader of my party totally disagreed with the way in which the Liberal Democrats, and our predecessor parties, voted on the privatisation of the railways. Fortunately, I took the opportunity to check the record, which showed that my right hon. Friend voted in the same Lobby as the rest of my colleagues.
  Mr. Clifton-Brown: So the right hon. Gentleman said one thing and supported another?
  Mr. Foster: No. If the hon. Gentleman studied my right hon. Friend's comments, he would appreciate that my right hon. Friend suggested the possibility of a state-run sector becoming involved within the market. We have no problem with that—we have discussed it on several occasions. It is sad that the hon. Gentleman precisely illustrates my concern about the dogmatic approach that the Conservatives adopt in this context.
  Mr. Clifton-Brown: Will the hon. Gentleman give way?
  Mr. Foster: No. I want to make progress.
  Many examples show that the involvement of the private sector in the delivery of public services has not been very smooth. For example, during the early days, Group 4 ran our prisons, and, more recently, there were failures in the administration of housing benefit.
  Mr. Bercow: Group 4 was seven years ago.
  Mr. Foster: I gave a more recent example. Even more recently, the private sector attempted unsuccessfully to

  89
  turn around failing schools. The allegedly incomparable business skills and entrepreneurial flair of the private sector have not, frankly, been a huge benefit. I suspect that few of us support the continued use of the skills and flair of, for example, Connex South Central. The tragedy of the Hatfield rail crash threw the dangers of inappropriate privatisation into stark relief.
  Mrs. Eleanor Laing: Will the hon. Gentleman give way?
  Mr. Foster: Not for the moment.
  The public must wonder why, during the past fortnight, whole swathes of our rail network had to be closed at short notice, and whether benefits would result from an approach that fragmented the service into hundreds of parts, which competed against rather than co-operated with each other. They must also wonder how, in recent years, there has been a significant reduction in the number of people employed to check the safety of tracks, a reduction described by Railtrack as an efficiency gain. The public must wonder how Railtrack could put out to contract the safety checking and maintenance of the track and the supervision of that work. It appears that Railtrack wants to distance itself from any responsibility. The public will begin to wonder why the many different contractors, who are all busy trying to out-do each other, do not talk to each other about the crucial issue of rail safety.
  Mr. Phil Willis: Does my hon. Friend find it bizarre that Railtrack's first action was to invest heavily in tarting up Britain's stations rather than in improving outmoded track and signalling systems? In other words, safety was compromised in order to create nice stations at Paddington, York or Leeds.
  Mr. Foster: My hon. Friend is absolutely right, although I should go further. The Government recently introduced a safe stations award. We want stations not only to look pretty but also to be safe and to provide adequate protection to the people who use them. However, after two years, only 63 of 2,500 stations have reached the relevant standards.
  Hon. Members may be particularly surprised by the fact that privatisation of the railways means that Railtrack is fined if it closes track to carry out safety work and fined if it keeps the track open and does not carry out safety work. One might say, "Heads, you lose and tails, you lose."
  The public would be most surprised of all by a report in The Daily Telegraph on Friday, which stated that a busy commuter train had been deliberately driven over a broken track. Railtrack said that it was "standard practice" to pass a train over a suspected break at low speed to assess the defect's seriousness. I find that horrific. Surely Railtrack has more sophisticated testing equipment and does not need to roll a train with 200 passengers on board over damaged rail to assess whether it would be derailed. That is an appalling indictment.
  Mr. Richard Livsey: I am listening carefully to my hon. Friend's speech. Does he agree that the situation is partly due to the incompetence of the contractors chosen by Railtrack to do that work,
  90
  which has often allowed the track to get into that condition? Does he also agree that we need a major investigation into the way in which the railway system was privatised and into the involvement of people who are connected with the Conservative party and with companies that benefited from that privatisation?
  Mr. Foster: My hon. Friend makes his point extremely well. He may not be aware of the full details about the current contractual arrangements between Railtrack and its contractors. If hon. Members studied them, they might be very surprised. Some contractors are given the task of ensuring the safety of the track, and of determining how much work should be done on the track, but they are provided with the same amount of money regardless of how much work is done on the track. Clearly, there is at least a temptation for contractors to minimise the amount of work that is done.
  The public's concerns about rail privatisation make them worried about the Government's proposals for public-private partnerships for the tube.
  Mr. James Gray: I sense that the hon. Gentleman is about to discuss air traffic. The central thrust of his remarks so far has been to suggest, in a slightly snide way, that somehow or other privatisation has led to a decrease in safety on the railways. If so, how does he account for the fact that the number of signals passed at danger are half what they were before privatisation and that the number of fatal accidents has been cut massively? Of course, we all have the recent tragedy in our minds. None the less, there has been a great improvement in rail safety since privatisation. How does he account for that?
  Mr. Foster: I explain it by asking the hon. Gentleman to look again at some of the statistics. The number of broken rails is greater and the overall state of the track is worse than at privatisation. Those are the official figures and I hope that the hon. Gentleman will accept them.
  Mr. Gray: Will the hon. Gentleman give way?
  Mr. Foster: No, because we shall end up by batting statistics—
  Mr. Gray rose—
  Mr. Foster: Very well, I will give way.
  Mr. Gray: I am very grateful to the hon. Gentleman for giving way again, as it is most important to correct the point that he made. He must have listened carefully to the evidence given by Mr. Gerald Corbett to the Transport Sub-Committee of the Select Committee on the Environment, Transport and Regional Affairs, last Wednesday. Mr. Corbett pointed out that Railtrack was checking 1,800 individual sites and that not one was in anything like the same condition as the broken rail at Hatfield. He said that the state of the railways was vastly better than it was before privatisation. The hon. Member for Bath (Mr. Foster) is wrong to say that the railways are worse.
  Mr. Foster: This could become a rather silly argument between the hon. Gentleman and me. I hope that he will

  91
  agree that merely to judge the matter on whether bits of track are in an identical condition to that found at Hatfield is not a fair way to assess the overall quality of the track. It is generally accepted that, overall, the track is in worse condition than at privatisation.
  If the hon. Gentleman wants to get technical, it is more difficult to understand why gauge-corner cracking appears in the new high-stress, steel rails that did not exist at the time of privatisation—[HON. MEMBERS: "Ah."] The installation of those new rails may be leading to greater difficulties than occurred with the old rails. The right hon. and learned Member for North-East Bedfordshire (Sir N. Lyell) looks surprised, but he should be aware that, in the current programme of work, Railtrack is replacing the more modern rails with the softer type that was used previously. I hope that the hon. Member for North Wiltshire (Mr. Gray) will not pursue the matter.
  Because of the public's concern about safety as a result of the way in which the railway was privatised, they are understandably anxious about the Government's proposals for the privatisation of National Air Traffic Services and of the London underground. All hon. Members agree that the underground desperately needs urgent attention. Hon. Members may have heard an item on the "Today" programme this morning, which referred to a District line driver who, yesterday, told passengers in his train that
  if you have a camera handy, there's a chance to record a rare sighting of a Circle Line train in its natural habitat.
  It is certainly true that there is overcrowding, delay, unreliability, dirt and discomfort. Decades of neglect have built up a huge backlog of faults and structural failings. We are all aware that at least £1.5 billion is needed to return the tube to a worthwhile condition.
  Mrs. Laing rose—
  Mr. Foster: I want to make some progress.
  How can we deal with the problems? The Liberal Democrat proposal was clear and was well publicised during the London mayoral elections: to allow Transport for London to raise money through a bond issue. We envisaged Transport for London having access to the market at a far cheaper rate—at less expense—than the Government's proposed private sector borrowing arrangement. Under our proposals, the money could be raised more cheaply, with the additional benefit that it would remain under democratic control.
  I am sure that the Under-Secretary of State for the Environment, Transport and the Regions agrees that the majority of candidates who stood at that election supported our proposals—including the present Mayor of London. Indeed, the only candidate who supported the Government's public-private partnership obtained only 13 per cent. of the votes—such was the popularity of the Government's proposal.
  Yet again, the Government are making a proposal that would lead to the fragmentation of a service—in this case, the tube—allowing different people to buy the various fragments. It is somewhat worrying that the Health and Safety Executive notes that some of the potential purchasers are bodies and organisations which were implicated in some of the safety problems with the
  92
  national rail network. We are deeply concerned about the Government's approach for London underground and equally worried about their proposals for NATS.
  I hope that we all agree that the only purpose of NATS is safety. The Deputy Prime Minister said:
  Air traffic control is all about safety, which must be paramount.—[Official Report, 20 December 1999; Vol. 341, c. 535.]
  In London and the south-east, at any time of day, thousands of aircraft are circling overhead, waiting to land. The demands on air traffic controllers increase monthly. There is little room for manoeuvre.
  Despite all those pressures, NATS has an excellent safety record under its current arrangements. There can be no justification for anything that puts that record at risk. The PPP would provide an unnecessary and dangerous distraction and would put safety in conflict with profit—the same conflict that was so disastrous for our railways.
  The Government claim that they have to adopt that arrangement, but they do not have to do so; it is not even necessary. We agree with the Government that it will be necessary to raise about £1 billion for investment in NATS over the next 10 years. Their proposal is to sell off 51 per cent. of NATS, possibly selling off more at a later date. The new partner will be expected to raise the money for that investment.
  Our argument on raising money for the tube also applies to NATS. It would be cheaper for the Treasury to raise the money than if it were raised by a private sector borrower. Such a borrower would want a return of between 10 and 20 per cent. compared with the 8 per cent. needed by the Treasury. Something will have to go. Our concern is that the something will be safety.
  Mr. Christopher Leslie: Many of the hon. Gentleman's comments will strike the general public as scaremongering. Is he aware that air traffic control in the majority of Britain's airports is already in private or independent ownership? Is he really saying that those airports are less safe as a result?
  Mr. Foster: The hon. Gentleman makes the same mistake as those who suggest that we should no longer be concerned about airline safety after the privatisation of British Airways. The reality is that there is a difference between safety under a monopoly supplier and under a regime of tough competition. The provision of air traffic control is subject to competition at individual airports, just as there is competition between airlines. However, NATS is not subject to competition.
  It is no wonder that so many people oppose the Government's proposals—pilots, air traffic controllers, the chair of the Transport Sub-Committee, and a large number of Labour Members and peers. It is not surprising that the Sub-Committee described the proposal as the worst of all possible options. However, the Government seem to refuse to listen. They are unable to listen to those who know what is at stake; unable to learn from the mistakes of rail privatisation and unable even to remember what they said four years ago.
  Everyone in the House remembers the pledge given at the 1996 Labour conference by the current Chief Secretary to the Treasury. He was cheered to the echo for saying:
  Our air is not for sale.

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  Liberal Democrats agreed with him then, and we continue to agree with that sentiment. We have seen no evidence to justify changing our mind.
  The wording of the Government's amendment to our motion is interesting. Labour Members should note that it states that the House should welcome
  the Government's pragmatic policy of developing Public Private Partnerships for National Air Traffic Services and the London Underground.
  Hon. Members should note the word "pragmatic".
  Liberal Democrats certainly prefer a pragmatic to a dogmatic approach. The Oxford English Dictionary defines the word "pragmatic" as
  dealing with things sensibly and realistically.
  We certainly do not accept that the two PPP proposals are sensible or realistic. However—given the Government's apparent refusal to listen to anyone—they perhaps used in the amendment the 16th century definition of the word "pragmatic". That definition is, "busy, interfering, conceited." It is my contention that pressing ahead in the face of significant opposition based on the failures of similar moves elsewhere is conceited. It is not pragmatic; it is dogmatic.
  We hope that Members on both sides of the House will join together to support our motion and to oppose the dogmatic approach to privatisation being adopted by a Labour Government.
  8 pm
  The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
  "deplores the previous Government's incompetent privatisation of the railways which left the network fragmented, cost taxpayers billions of pounds and brought rail travellers hours of delays; welcomes the Government's creation of the Strategic Rail Authority to give direction to the industry from an industry-wide perspective rather than from the narrow interests of individual companies; recognises that the Government's 10-year plan is delivering the largest investment programme for the railways for generations to tackle the problems caused by years of under-investment in the public and private sectors; welcomes the Government's pragmatic policy of developing Public Private Partnerships for National Air Traffic Services and the London Underground, enabling much needed investment and private sector financial and management skills to be introduced to the public services while safeguarding safety and the public interest; and regrets the official Opposition's dogmatic pursuit of privatisation for the London Underground and the National Air Traffic Services."
  I have frequently proclaimed my affection and respect for the hon. Member for Bath (Mr. Foster), but I fear that he has slipped from his normal high standards on this occasion. I found his speech both disappointing and disingenuous. I could think of another word with the prefix "dis" to describe it, but our parliamentary conventions preclude my use of such a word. However, we all know what is going on here—it is the technique of the big slur.
  The hon. Gentleman begins by citing the widespread, and perfectly understandable, public dissatisfaction with the privatisation of the railways by the previous Administration—a dissatisfaction that has certainly been heightened by recent tragic events and the continued shortcomings of the railway network—but then seeks to tar the Government's wholly different proposals for the
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  public-private partnerships in London Underground and National Air Traffic Services with the same brush. It is an attempt at condemnation by innuendo, or guilt by association. It is typical Liberal Democrat opportunism and, as usual, it will not work.
  Mr. Paul Tyler: I do not remember whether the Minister held responsibility for transport issues in the previous Parliament, but does he recall that the Liberal Democrats urged Labour Members to set their faces firmly against the privatisation of Railtrack by making it clear that, if it were to be privatised by the Conservatives, it would be bought back by an incoming Labour Government, with Liberal Democrat support if that was the way that the country had voted? We could have then stopped privatisation in its tracks. I judge from his comments that he still believes that the privatisation of Railtrack was a mistake. Why did the Labour party at that stage not take up our proposal?
  Mr. Hill: I am always rather amused by the Liberal Democrats' rewriting of history. I notice that it is always the Liberals who lead on the issues and the rest of the House seems to follow tamely. However, the Labour party came to a clear judgment before the election and we stated in our manifesto that the reacquisition of the privatised railway system was a cost that was simply not worth bearing when set against other demands on the Exchequer from the nation's priorities of health, education and law and order. That is why we are working to improve the privatised railway system that we inherited in ways that I hope, with the indulgence of the House, I shall be able to describe soon.
  The motion before the House is unacceptable and ought to be rejected. It ought to be rejected not because, as is usually the case, an opposition motion is an expression of opinion that does not reflect the opinion of the majority of the House, but because this motion is—in its premises—quite simply factually wrong.
  The motion describes the Government's proposals for London Underground and NATS as "privatisation". That is just plain wrong. If we were planning to sell off the public's stake in these concerns lock, stock and barrel and pass over ownership and control in their entirety and in perpetuity to the private sector, that would be privatisation. That is what privatisation meant for water, for gas, for electricity, for telecommunications, for coal, for buses and for the railways under the Tories.
  Mr. Don Foster: Given that the Minister's definition of privatisation involves selling off the entirety of a service, will he tell us that, having sold off 51 per cent. of NATS, the Government have no intention whatsoever of selling off any of the remaining 49 per cent? Were he to say that, he would be saying something that totally contradicts what he said in Committee during our consideration of the Transport Bill.
  Mr. Hill: If the hon. Gentleman gives me a chance, I shall come to that issue in due course. What I said with crystal clarity in Committee—as he knows, that is my style—was that any such decision would have to come back to the House for its democratic decision.
  By contrast with the privatisation carried out by the Conservatives, in the case of National Air Traffic Services, the taxpayer will not only retain a major

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  shareholding in the public-private partnership. In addition, the Government will appoint "partnership directors" to protect the taxpayers' interest as an investor. Board unanimity will be required on dividends and reinvestment, and a special share will be entrenched in the new company's articles of association to protect the taxpayers' rights in key matters, such as the issue of new shares and dividend policy. Frankly, it is ludicrous to describe those arrangements as a privatisation.
  Mr. Peter Lilley: Will the Minister elucidate a little? Is he saying that selling 51 per cent. does not constitute privatisation and, therefore, that the previous Government's initial sale of 50 per cent. of British Telecom was not an act of privatisation?
  Mr. Hill: I am certainly saying that the Government's proposals for NATS do not constitute privatisation. Indeed, if the right hon. Gentleman had not been so keen to make his point, he might have listened to the reasons that I adduced a little more carefully. If he had, he would have found out that the safeguards entrenched in the arrangements for NATS are totally distinct from, and contradict, any arrangements made for BT or any other privatisation under the previous Administration.
  Mr. Clifton-Brown rose—
  Mr. Hill: I shall wait for a moment before I receive the exocet that has been prepared for me by Conservative central office.
  To return to my thread, it is equally ludicrous to describe as privatisation our proposals for London Underground. They will leave the new public sector London Underground with responsibility for operations and safety, and they mean that a modernised London Underground will return to public ownership at the end of the PPP period.
  Mr. Clifton-Brown rose—
  Mr. Hill: I take pity on the hon. Gentleman, so I shall let him have his moment of glory.
  Mr. Clifton-Brown: I am grateful to the Minister for letting me have my moment of glory. Does he agree with the report of the Select Committee on the Environment, Transport and Regional Affairs? It says:
  The current proposal for a public-private partnership for NATS is, in our view, the worst of all the possible options.
  Given that their lordships—with the assistance of Liberal Democrat peers and some Labour peers—defeated the Government on an important amendment to the Transport Bill last week, will he clearly state whether he intends to try to overturn that amendment in this House and to bring about a public-private partnership for NATS?
  Mr. Hill: On the hon. Gentleman's first point, we do not agree with the judgments expressed in the report of the Select Committee on the Environment, Transport and Regional Affairs. We found them ill considered and ill thought out. On the question of support for the amendment carried in another place, our position is
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  entirely clear. We do not intend to jeopardise the new investment that will flow from the PPP and the improved project management. That is why we shall seek to reverse the amendment in this House.
  Mr. Robert Syms: Will the Minister give way?
  Mr. Hill: I shall give way to the hon. Gentleman, but I do not wish to detain the House for as long as the hon. Member for Bath did. After this intervention, I shall seek to make some progress.
  Mr. Syms: A second amendment carried by the Lords was designed to protect the pensions of NATS employees and to include provision for doing that in the Bill. Do the Government intend to overturn that amendment, too?
  Mr. Hill: We want to look at that amendment very carefully, and we will return to that in due course.
  The public-private partnerships that we are putting in place for London Underground and NATS are neither privatisations nor, as the motion would have it, remotely inspired by dogma. After all, by what stretch of even the Liberal Democrats' lurid imagination could the Labour party and this Government be charged with a dogmatic commitment to privatisation? On the contrary, those PPPs represent carefully devised, appropriate and pragmatic solutions that deliver the best possible outcomes for the underground and NATS. They are the solutions that the Government's amendment commends to the House.
  It is indisputable that the British Rail privatisation was flawed. The Labour party spelled out its alternative approach in its general election manifesto—and we have delivered in government. We have set up the shadow Strategic Rail Authority to provide leadership and direction. The Transport Bill will establish the SRA proper and provide for stronger accountability and enforcement. Our 10-year plan provides the resources for massive investment in the railway: £49 billion over 10 years, including £7 billion of public money for a rail modernisation fund.
  In the past few weeks, the Rail Regulator has published the results of his review of Railtrack's access charges for maintenance and renewal, including necessary expenditure on safety improvements. By the end of this year, Railtrack's industrywide safety responsibilities will be separated from its commercial operations. Next year, Lord Cullen will publish his report on the Ladbroke Grove accident and on the culture and management of railway safety. Those initiatives herald more investment, more public accountability and a better deal for passengers—including a safer railway.
  Mr. Lembit Öpik: Will the Minister give way?
  Mr. Hill: I will give way, but after doing so I must make progress.
  Mr. Öpik: On a non-confrontational point, the Minister is describing how he will try to make rail privatisation work. One very common and specific problem arises when companies such as Northern Spirit and Virgin Trains abandon passengers at stations other than their final destination. Customers often have to haggle with

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  station staff for a taxi or some other means of completing their journeys. Will the Minister give me a commitment that one thing for which the money and his legislative powers will be used will be ensuring that those companies make it easy for customers to get to where they need to go even if they are abandoned at a station on the way?
  Mr. Hill: In a non-confrontational way, I entirely agree with the hon. Gentleman that a very dissatisfactory situation all too often prevails in our railway system. Frankly, the train operating companies ought to be improving their act right now. We inherited some flawed franchising agreements. We are in the process of refranchising and certainly expect to wrest from those contracts much higher standards of customer care along the lines that the hon. Gentleman has outlined.
  I think that we can all agree on the scale of the financial problems faced by the underground, and the need for urgent measures to deal with them. The previous Government left a huge investment backlog on the tube, and their public expenditure plans envisaged still further cuts in funding.
  We set about dealing with the underfunding immediately. In March 1998, we announced an additional £365 million of funding for London Transport over and above existing plans. In July 1999, we announced that we were allocating £517 million of additional resources to London Transport over two years, to help it deliver real improvements to passengers in the run-up to the PPP. In the Budget this year, we announced that a further £65 million would be allocated to London Underground in 2000–01—plus an additional £40 million to deal with claims on the Jubilee line extension.
  The extra funding still does not provide a long-term solution to the underground's funding problems. Even with the increases, London Underground is left with changes every year to its funding arrangements, making it impossible for it to plan its investment efficiently. That is what the PPP is designed to transform. It is quite wrong to suggest that the PPP is in some way like rail privatisation, and that it will somehow undermine safety. In fact, the whole point of the London Underground PPP is to learn from the mistakes of previous privatisations, not to repeat them.
  That is why the PPP structure is so different from a privatisation. It is based on fixed-term contracts rather than permanent transfers to the private sector. So assets will return to the public sector in a much improved condition. The PPP structure retains clear public sector accountability from the outset. Statutory safety responsibility for the whole underground remains with public sector London Underground. Indeed, the recent Industrial Society report that was commissioned by the Mayor of London on the PPP said that it
  recognises the special effort made by Government in ensuring that safety is managed centrally and rests ultimately in public sector hands.
  Dr. Jenny Tonge: The Minister will appreciate how successful bond issues for funding public transport have been in the United States. Will he explain why it is such a bad idea here and why the Government will not consider it?
  Mr. Hill: That is exactly what I intend to do. I noticed that the Front-Bench spokesman, the hon. Member
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  for Bath, skated over the Liberal Democrat proposals. I intend to give them careful scrutiny and to explain precisely the reasons for rejecting them.
  I return to the question of the proposed PPP for London Underground. Unlike on the privatised railways, there will be no separation between train and track infrastructure maintenance. London Underground will retain responsibility for all operational matters—from switching signals to driving trains and staffing stations. So it will be a far more unified system.
  The PPP will also be subject to two key validation tests: safety and value for money. On safety, we have consistently made it clear that the PPP will not proceed unless it can be shown that it will make a substantial contribution to improved safety. As I have said, the safety regime for the PPP retains a structure in which statutory responsibility for safety of the whole network remains with public sector London Underground.
  The transition to the new arrangements for the PPP requires three sets of changes to London Underground's safety case—to ensure that safety is maintained and improved both in the run-up to the PPP and when it is under way. Two of those revised safety cases have already been approved by the Health and Safety Executive. The transition process also requires a safety audit, which will begin shortly, and the submission and acceptance of the third set of changes to the safety case.
  I am not making any new political commitment when I say that the PPP will not proceed unless and until the HSE has taken an independent view and has stated that it is satisfied with the revised safety case. I am simply stating the legal position. Our plans will deliver a network that is publicly run, publicly accountable and properly financed. It will reverse the increase in serious injuries that we have seen on the tube over the past 10 years.
  The second key test for the PPP, after safety, is value for money. As the House will be aware, London Transport and its advisers have been devising a public sector comparator against which the bids for the PPP will be judged. Bids will be considered against not only traditional funding methods but a public sector bond option. We have published the methodology for that comparator, which has been independently audited by KPMG.
  Most importantly, in August, the National Audit Office—Parliament's public expenditure watchdog—announced that it would bring its scrutiny of the comparator forward so that it could report on it before contracts were signed. That will ensure that the comparator represents a fair and rigorous test of the PPP bids.
  Mr. Bercow: Will the Minister give way?
  Mr. Hill: I know that the hon. Gentleman has not yet intervened, but I hope that he will forgive me for not giving way because I need to make progress. If I feel that I have made satisfactory progress, I will of course yield to him in due course. After all, he used to represent me on Lambeth council—albeit not, I hasten to add, with the benefit of my vote.
  The Liberal Democrats' alternative to the PPP is a bond option. Fair enough—we are not dogmatically opposed to bonds, but we do not believe they are the right solution for the underground. They would do nothing to bring management efficiencies to the system; they would

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  introduce a further delay in getting a financing regime in place; and, as the Industrial Society itself concedes, they would not be a realistic prospect without new powers to raise local taxes. We do not believe Londoners want more delay—perhaps of up to two years—in modernising the tube, nor do we think that they want to pay more taxes, or to confer tax-raising powers on the Mayor and the Greater London Assembly.
  We are convinced that the PPP is the best option for NATS; let me explain why. NATS provides a world-class service, but air traffic is growing by more than 5 per cent. each year and increasing delays are inevitable unless significant improvements are made to the system. We are already addressing these needs: the £700 million Swanwick centre will open in the winter of 2001–02. However, NATS managers say that they also need more than £1 billion over the next 10 years to invest in safety. In particular, major investment is needed to bring the new Scottish centre at Prestwick on stream when it is needed, probably by 2007–08.
  Under the PPP, we will bring in a long-term strategic partner from the private sector that will fund and deliver the next generation air traffic control system. Under the PPP, NATS will be freed from Government financial constraints. With stable and long-term funding provided by the strategic partner, NATS will be able to plan its investment to provide significant benefits to the United Kingdom, airlines and their passengers as soon as possible. Freedom from Government financial constraints will also put NATS in a good position to export its expertise at a time when there is an increasing realisation that international air traffic control systems must be consolidated if they are to be able to cope with continuing increases in air traffic.
  We have rejected the privatisation of NATS precisely because we do not believe that it would provide the necessary safeguards that the travelling public deserves. Crucially, under the PPP, we are able to build in specific safeguards that would not be possible under a privatisation. For example, as I have already said, by retaining a significant shareholding, the Government will retain the right to appoint directors to the board of the company. Under the PPP, the main strategic decisions of the NATS board will require a unanimous vote of all directors, including those who will be appointed by the Government. Under that structure, the Government and the taxpayer will also be able to share in the future success of the PPP and to have a say in key decisions affecting the company. None of that would be possible with a 100 per cent. sell-off.
  Air traffic control is all about safety. That will continue to be the overriding priority under the PPP. That is why we have amended the Transport Bill in another place to make it clear that maintaining a high level of safety in the provision of air traffic services must have priority over every other consideration when functions are exercised under the legislation.
  Of course, setting up the PPP is also crucial in delivering the final and complete separation between safety regulation by the Civil Aviation Authority and the provision of air traffic control services by NATS. The mid to late 1990s saw a 35 per cent. increase in the number of risk-bearing air proxes involving commercial air transport. That is why we are determined to strengthen
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  aviation safety by separating air traffic services from safety regulations, which is something that the industry, the Select Committee on the Environment, Transport and Regional Affairs and other aviation interests have sought for some years now.
  It goes without saying that our proposals for a NATS PPP have proved contentious, but everyone, including the Select Committee and the unions, accepts that doing nothing is not an option. We have considered various other funding mechanisms, including trusts, bonds, and publicly owned companies, but we are convinced that none of those will deliver all the benefits that a PPP will provide.
  The Liberal Democrats want a not-for-profit company to take over NATS. The reasoning behind this is, I assume, to establish that profit is not put before safety. Let me reassure the House that the PPP will not jeopardise safety: rather, it is designed to enhance the safety regime for air traffic control. Safety regulation will remain firmly in the public sector in a reformed CAA and, as I have just said, we have amended the Transport Bill to reiterate our commitment to safety. In short, I do not accept the profit-before-safety argument, and nor should the House.
  I should stress that there is nothing in the PPP structure or in the Transport Bill that would prevent a viable not-for-profit company from becoming our strategic partner, but for us to take a view on what offers the best future for NATS, there needs to be a competitive process which allows rational assessment of the bids we receive. Any not-for-profit bid needs to stand up and be assessed alongside the others. Limiting the selection criteria in the way the Liberal Democrats propose would knock out potential candidates who might, at the end of the day, be a better partner.
  Other funding mechanisms for NATS have also been mentioned in the past, including trusts, bonds and publicly owned companies. We have considered those options, but we are convinced that none of them will deliver all the benefits that a PPP will provide. Last week, we announced that we have three robust potential strategic partners for NATS. We shall now work with those world-class consortiums to find the best option for the future of the company and of air traffic control in the UK.
  I have gone out of my way to set out the grounds for rejecting the alternatives for the future of NATS and the London Underground propounded by the Liberal Democrats. Given the deplorable terms of their motion, there are those who might take the view that I have been too generous and reasonable in my response. However, let us not lose sight of the real villains of the piece: the gung-ho privatisers of the official Opposition, who, despite all the evidence, still advocate the wholesale privatisation of the underground and air traffic services. Will they never learn?
  The Conservatives privatised and deregulated the bus industry, with the result that bus passenger journeys went down by a third and bus services in the countryside were decimated. The Labour Government have stemmed the decline in bus passenger numbers: through our rural bus grant, last year, 16 million new passenger journeys were enjoyed by country people benefiting from new and enhanced rural bus services.

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  The Conservatives privatised the railway, broke it up into 100 parts and got an appalling deal for the taxpayer into the bargain.
  Mr. Bercow: I am grateful to the Minister for giving way, even though he has never allowed the facts to intrude on his private prejudices. Given that, this year, London Underground will receive an investment that is precisely £282 million less than was provided in the last year of Conservative Government, how does he justify the expenditure by his Administration of more than £60 million on consultancy fees in connection with a botched privatisation?
  Mr. Hill: That is rich coming from a member of the Conservative party, which spent £450 million on a rail sell-off that will deliver less to the travelling passenger and the taxpayer than the London Underground PPP will achieve. Let me allow the facts to intrude on the debate: were the hon. Gentleman to take the trouble to look at the forward projections of the public expenditure figures produced by the last Conservative Government in 1996, he would find that projected investment by central Government in London Underground this year was zero. He is on pretty thin ice when he condemns the Labour Government, who have invested £1.6 billion in London's underground system in our three years in office.
  When the Tories left office, Railtrack was £700 million behind in its investment programme. With Labour, rail investment is now 33 per cent. higher than in 1997, and we have announced plans for a massive injection of £49 billion into the rail system over the next 10 years. The Conservatives left a £1.2 billion investment backlog in the tube; they made a £400 million cut in tube investment in their last Budget; and, if they had stayed in office, they would by now have cut Government funding to London Underground to zero. Yet now the Conservatives have the effrontery to propose the full-scale privatisation of London Underground, breaking it up into five companies competing with each other, and they still want to sell off NATS lock, stock and barrel. If we are talking about dogma, they are the dogmatists. Like the Bourbons, they have learned nothing and forgotten nothing.
  We have learned from the mistakes of the dogma-driven programme of the previous Administration. We are working hard to put right the mistakes made on the railways, and we have developed innovative, custom-built solutions for the underground and NATS. That is the right way forward, and that is why the House should reject the disreputable and opportunistic motion tabled by the Liberal Democrats and support the Government's sensible and forward-looking amendment.
  I commend the amendment to the House.
  8.30 pm
  Mr. Robert Syms: In the early years of the previous century, Sidney and Beatrice Webb and the Fabians had high hopes that central planning and governmental control were the way of the future. By the end of the century, the overwhelming lesson was that that did not work and never had any chance of working. Around the world—not only in Europe, but in the far east and South America—most countries, whatever the political persuasion of their Governments, are privatising industries and looking to free enterprise to deliver the goods.
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  A free enterprise system is more likely to generate wealth, innovation and enterprise. It is more likely to devolve decision making to millions of people who are consumers and who, through the market mechanism, make choices. That mechanism has proved over the past century to be the one that delivered the best economic outcomes. Even left-wing politicians have concluded that free enterprise is best and that one can control an agenda without having to own an industry.
  The one party that seems to have a problem with that notion is the Liberal Democrats. I know that the past century did not treat them well, and if they continue in their current vein, this century will not treat them well either. The social democrats in Germany dropped their Marxist tag in 1959, the socialists in Spain did so in the 1970s and became the Government throughout the 1980s, and even the Labour party, one of the most conservative institutions in this country, dropped clause IV, because it did not see the relevance. [Interruption.] I hear someone mutter, "Not all of us." That is a good point—only last week an hon. Member asked the Prime Minister about renationalising the rail industry. The Labour party still has not quite adapted to the changes that its constitution has produced, but it is going in the right direction.
  Free enterprise brings home the bacon and is the system most consistent with democratic government, because it devolves decision making. The Conservative party has been a defender of free enterprise for most of the past century because as a party we realise that property and a diverse economy are essential for a healthy nation. We defended free enterprise even when the Labour party tried to nationalise and control. We have always been proud of that, but not for any great dogmatic reason.
  One could probably say of the private sector the same as Churchill said of democracy: he said that democracy was the worst system, except for all the alternatives. Free enterprise requires a sensible competition policy, and capitalists must be prevented from taking advantage of people, because the natural capitalist tendency is sometimes to do that. Government have a role to play in setting parameters, setting rules and ensuring that fraudsters have no place in the system.
  During its 18 years in office, the Conservative party found that a shake-up of the large state sector would result in substantial gains. The burden on the state was extensive in terms of taxpayers' subsidies. As my hon. Friend the Member for Buckingham (Mr. Bercow) made clear, what has changed and what has assisted the current Chancellor's finances is that instead of the taxpayer being a contributor to many industries, many companies that were in the public sector are contributing through corporation tax and are more efficient organisations than they were.
  Many industries that were privatised by the previous Government have been able to expand overseas, investing in other countries and creating great world-class companies. We are a great trading nation, and many companies have expanded and undertaken projects that they would not have considered in an earlier generation. We now have a worldwide perspective. The lessons of that Government have been learned not only in this country but abroad, where many Conservative policies have been adopted because of the benefits that have become apparent.

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  The Conservative party is pragmatic in its approach and looks at each individual case on its merits. The Defence Evaluation and Research Agency was mentioned earlier. It would be surprising to find my party in the same Lobby as the Government on DERA, because there are real concerns about our relations with the Americans and our defence interests. It would be wrong to suggest that we wanted to privatise everything in sight.
  With regard to National Air Traffic Services, in principle we would prefer a proper privatisation, with a listing, to create a world-class company. However, NATS is a difficult matter. If it were an easy privatisation or a popular one, I expect that Baroness Thatcher or my right hon. Friend the Member for Huntingdon (Mr. Major) would have privatised it when in office, but the issues are complex and the benefits of privatisation are a little less obvious than in some other areas, not least because most of the income derived from NATS comes from international treaties negotiated across Europe and across the world.
  The ability of NATS to generate more income is dependent on the volume of air movements increasing. Unlike previous privatisations, such as that of BAA, which is a great retailing company that has expanded across the world and opened many stores, NATS cannot generate significantly more income, as the Government evidently expect it to do.
  We should remind the Government that when they were in opposition, they said that our air was not for sale. They did not include their proposals for NATS in their manifesto. What the Lords have done is sensible—they have asked the Government to think again. In the case of the British Telecom flotation, we allowed the electorate to make its choice. We passed legislation and had a general election. Only after we were confirmed in office did we proceed with the flotation. It would not be unreasonable for the Government to accept the Lords amendment, put it in their manifesto, fight an election on it and, if Labour is successful in being re-elected, carry it through.
  As I made clear in an intervention, I am also interested in whether the Government will reverse another amendment to protect the pensions of NATS staff. I hope that the Under-Secretary will give us more information on that.
  The Government's solution for NATS is bizarre. They began with a proposal for 49 per cent. Government ownership, 46 per cent. private ownership and 5 per cent. of shares for NATS staff. That was to be done not through a listing but by negotiating with a private strategic partner. The Government have no clear idea about how employees can benefit. There has been talk of setting up a trust to enable the 5 per cent. shares that the staff own to be internally traded. I hope that the Under-Secretary can give us more information about the way in which staff could benefit from such trading.
  We are also worried about the identity of the strategic partner, and especially about foreign ownership. There is a defence element to the topic that we are discussing. Anxiety therefore exists about foreign ownership, especially by a company that has substantial state ownership. Now that the Government have received some
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  expressions of interest, I hope that they can reassure hon. Members that the strategic partner is not likely to be a foreign company with heavy state ownership.
  Mr. Geraint Davies: How does the hon. Gentleman reconcile his worries about foreign ownership with his desire for wholesale privatisation?
  Mr. Syms: We should do our best to protect an independent British company. A strategic partnership, possibly with a foreign-controlled company, which provides air traffic services, might skew policy. I would require substantial reassurance before entering into a relationship with a foreign-owned company, especially if it was owned by a foreign Government. There was talk about the French company Thomson CSF being one of the strategic partners. I should therefore like the Minister to tell us more about the number of organisations that have expressed an interest and with which the Government are currently negotiating. There is currently great uncertainty.
  The Government believe in spending money on consultants and have spent £2.2 million on them. We had a short debate in Committee about the money that would be generated from NATS. There was some confusion about it. Perhaps the Under-Secretary can give us more information about the income that will be generated. He gave us an assurance in Committee that the money would be used by the Department of the Environment, Transport and the Regions, not the Treasury. On what will it be spent? If those questions are answered, we shall have a clearer idea of the Government's thinking.
  Mr. Clifton-Brown: My hon. Friend knows that NATS has outstanding loans of approximately £300 million. That money is urgently needed to pay for the new facility at Prestwick. Will my hon. Friend press the Under-Secretary to say when the proceeds from the public-private partnership are likely to be received? If there is a delay, safety could be jeopardised because the facility at Prestwick will not be built on time.
  Mr. Syms: I shall not answer my hon. Friend directly because the Under-Secretary heard the question and will doubtless take it into account. Time is limited, and several hon. Members want to speak.
  The Government presented an optimistic scenario about the results of their policy. They stated in Committee that they and many people believed that the number of air traffic control centres in Europe would be reduced to two and that one of the benefits of privatisation—or PPP as the Government call it—is that Britain would be in a strong position to provide them. I cannot envisage other nations allowing their aerospace to be controlled from Britain. There is a danger that we might be the loser in that competition, especially if there is some foreign ownership, control or influence over what happens in our aerospace. Our solution is better; the Government's is over complicated, but at least they will have an opportunity to reconsider when the Lords amendments are presented.
  The target date for the strategic partner has been given as March 2001. I hope that the Under-Secretary will be able to tell hon. Members whether the date remains relevant.

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  Hon. Members have raised the issue of safety. There is a strong culture of safety in aerospace and in NATS, and I do not subscribe to the idea that following the route that we are considering is likely to be detrimental to safety. The Minister clearly set out some of the reasons for that. Nevertheless, there are anxieties, and reassurances should be given. The Select Committee has criticised the proposal, but I shall not go into that.
  We have heard that the Government intend to overturn the Lords amendment that relates to delay. We hope that the Minister will give us more information about what the Government intend to do about including protection for pensioners in the Bill.
  We have a general concern about aerospace policy, and particularly the role of Eurocontrol, which we spent many happy and productive hours debating in Committee. We have concerns also about the European Community's single sky policy and how that will impact on Britain's aerospace policy.
  We privatised the railways, and not for any great political benefit to the Conservative party. I do not believe that there was any such benefit to be gained by doing so. We privatised them because we felt that there would be a benefit to the nation. Mainly, we wanted to attract substantially more private money and investment into the industry. During the 40 years from 1952, the share of journeys made by rail fell from 17 per cent. to only 5 per cent. The amount of goods moved by rail dipped dramatically from 42 per cent. to 7 per cent. British Rail had been allowing our railways to go into genteel decline over many decades. If we are to have a world-class economy—ours is the fourth largest economy in the world—we must have a transport infrastructure that delivers the goods. I believe that the Conservative Government were right to privatise the railways. The benefits of privatisation will be seen only over a number of decades because of the backlog of under-investment of a nationalised industry.
  I say that we did the right thing, but that does not mean that we got everything absolutely right. There are many areas where there can be improvement and systems need to be worked better. As we have heard in the debate, in various interventions, there is some division about whether the current system is safer than the previous system. The figures show that the current system is safer. However, we must all be concerned that our railways are not as safe as those in continental Europe. We should try to prevent any accidents. We must do far more in terms of safety.
  The Opposition have raised several concerns, especially about the interaction of the Rail Regulator and Railtrack and the fining network. That is one area where we should examine carefully whether the post-privatisation system is working as it should. It seems somewhat perverse that Railtrack is fined if it tries to repair certain stretches of railway, and the fine level suggested by the Rail Regulator has increased quite substantially. We have concerns about that, and that is why the other day we called for the new deal that the Rail Regulator announced to be risk assessed. The regulator has no direct role in terms of safety. That was our major concern.
  Overall, I think that privatisation has been successful. There was a 5 per cent. increase in passenger journeys between May 1997 and September 1999, with rail patronage now the highest in 40 years. Domestic rail
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  freight increased by 15 per cent. in two years. More than 1,300 more trains are being run daily to meet increased demands. Since 1997, 13 new stations and more than 50 new freight terminals have opened. Rolling stock worth £1.95 billion has been ordered for delivery by 2002. There were 480 safe station car parks on the national rail network with CCTV or video surveillance by the end of January 2000. Much progress has been made, but much more still needs to be done.
  London Underground caters for 3 million trips per week day, including journey-to-work trips made by 35 per cent. of those in central London. About 90 per cent. of tourists use the tube during their stay in London. It generates more than £1.1 billion in fare revenue annually. With 3,954 railway cars travelling on more than 1,140 km of track, the underground now carries more passengers than the entire rail network in the UK. It is undoubtedly the only real method of rapidly transporting large numbers of people round London.
  It is important to get things right. That is desperately important for our capital. My hon. Friend the Member for Buckingham (Mr. Bercow) made it clear that when the previous Conservative Government left office, investment in the underground was substantially more than it is now. This year, the tube will receive £753 billion, which is a substantial reduction on the £1,035 billion that the Conservative Government were investing in 1996–97. Part of the problem is that the tube needs a great deal more investment. The delays and the Government's decision to go for such a convoluted public-private partnership have contributed to the rundown of the network.
  In the Labour party 1997 election manifesto, the Prime Minister promised London:
  Labour will improve the Underground and guarantee value for money for taxpayers and passengers.
  However, the Government are unlikely to deliver on that with the plans they have set out. Labour's PPP has been described as
  half baked and either naive or dishonest
  by The Economist; a "convoluted compromise" by the Select Committee on the Environment, Transport and Regional Affairs; and
  towards the bottom of the list of options
  by Peter Ford, a former chairman of London Transport. It has not had the rave reviews that the Government would have wanted. The privatisation will be botched. My concern is that they will give privatisation a bad name, as they have with NATS.
  Proposals for the tube include a one-off finance deal for a 30-year period to fund the investment and maintenance backlog. That cannot finance route extensions and new lines, which a privatised underground would be able to do. London Underground will still be run by a single state-owned company, and investment decisions will be dictated by politics. The nationalised industry culture will remain and there will be few incentives for higher standards and innovation. Furthermore, Maurice Fitzpatrick, head of economics at Chantrey Vellacott DFK, has estimated that fares will have to rise by 30 per cent. under Labour's botched privatisation. That is hardly value for money. At the start of the year, fares for a single journey in zone 1 increased by 7 per cent., but people have not seen much improvement in the service.

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  We want fully to privatise the underground, and we want to issue shares to generate badly needed funds for investment. We are also keen to give shares to Londoners, members of staff and season ticket holders, so that we give the tube back to Londoners. It is important that we get the policy right. Privatisation is one way in which we could improve the tube. It would certainly reduce traffic congestion in our capital. The Jubilee line—a fine Conservative project—has air conditioning, and it has shown how important it is that whoever takes over the tube spends money on air conditioning for the system and on building new underground lines. We do not want to stick where we are; we want to improve the network substantially.
  The Conservative party is pragmatic. Conservatives believe in free enterprise. We are not ashamed of anything that we have done because we have delivered a more efficient economy. Its growth over the past few years—even under this Government—has, to a large extent, been due to the fact that it is more flexible and efficient, which is a result of many of the reforms introduced by the noble Baroness Thatcher and my right hon. Friend the Member for Huntingdon. Although we are concerned about the direction of the Government's policy on NATS, we are more concerned about their plans for the underground.
  We are not complacent about the railways. We appreciate that there is a long way to go to improve the network, but we still believe that the direction that we took was right. If the Government believed that we were wrong, they would have tried to change the structure that they inherited when we spent six happy months together debating all the clauses—all the bits and pieces—of the Transport Bill. Apart from the Strategic Rail Authority and the regulator, the Government have, on the whole, run the system as they inherited it because they have accepted that they can work with the system that the previous Government left them. The Conservative party will be constructive. We certainly want to improve the safety record and, if the Government do what is right, we will back them.
  8.54 pm
  Mr. Geraint Davies: I am pleased to return to the House after a week of paternity leave. A week ago, in the midst of a storm, my wife gave birth to a daughter. For that reason, my mood is naturally one of benevolence towards the Liberal Democrats, and I would have loved to agree with the sentiments expressed in their motion but for three reasons: the motion is opportunist, it is irresponsible, and it is financially incoherent.
  The proposals that we are discussing must be seen in the context of Labour's 10-year plan for an extra £180 billion of investment in our transport infrastructure, to build a new integrated transport infrastructure for Britain. If I may put it simply, £56 billion of that will be private money that is being levered in by private-public partnership. The first question to the Liberal Democrats must be, where will that £56 billion come from? Will it come from another 2p on income tax?
  While I am on the subject of financial incoherence—
  Mr. Michael Moore: I am sure the hon. Gentleman is prepared to
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  acknowledge that the £56 billion of private investment is not spelt out in detail anywhere in the Government's proposals. Surely it is an indicative sum, with no backing whatever.
  Mr. Davies: As I proceed, I shall isolate specific amounts of private-sector investment. Perhaps the Liberals will let us know where they would get the money.
  As well as the extra 2p on income tax that the investment would inflict on the public, we must bear in mind the recent Liberal U-turn on fuel tax. Only a year or so ago, the Liberal Democrats were saying that their promised extra billions of expenditure would be predicated on environmental taxation, especially fuel taxation. They now say that for five years there will be a freeze on fuel duty, irrespective of the world price of oil. If the world price of oil falls from its current level of $34 a barrel to $10, and everyone suddenly starts driving more and doing a lot of environmental damage, the Liberals will apparently retain the freeze. That is sheer opportunism, and I fear that the leader of the Liberal party is on the waiting list for a spine transplant.
  Mr. Don Foster: It does the House a great disservice to misrepresent the position of any political party. I know that the hon. Gentleman missed a debate on this subject, but he will, I hope, be well aware that the Liberal Democrats have changed their policy because they have now found better ways of targeting the key issues of congestion and pollution. When a better way can be found, it is sensible to change.
  Given that we have changed, it is interesting to note that all independent commentators say that only the Liberal Democrats have transport policies that are likely to solve the country's transport difficulties.
  Mr. Davies: That is false. In fact I did attend the debate that the hon. Gentleman mentioned, and I ask him to set the record straight.
  If, for argument's sake, the world price of oil dropped to $10 a barrel in two years' time, would the hon. Gentleman's policy enable him to increase fuel duty? I think the answer is no.
  Liberal policy is based on the assumption that fuel duty will not change, irrespective of the world price of oil. As I have said, that is an incoherent and opportunist position; what is more, it shoots a big black hole in the Liberal finances, ripped even deeper by the latest proposition that private money—it seems—is dirty money in today's Britain. That is an outdated and outmoded view.
  Mr. Foster: I do not wish to go into the difficulties experienced by the hon. Gentleman and his party when the Prime Minister is not even prepared to support such moves as congestion charging. I simply ask the hon. Gentleman this: if on Wednesday the Chancellor of the Exchequer announces proposals to freeze fuel duty, as is widely predicted in the newspapers, will the hon. Gentleman vote against the Chancellor?
  Mr. Davies: I will not support the proposal to freeze fuel duty for five years regardless of the global price of oil, as that would be foolish. I accept that my right hon. Friend the Chancellor may, in the short term, choose to

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  freeze duty or change it in any way that he sees fit. However, he will give himself the flexibility to alter our tax position in the light of world conditions, the environmental threat and problems faced by this country. People listening to our debate should be aware that while we have slightly higher fuel duty than the rest of Europe, we have much lower tax overall. Our tax position is correct, not the European one. We will find that harmonisation is moving towards the Labour way, not the running-scared Liberal Democrat way.
  As for privatisation versus PPP, it has been suggested that privatisation and the Government's position are precisely the same. I am a member of the Public Accounts Committee, which, in July 1999, received a report on the privatisation of our railtrack system, which took place just before the 1996 election and which, in my view, was an appalling act of robbery. The British taxpayer saw our railtrack system sold for less than £2 billion but, by July 1999, when we received the report, it was worth £8 billion. People will not witness that sort of situation under this Government. The Tories take the same position on the tube, and believe that we should sell it off cheap so that, before anyone knows it, the private sector owner will have jacked up prices and reduced the number of people who use the tube. That would serve neither the public purse nor the passenger and would be a Tory rip-off that, like the privatisation of the railways, would lead to a fragmented and incoherent shambles.
  We inherited such a position, which is why we introduced the Strategic Rail Authority, which has a co-ordinating role. We shall invest an extra £60 billion through our 10-year-plan, much of which will be private money. On the issue of PPP and Railtrack, hon. Members may not know that the SRA has 1 million shares in Railtrack. If there is increasing subsidy from the public sector, one wonders whether the public think that we should take a greater equity share in getting feedback and having a proper PPP. That should be part of the future debate about the restructuring of Railtrack, not least because a greater Government stake would enable Railtrack to borrow more money for investment from the City. A greater stake would mean less public investment and more investment from the private sector.
  Our debate is about how we maximise the leverage of private sector money in our transport infrastructure. That is a precondition for safety, as investment is the first thing that safety needs. The Liberal Democrat motion does not allow for the approach of trying to maximise partnership, investment and value for money for the taxpayer. The Public Accounts Committee will examine that matter when it looks at its options.
  Before coming to this grand place, I was the leader of the largest local authority in London and oversaw the introduction of Tramlink. I very much hope that you, Mr. Deputy Speaker, will come and visit Tramlink, which, in six months of operation, is already the most successful tram system in Britain. It is more successful than the system in Manchester and has levered in £100 million of private money, as well as £125 million of public money. Unlike the Jubilee line, which was heralded by the Tories as a great Tory success, Tramlink was not delayed for a year and billions of pounds over-budget because we managed the contract correctly. In fact, Tramlink was delayed, which shows that the public sector does not have a monopoly in delays. However, the cost of that delay—or the risk—was transferred to the private sector.
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  The issue is therefore about finding value for money and transferring risk. It is all very well for the hon. Member for Bath (Mr. Foster) to say that it is cheaper for the Treasury to borrow money, but is that so? One must look at cost and time overruns and consider their price. The matter is not just about the cost of capital, so the Liberal Democrat position is rather naive. There is a choice between Liberal Democrat dogma, Tory failure and the success of this Government.
  The first question that has to be asked is—I have been asking it throughout—do the Liberal Democrats rule out a public-private partnership? If they do not, what sort of PPP do they rule in? Then we are in a different debate.
  Someone asked me specifically for examples of extra cash. The channel tunnel is levering in an extra £3.3 billion, the tube £8 billion and National Air Traffic Services £1.3 billion. That is £12.6 billion. Where is that coming from? "Another few pence on income tax," is the normal response from the irresponsible Liberal Democrats.
  Then we get into, "We will not do that. We will take the Canadian trust model, we will do tube bonds or whatever." The Minister has made it clear that the Public Accounts Committee will analyse the value-for-money options objectively. As a member of that Committee, I am open-minded about the different vehicles. The issue is how to get the best value for money in the right amount of time to deliver the standards that the public demand after years of neglect from the Tories. It is about independent regulation, risk transfer and investment in safety.
  The next question that was posed is: can the private sector deliver safety? The dogmatic presumption of the Liberal Democrats was that private means unsafe because of profit-grabbing capitalists. We only have to compare British Airways with Aeroflot. What are the issues? They are investment and regulation, not simply ownership.
  After all, let us face it: one of the reasons why there is underinvestment in NATS is because the Tory Government had other priorities for expenditure. If they wanted to spend more on tax cuts, the national health service or whatever, they could squeeze NATS. PPP gives a guaranteed cash flow and certainty for investment. It enables NATS to invest in innovation in safety, rather than leaving the situation static.
  Air traffic is growing year on year at 6 per cent. To a great extent, the challenge in terms of safety is an information technology challenge: how do we get the computer systems, the IT technology, to manage the system? The question is: where are the skills in the marketplace? As a member of the PAC, I have seen many reports on public sector management of computer systems for national insurance, immigration or whatever. It is not a very good record. The skills are in the private sector. That is another reason why we need a PPP—to ensure investment, smart purchasing, smart operation and safety.
  Safety is a cost—it is true—but it is also a product for sale. It needs innovation. People who give me lectures but who have never been in a business in their life might not understand that.
  Again, it is about skills and technology. Who knows about that? What is the right structure? "How much public, how much private?" is not an a priori dogmatic question. It is an empirical question about what is right—what is the right mix in a certain situation. What can be tried and tested, rather than rejected through dogma from

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  the Tories, who say simply that private is right, public is wrong, or the Liberal Democrats, who also seem to have a dogmatic approach?
  This country is moving from years of neglect into a new era—£180 billion, a 22 per cent. real terms increase, of investment in rail, road and all our transport to deliver a modern, safe and integrated transport system for the new millennium. I support the Government's bid to do that.
  9.8 pm
  Mr. Tom Brake: It is a pleasure to follow the hon. Member for Croydon, Central (Mr. Davies). I am pleased that he has had a new child, but in that case, he might have followed what I believe is current Government policy and taken two weeks' parental leave, rather than one.
  It is my pleasure to focus on just one aspect of the debate: the part privatisation of London Underground. The tube is the lifeblood of our capital city. Just last week, a report by Business Strategies said that
  poor transport is jeopardising strong jobs growth in central London,
  so having a smooth-running tube is not optional. It is a vital service for Londoners and visitors to London. It needs to be safe, clean, affordable and reliable. The way in which London Underground is funded is vital in ensuring that those objectives are met.
  After 18 years of underfunding that left the tube with a £1.2 billion investment backlog, privatisation is the best option that the Tories can think of. Conservative Members' ideological commitment to privatisation is very reassuring. It shows that they are incapable of change, and that they will be flying the tube privatisation banner high as they lose their seats at the next general election.
  Privatisation will not work for the underground. It would be a repeat of the railways disaster. Gerald Corbett said that railway privatisation was designed
  to maximise the proceeds to the Treasury. It was not designed to optimise safety, optimise investment or, indeed, cope with the huge increase in the number of passengers.
  —and he should know about the effect of railway privatisation.
  In view of their priorities, we can only hope that Conservative Members never get their hands on our public services again. They have already made their intentions, including at least £8 billion of cuts nationwide, very clear. That amounts to a cut of £24 million in my London borough.
  If underground privatisation follows the Tories' past record of stunning business acumen, the underground will be sold off for much less than it is worth. As we have heard today, privatisation and undervaluation of Railtrack lost taxpayers £6 billion. Additionally, privatisation does not even guarantee that the private sector will invest in the tube. Railtrack has had to be dragged kicking and screaming to deliver its investment programme.
  Labour's public-private partnership may seem better than privatisation, but in an attempt to get the best of both worlds, Labour runs the risk of getting the worst of both. There are a number of problems with the public-private partnership. The Minister quoted the Industrial Society, but he did not quote its statement, as reported on BBC
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  news in September, that the Government's plans to modernise London Underground represent "poor value for money" and could put passenger safety at risk.
  The Government can no longer dismiss those safety concerns—
  Mr. Hill: The hon. Gentleman should read the whole report.
  Mr. Brake: The Minister should read it again.
  Fragmentation of the railway industry led to deteriorating communications. How can the Government guarantee that a similar break-up of London Underground will not lead to an identical breakdown in communications? We have heard nothing from the Minister on that point.
  PPP does not make sense financially. Glaister, Scanalon and Travers suggests that over a 30-year period, a bond issue would work out at about £80 million cheaper per annum. That would be a very significant saving.
  PPP could also cost travellers more. Under the Government's current expenditure plans, grant funding for London Underground is to be withdrawn and the underground is to be funded by fares revenue alone, with the possible exception of major extensions to the network. I have heard rumours that the Government may cave in and accept that grant funding will remain necessary in 2001–02 and beyond. If that is correct, I hope that the Minister will confirm as much, as it would set many Londoners' minds at rest. If he cannot give us that reassurance, the public-private partnership and the withdrawal of grant, taken together, could mean that investment costs are shifted even more on to passengers.
  Additionally, public-private partnership could mean that one of the problems with our tube system—affordability—is exacerbated. If fares continue to increase at current rates—the figure of 30 per cent. has been mentioned today—the tube will be out of the reach of many of London's citizens.
  PPP is also about standing still—maintaining and upgrading the current system and dealing with the repairs backlog, but ignoring the desperate need for expansion and new lines.
  The infrastructure charges that London Underground will have to pay to the PPP companies are expected to increase almost annually as more work is done on the network. Once contracts are signed, London Underground will have to meet those charges regardless of whether revenue increases. Responsibility for meeting any shortfall will rest, ultimately, with the Mayor and the Greater London Authority. The shortfall after two years of the operation of PPP has been estimated at around £175 million—a substantial sum.
  On accountability, Labour is to bring in a system that the GLA members—London's elected representatives—do not want. They will be the ones left to pick up the pieces if it all goes wrong.
  The Minister was worried earlier that he was not going to get his fix of Liberal Democrat public interest companies; he was wondering why no one had referred to them. I can reassure him that I am about to do exactly that. We believe that public interest companies provide a true alternative to the PPP fudge. Allowing those companies to raise their own capital, freed from the public sector requirement constraints, would provide a far

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  cheaper means of finance than the private sector—a point the Minister did not respond to. We will be happy to put up this proposal for analysis with the public sector comparator—something that the Government have still to use on PPP. Incidentally, their plans could still unravel at this very late stage.
  Public interest companies can work to public sector objectives; this has been done in New York. As we know, New York's successful tube supremo Mr. Kiley has been drafted in to London Underground. He must be somewhat disillusioned with his scope for action, as he is stuck with PPP. It is as if that other foreign import, the England team manager, had been asked to put together his best team but could only use left-footed players.
  With public interest companies, the tube would not lose all Government-supplied revenue, which would run the risk of raising ticket prices. Additional sources of future funding, such as congestion charging, could be used later to top up the investment fund. Public interest companies do not carry the safety problems caused by fragmentation into different parts—another point that the Minister did not respond to. He has not explained how he will address the risks of a fragmented system under PPP—risks that we have already seen following rail privatisation.
  Public interest companies would provide a financing system that truly would be in the public interest—bringing in desperately needed finance, but also safeguarding the public interest, not just businesses.
  The Minister talks about the delays that would arise if a public interest company if were introduced now. The PPP was expected to be completed in April this year, yet no contract has been signed for the two deep tube lines. For the sub-surface line, the fiasco of attempting to cobble together an agreement between London Transport and Railtrack—which many felt was anti-competitive—means that a deal is not expected until April 2001 at the latest, four years after the Labour Government came to power.
  The Government have inherited one of William Hague's Conservatives' least attractive features—obstinacy. However, it is not too late for the Government to abandon PPP—
  Mr. Deputy Speaker: Order. The hon. Gentleman should know by now that we do not refer to Members of this House in that way.
  Mr. Brake: Thank you for pointing that out, Mr. Deputy Speaker.
  It is not too late for the Government to abandon the public-private partnership. The Minister should think again, learn the lessons from railway privatisation, hear the voices of millions of Londoners and dump PPP.
  9.18 pm
  Mr. Geoffrey Clifton-Brown: The Liberal Democrats' motion is opportunist, and much of what the hon. Member for Bath (Mr. Foster) said was inconsistent with their own manifesto. If we compare the manifesto with what he said tonight, we will see whether this is a case of the Liberals being consistent—or, as usual, facing both ways at the same time.
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  In the manifesto, the Liberal Democrats said that they would
  retain London Underground in public ownership and give it the right to seek private finance for new investment without an assured government guarantee.
  We have not heard much from them today about how they propose to bring in the £7 billion that the Government will raise on the public-private partnership for London Underground. The hon. Member for Carshalton and Wallington (Mr. Brake) criticises the lack of investment in London Underground without giving us any clues about how his party proposes to raise the money.
  The Liberal Democrats said that they would
  Treble the freight and double the number of passengers carried on Britain's railways by the year 2010.
  Again, they did not tell us how they would raise the money. They vaguely said that they would
  require Railtrack to meet targets for greater investment and increased passenger and freight traffic
  but we heard nothing from their spokesman about what that really means. It is pure words.
  The only point in their manifesto with which I can agree is when they said that they would
  strengthen the powers of the rail regulators.
  I must give the Government credit: the Strategic Rail Authority brings into one pot a number of different authorities, and that is badly needed for the railways. However, I will not let the Government entirely off the hook on safety, to which I shall return.
  The Liberal Democrats said that they would
  withhold public subsidies from Railtrack if the targets are not met.
  Goodness knows what that will do. It will surely make matters worse. If Railtrack cannot increase its own investment and there is no public subsidy, the railways will suffer.
  The motion is opportunistic and the Liberal Democrats have failed to explain their policies, but this is still an important debate, in which we must get one or two facts on the record. Much has been made of the failure of my party's privatisation of the railways. Let us look at the facts. Between May 1997 and September 1999 there was a 5 per cent. increase in passenger journeys, and we now have the largest number of passenger journeys on the railways for 40 years.
  Privatisation can hardly be called a failure if we have that record number of passengers—which has, of course, given rise to some of the problems that we now face. The rails are simply not standing up to the huge increase in traffic, and are suffering from metal fatigue. We want to encourage more freight and passengers onto the railways, but we must be extra vigilant on safety.
  Despite what the Liberal Democrats want, domestic rail freight increased by 15 per cent. in the two years to March 1999, to a record 17.4 billion tonnes moved. There are 1,300 more trains being run daily to meet increased demand since privatisation. Since 1997, 13 new stations and more than 50 new freight terminals have opened and £1.95 billion of rolling stock has been ordered. That is not a bad record.
  The Government claim the credit for increased investment in the railways, but in the next breath they

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  criticise us for privatising them. They cannot have it both ways. Their own spokesman, Lord Macdonald, said:
  I acknowledge readily that credit must be given to the railway industry for the advances made in safety management in recent times. Indeed, the number of signals passed at danger has been reduced significantly. I am pleased that Railtrack felt able to announce earlier this month that the number of broken rails in the half year in question, compared with the previous period, had declined by 32 per cent.—[Official Report, House of Lords, 19 October 2000; Vol. 617, c. 1201.]
  To listen to some of the scaremongering, one would think that the whole system was falling apart.
  Caroline Flint: The hon. Gentleman acknowledged that many of the achievements that he cited have happened since 1997. Does he agree that the new Labour Government brought a different ethos and attitude, and that the combination of encouragement and pressure for improved standards and better and more frequent services has come from this Government, and not from the Conservative Government, whose tactics were simply to privatise?
  Mr. Clifton-Brown: The Government have been able to build on the investment put in by Railtrack to improve the railways as I described. That simply would not have been possible under the old public sector ethos. We all remember the dirty and delayed trains under British Rail. The system was crumbling and getting worse by the year. Now at least we are getting significant sums invested in the railways, which is exactly what they need. I am very grateful to the hon. Lady for bringing that out.
  I follow the hon. Member for Carshalton and Wallington in echoing my concerns for the people of London, the tourists and others who use the London underground system. There is a significant problem—we all acknowledge that London Underground has been suffering from underinvestment for many years. What worries me is that the Government have planned for a huge amount of income from the public-private partnership, yet it seems that there will be a considerable delay if ever they manage to get the scheme off the ground. Their own figures prove that: last year London Underground received £338 million in public sector grants, while this year the figure is only £89 million, and next year it is planned to be £102 million. I suggest that the reason for those significant reductions is that the Government were planning for the income to come from the public-private partnership. If that money is not forthcoming, and if the public subsidy drops, the passengers of London Underground will continue to suffer considerably more pain yet before things get better—if they ever get better under this Government.
  Whatever happens, I call on the Government to get on with their public-private partnership. We would prefer a full privatisation, but whatever the outcome, there needs to be a significant increase in investment in the London underground system for all the passengers who travel on it. I have travelled on it recently—[Interruption.] I have travelled on it ever since I was a small child. I remember when I was five years old being stuck on the underground for two and a half hours with my mother. That was in the 1958 floods, as it happens—but not many people can remember that far back. That demonstrates that we need
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  more investment. I hope that the Minister who replies to the debate will be able to explain what will happen in the interim before the money comes in from the public-private partnership.
  The privatisation of National Air Traffic Services is also an important part of the debate. How will the Government fund the £300 million needed for the new investment at Prestwick? Everybody who is involved with air traffic control agrees that the facility at Prestwick is urgently needed. As I understand it, the Government were relying on the proceeds of the NATS privatisation for that £300 million. When are the Government confident of getting the Bill through the House, and when are they likely to receive the money from the NATS privatisation? Will that pay for the Prestwick facility, and can they give an assurance that it will be built on time?
  Ms Sandra Osborne: Is the hon. Gentleman aware that the previous Government's plans for a private finance initiative delayed the Prestwick centre by several years?
  Mr. Clifton-Brown: This Government have been in power for almost four years. They have had more than sufficient time to sort out any problems regarding Prestwick. The previous Government introduced the PEI for the new facility at Swanwick, and that facility will come on stream, as the Minister said, by the end of 2001 or the beginning of 2002. I am quite certain that had the Conservative party been elected by the British people in 1997, we would have sorted out the problems and the hon. Lady would have had the facility in Prestwick by now. I do not think that there can be too much criticism there.
  What do the Government propose to do about the golden share? The Minister said quite emphatically that this was not a privatisation. However, the Government are selling off 46 per cent., with another 5 per cent. being sold to the employees. They are keeping a golden share and retaining 49 per cent. Is that compatible with European law? Will the European Commission allow the Government to keep the golden share? If not, they may have to sell off a majority stake. In that case, as my hon. Friend the Member for Poole (Mr. Syms) said, how can they prevent a French company from purchasing NATS?
  I should also like the Minister to tell us whether the Government are in favour of the European skies policy, and how it will affect the public-private partnership of NATS. That policy has not been mentioned this evening. [Interruption.] If the Minister would listen instead of laughing and talking all the time, he might learn something. That policy is of considerable concern to the military, which will not, as it does now, have reserved airspace over Europe, and which is worried about operational safety.
  The Liberal Democrats, who tabled this evening's motion, favour some sort of bond issue.
  Mr. Don Foster: Some have.
  Mr. Clifton-Brown: Are the Liberal Democrats in favour of a bond or not? My understanding was that they were. PricewaterhouseCoopers, the well known firm of accountants, has estimated that assuming an AA rating—if that can be assumed—a bond issued by London transport would have to pay 1.2 per cent. more than a

  117
  Government gilt. If one has to pay over the odds to issue a bond, why not let the Government borrow the money in the first place? Even better, the money could be raised far more cheaply by privatising London Underground and relieving the pain that commuters on the underground have to suffer under this Government. At the next election, the commuters of London will give their verdict on having had to suffer that pain.
  9.31 pm
  Ms Margaret Moran: I have listened to some of the debate with increasing incredulity, partly because the Liberal Democrat motion does not distinguish privatisation from public-private partnerships. Conservative Members claim credit for the improvements in rail usage, saying that it results from privatisation. That is fantasy. The reality is that privatisation left the legacy of disinvestment and disrepair in our railways that we have all seen in the past few weeks. The Government's determination and pressure has resulted in increased rail use and greater investment by Railtrack.
  Let us get the facts straight. We inherited from the previous Government a huge investment backlog, ever increasing traffic, crumbling roads and 20 years of public transport neglect. Rail privatisation broke the network into 100 parts, and we know that it was a bad deal for taxpayers. Between 1986 and 1996, the proportion of public transport journeys fell by 11 per cent. and the number of car journeys increased by 21 per cent. Bus journeys outside London fell by 31 per cent. in the last 10 years of Conservative Government, who left us with a funding backlog of £1.2 billion for London Underground.
  Comments that Railtrack's increased investment was due to the legacy of privatisation do not bear scrutiny. By May 1997, Railtrack was £700 million behind in its rail investment and maintenance programme and—day by day, week by week—we see the effects of that legacy. The proportion of freight carried on our rail system has decreased; congestion on our road has grown by 66 per cent., and there are 70 more cars per mile of road since 1979.
  Conservative Members have elaborated a fantasy; it is a myth to suggest that privatisation has somehow enhanced the experience of the travelling public and those who use public transport and our railways. Let us consider what was the intention of the Tories. In 1994, the right hon. Friend the Member for South Norfolk (Mr. MacGregor) said:
  Increases in fuel duty, and motorway tolling, will help people to make … informed choices—[Official Report, 30 March 1994; Vol. 240, c. 930.]
  We were told:
  Private enterprise given its head to build toll roads could get Britain back on the move.
  That is what Conservative Members told us then. Their agenda is purely one of privatisation, and their call for the privatisation of London Underground does them no credit.
  The Liberal Democrats argue that we should not take the public-private partnership route, but their approach contains a significant gap of £56 million in public transport investment. Where do they intend to find £8 billion for London Underground, £3.3 billion for the channel tunnel rail link and £1.3 billion for the National Air Traffic Services? Those sums would be needed for a significant improvement in our public transport system,
  118
  and they would have to come from private sector investment. That approach is similar to the usual Liberal method of funding: it involves fairy-tale politics and returns us to the 1p—the longest 1p in history—or, in this case, 2p or 3p, on income tax.
  I shall recount two examples, with which I have been directly involved, that show how PPPs can work well. The first involves the docklands light railway extension to Lewisham. Lewisham council, of which I was leader, joined with the private sector—we produced money from our resources in local government and from central Government—to extend that railway to Lewisham. That brought significant benefits, including reduced risk, on-time delivery of the network and regeneration of the local economy in Lewisham. I am proud to have been involved in that PPP. The extension brought immense benefits to a part of south-east London that has suffered severe transport difficulties, not least because of the appalling rail service that goes through south London to Lewisham.
  My second example is London Luton airport, which I am pleased to have in my constituency. I want to put the record straight—a PPP will not undermine the safety of airways. London Luton airport has never been run through NATS; nor were other airports, including Birmingham, and Sheffield. More airports are run under private arrangements than are covered by NATS. Do the Liberal Democrats truly believe that the skies over those airports are unsafe? That is nonsense.
  If we had not entered into a PPP for London Luton airport, the massive increase in passenger throughput during the past few years would not have occurred. Significant investment in a new air terminal and rail interchange has brought life to the notion of an integrated transport policy. The Government advocated and implemented that approach—a combination of commitment and investment and a determination to lever in private sector investment that would not otherwise have been available. [Interruption.] Despite the protestations of an Opposition Member from a sedentary position, Luton airport benefited significantly from a PPP. The airport has increased its passenger throughput by several million; the figure should rise to 5 million during the next few years.
  Mr. Clifton-Brown: Will the hon. Lady give way?
  Ms Moran: Time does not permit me to accept an intervention.
  Mr. Clifton-Brown: I gave way to the hon. Lady.
  Ms Moran: The hon. Gentleman did not give way to me, and time does not allow me to give way to him. I hope that I will be able to let him intervene another time.
  For every million passengers who pass through the airport, 1,000 extra jobs are created in my constituency. That is good news in terms of investment and new infrastructure, and it is excellent news for the travelling public, my constituents' employment and the local economy. The evidence clearly shows that PPPs work. The airport is retained under local authority control, but with a PPP that enabled the investment to occur. The effort will continue during the next few years.

  119
  Those are just two examples of the benefits that PPP can bring to our transport system and to our local economies. I wish that Liberal Democrat Members were a little more clear-headed as to the difference between privatisation and PPPs. The way in which they intend to end PPPs does them no service whatever.
  9.40 pm
  Mr. David Rendel: I am grateful for the opportunity to make a few, brief points in relation to the closing words of our motion, on the dogmatic privatisation of public services in general.
  No one has yet mentioned the health service. In my constituency, it is of considerable concern because our lovely, new cottage hospital, which is just about to be built, will be of the type that deals only with minor operations and day surgery. We have heard from several Conservative Front-Bench spokesmen that, in future, such procedures will be carried out only in the private sector. That means that the privatisation of the new hospital in Newbury would be almost inevitable, were the Conservatives ever to come to power again.
  That is a considerable worry to my constituents. I hope that Ministers agree that if that were to happen, it would be simply awful and that, if the Conservatives continue with that policy, they deserve to lose every vote in west Berkshire.
  9.41 pm
  Mr. Michael Moore: The debate has been interesting—except for those of us who served on the Transport Bill Standing Committee, for whom it has merely been a repetition of many, old arguments. Although Liberal Democrats might have been accused of opportunism on a few occasions, such accusations come ill from members of two parties that have shifted position so quickly—albeit in a heavy-footed way—during the past few years and especially during the past few months.
  I shall focus on the privatisation of NATS. There is mounting public concern about privatisation in the transport sector. As there is raging uncertainty across the sector, the ill-conceived plans to privatise air traffic control should be scrapped. There is no public support for the proposal and little need for the Government to sell any NATS shares.
  Frequently, the Government advance their case for privatisation by highlighting investment requirements and the need both to involve private sector expertise and to separate safety regulation from practitioners. As we have often pointed out, we do not dispute those objectives but the route proposed to achieve them.
  Our proposal for an independent, publicly owned corporation or trust satisfies each of those requirements, but—crucially—retains public sector control. That means that it will retain public confidence.
  Since our previous debate on NATS privatisation, two significant developments have occurred. First, the Civil Aviation Authority produced proposals for the regulatory regime after privatisation. Secondly, the shortlist for the strategic partner has been published and has already been whittled down.
  120
  Our central concern about the privatisation of air traffic control is the nature of the market in which NATS operates. Competition—rightly—does not exist and revenue is heavily regulated; thus profit-driven corporations will be forced to cut costs to deliver their objectives. Cutting costs sits uneasily beside the paramount importance of safety. That is at the heart of public concern about the privatisation of NATS.
  It is especially alarming that the first attempt by the CAA to set out a post-privatisation regime for economic regulation of air traffic control has been condemned by NATS itself. NATS described the proposals as "totally inappropriate", not least because
  the severe cuts in operating costs and investment are inconsistent with the proper carrying out of its functions—
  especially its—
  prime duty … the safe provision of air traffic control.
  The criticism is breathtaking—in civil-service-speak, perhaps even brave. Equally breathtaking is the silence that followed. To date, there has been no ministerial comment and no resolution of the conflict at the heart of privatisation. How can any bidder seriously prepare to take on the role of strategic partner next March when the market rules after privatisation are still unknown? It is a real mess.
  We now know the final three bidders in the beauty contest to become NATS' strategic partner. The list of bidders exposes the serious problems at the heart of the NATS privatisation proposal. I shall briefly highlight the conflicts of interest that each bidder involves.
  Novares is a partnership principally between Lockheed Martin and the Airways Corporation of New Zealand. Lockheed Martin is a huge multinational corporation with many different interests but, as we know, it is the prime supplier at Swanwick and it is believed to have lost between £150 million and £300 million through the delay and ineffective control of that project. It has more recently won the contract for the new Scottish centre, and the blunt truth is that it has a great interest in controlling the paymasters of that project. The Airways Corporation of New Zealand is an overseas air traffic control outfit which has also run into controversy recently, because it has changed its two-centre strategy—which has been the core of many concerns, not least in Scotland—to a one-centre strategy with very little public support.
  Nimbus is another bidder and one of the main components of that, Aeronautical Radio Inc.—ARINC—is an equipment supplier for NATS and falls foul of the same conflicts of interest as Lockheed Martin.
  The final consortium is the Airline Group. It is interesting that it specifies that it is a not-for-profit organisation. Perhaps that reveals what it thinks of bringing the profit motive into this sector. However, it cannot escape from the basic reality that eight airlines—including British Airways, Virgin and British Midland—are in the consortium and that they generate the vast proportion of NATS' revenue. It is no wonder that they want to get their hands on it if it is to be privatised. Sitting beside the airlines as advisers are three air traffic operators from overseas. They are all on board, but it is not clear what relationship they would have with NATS after privatisation. In particular, we do not know the implications that there might be for national security. It would be helpful if the Minister could tell us what the Ministry of Defence says about that.

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  Our motion rightly condemns the dogmatic pursuit of privatisation in public services while the Government amendment
  welcomes the Government's policy of developing Public Private Partnerships for National Air Traffic Services and the London Underground.
  However, bereft of principles and bereft of arguments, the Government have raised pragmatism to the status of the dogma, doggedly pursuing an agenda out of touch with public opinion.
  In the privatisation of air traffic control, the bidders are riddled with conflicts of interest. NATS does not believe that the Civil Aviation Authority's proposals will work and the public have no confidence in the plans. They should be scrapped.
  9.48 pm
  The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Chris Mullin): This has been an interesting debate. I am not sure that those of us who are veterans of proceedings on the Transport Bill have heard many new arguments, but we have heard one or two old arguments presented in a slightly different way.
  As I listened to the hon. Member for Bath (Mr. Foster) huffing and puffing about the wickedness of privatisation, the thought idly passed through my mind that there might have been no privatisation at all if the Liberals had not voted with the Tories to bring down the Callaghan Government in 1979. I hope that the House will forgive a little trip down memory lane, but the hon. Member for Poole (Mr. Syms) took us back as far as Beatrice and Sidney Webb, so I thought that I would chance an outing back to 1979. We all change but, at that time, the Liberals preferred a Government led by Mrs. Thatcher to a Government led by Mr. Callaghan. That had consequences that we can all vividly recall.
  I am opposed—and so are the Government—to the dogmatic pursuit of privatisation in the public services. Such a pursuit of privatisation was a characteristic of the previous Government. I exempt the hon. Member for Poole since, as he explained, he is pragmatic. Most members of the previous Government believed as a matter of principle that the public sector was bad and the private sector was good—and some of them said so in such stark terms. Tory Ministers believed at the time that privatisation was a panacea, and that has led us to all sorts of problems—not least the mess following privatisation of the railways that they have left us to clear up.
  The Government's approach has been entirely different—[Interruption.] Stay with me. We are seeking to combine the strongest features of both the public and private sectors. We want to work together for the public good.
  Mr. Don Foster: It says here.
  Mr. Mullin: Yes, it does say here; I wrote it.
  As the Under-Secretary said in his opening remarks, the public-private partnerships that we are putting together for the London Underground and National Air Traffic Services represent carefully devised, appropriate and pragmatic—yes, there is that word again—solutions to problems that have arisen from years of under-investment and poor project management in the two services.
  122
  The Government will retain a major stake in NATS, allowing it to retain a significant degree of influence over the management of the business. If the hon. Member for Bath will forgive me for saying so, he made several irresponsible points about safety. Safety, far from being undermined, will be enhanced. It will remain with the public sector—the Civil Aviation Authority—and will be entirely separate from day-to-day operational control. As for London Underground, strategic control will remain with the public sector, reporting to the Mayor. In 30 years' time, the assets, far from being permanently privatised, will revert to the public sector.
  The advantage of a public-private partnership is that it is the best way in which to lever in private sector investment and project-management expertise while preserving the safeguards that the travelling public rightly demand. Various alternative models have been proposed. The Government have examined them all and concluded that PPP is superior.
  The main alternative—I am sure that it is one that would find most favour on the Liberal Democrat Benches—is for the Chancellor to write out a cheque. I have lost count of the number of times during the past three years that the Liberal Democrats have spent their extra penny on income tax—a point made by my hon. Friends the Members for Croydon, Central (Mr. Davies) and for Luton, South (Ms Moran). We have not heard so much about it recently. Now they want to help the Chancellor spend his surplus—a surplus, incidentally, that he would not have had but for his sound management of the economy.
  As you may have noticed, Mr. Speaker, the Chancellor has not been short of advice from a variety of quarters in the past few weeks on how he might spend his surplus. Even the right hon. Member for Kensington and Chelsea (Mr. Portillo) has been at it. He wants tax cuts and more public spending. Well, life is not like that. It is folly to pretend that everyone can have more of everything.
  The plain truth is that if we are to cope with all the demands for more investment in public services, we must make some choices. Where investment can be raised from the private sector without jeopardising the public interest, it makes sense to do so—quite apart from which we need some of the private sector project-management skills that some parts of the public sector so obviously lack.
  I turn to some of the points made in the debate. My hon. Friends the Members for Shipley (Mr. Leslie) and for Luton, South rightly pointed out the little-known fact that, at more than 30 small and medium-sized airports around the country, air traffic control is in private hands, and has been so for many years. We have all been landing and taking off at those airports without even noticing the fact—whether it be at East Midlands, Bristol, Luton or Newcastle airport, where I took off this morning. If it were true that only the state can manage industries where safety is essential, we would all travel on Aeroflot rather than British Airways. [Interruption.] I know that that is an old joke, but I am sure that not everyone has heard it before.
  The hon. Member for Poole made a thoughtful speech. He comes from the civilised wing of his party and is not one of the true believers who sit on the Conservative Back Benches, not that there are many of them present tonight. He said that the Conservative party is pragmatic—he can say that again. Had he attended our previous debate,

  123
  he would have heard his hon. Friend the Member for Teignbridge (Mr. Nicholls) call for the restoration of the link between earnings and the state pension—a link that the Conservative party broke many years ago. That is pragmatism for you.
  The hon. Member for Poole asks whether March 2001 was still the date for the sale. Yes, the Government intend the sale to go ahead on that date. He asks whether we intend to reverse the Lords amendment relating to pensions. Yes, the position of existing employees is already adequately protected. He asks about overseas ownership, and the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) mentioned the three companies on the final shortlist. We do not accept the argument that only a British strategic partner can be the right one. The right partner will be the one that provides the best solution and future for NATS; that is the basis on which we shall assess the bids. Incidentally, we have some plans to protect the Tory party from foreign ownership: part IV, chapter II of the Political Parties, Elections and Referendums Bill will prevent foreign donations, and not before time.
  The hon. Member for Poole made a serious point about safety. He expressed concern about the interaction between the rail regulator and Railtrack and about the fact that Railtrack could be fined for not meeting punctuality targets and for delays to trains. We recognise the seriousness of that issue, so we have asked Sir Alastair Morton to consider with the industry the contractual and regulatory regime. The framework was created at the time of privatisation, but we shall have to consider what revision is needed.
  The hon. Gentleman asked what effect a delay to the PPP of the sort proposed by the Lords would have. We intend to reverse that Lords amendment. Were it to stand, it would jeopardise the PPP.
  Ms Osborne: Will my hon. Friend confirm the implications for the new Scottish centre of the Lords amendment standing and the NATS' PPP being delayed until after the general election?
  Mr. Mullin: As I say, the programme for the new Scottish centre, which, after initial difficulties, is now going quite well, would be jeopardised.
  The hon. Member for Carshalton and Wallington (Mr. Brake) quoted the Industrial Society report and suggested that it said that passengers would be put at risk. In fact, the report stated that the society did not subscribe to the view that the PPP was inherently unsafe, and it welcomed the Government's efforts to ensure that safety was kept in public sector control.
  The hon. Member for Cotswold (Mr. Clifton-Brown) asked whether the Government were confident of being able to retain a golden share. Yes.
  In conclusion, the Government have no desire to repeat the mistakes of Conservative privatisations, in which public assets were simply looted. Our aim is to channel badly needed private sector funding and management skills into our transport infrastructure for the benefit of all. Ours are not the "flog it and forget it" exercises that
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  the Conservatives continue to advocate. We are retaining a significant Government presence precisely for the purpose of protecting the public interest.
  The London Underground PPP enables us finally to reverse the historic decline of the tube. It offers billions of pounds of investment—
  Mr. Tyler rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly, That the original words stand part of the Question:—
  The House divided: Ayes 43, Noes 272.

  Division No. 319]

  [10 pm

  AYES

  Allan, Richard

  Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

  Baker, Norman

  Ballard, Jackie

  Livsey, Richard

  Berth, Rt Hon A J

  Llwyd, Elfyn

  Bell, Martin (Tatton)

  Maclennan, Rt Hon Robert

  Brake, Tom

  Michie, Mrs Ray (Argyll & Bute)

  Brand, Dr Peter

  Moore, Michael

  Breed, Colin

  Morgan, Alasdair (Galloway)

  Burstow, Paul

  Oaten, Mark

  Cable, Dr Vincent

  Öpik, Lembit

  Campbell, Rt Hon Menzies (NE Fife)

  Rendel, David

  Russell, Bob (Colchester)

  Chidgey, David

  Sanders, Adrian

  Cotter, Brian

  Stunell, Andrew

  Davey, Edward (Kingston)

  Taylor, Matthew (Truro)

  Foster, Don (Bath)

  Thomas, Simon (Ceredigion)

  George, Andrew (St Ives)

  Tonge, Dr Jenny

  Gidley, Sandra

  Tyler, Paul

  Hancock, Mike

  Webb, Steve

  Harris, Dr Evan

  Wigley, Rt Hon Dafydd

  Harvey, Nick

  Willis, Phil

  Hughes, Simon (Southward N)

  Tellers for the Ayes:

  Jones, Nigel (Cheltenham)

  Mr. David Heath and

  Keetch, Paul

  Sir Robert Smith.

  NOES

  Adams, Mrs Irene (Paisley N)

  Bradley, Keith (Withington)

  Ainger, Nick

  Bradley, Peter (The Wrekin)

  Ainsworth, Robert (Cov'try NE)

  Bradshaw, Ben

  Alexander, Douglas

  Brinton, Mrs Helen

  Allen, Graham

  Browne, Desmond

  Anderson, Donald (Swansea E)

  Burden, Richard

  Anderson, Janet (Rossendale)

  Burgon, Colin

  Armstrong, Rt Hon Ms Hilary

  Butler, Mrs Christine

  Ashton, Joe

  Campbell, Alan (Tynemouth)

  Atherton, Ms Candy

  Campbell, Mrs Anne (C'bridge)

  Atkins, Charlotte

  Campbell, Ronnie (Blyth V)

  Austin, John

  Campbell-Savours, Dale

  Banks, Tony

  Caplin, Ivor

  Barnes, Harry

  Casale, Roger

  Barron, Kevin

  Caton, Martin

  Battle, John

  Cawsey, Ian

  Beard, Nigel

  Chaytor, David

  Beckett, Rt Hon Mrs Margaret

  Clark, Rt Hon Dr David (S Shields)

  Bell, Stuart (Middlesbrough)

  Clark, Paul (Gillingham)

  Benn, Hilary (Leeds C)

  Clarke, Charles (Norwich S)

  Benton, Joe

  Clarke, Eric (Midlothian)

  Bermingham, Gerald

  Clarke, Rt Hon Tom (Coatbhdge)

  Berry, Roger

  Clarke, Tony (Northampton S)

  Best, Harold

  Clwyd, Ann

  Blackman, Liz

  Coffey, Ms Ann

  Blizzard, Bob

  Coleman, Iain

  Blunkett, Rt Hon David

  Connarty, Michael

  Boateng, Rt Hon Paul

  Cook, Frank (Stockton N)

  125

  Cooper, Yvette

  Jones, Mrs Fiona (Newark)

  Corbett, Robin

  Jones, Helen (Warrington N)

  Corston, Jean

  Jones, Martyn (Clwyd S)

  Cousins, Jim

  Jowell, Rt Hon Ms Tessa

  Cranston, Ross

  Kaufman, Rt Hon Gerald

  Cryer, Mrs Ann (Keighley)

  Keeble, Ms Sally

  Cummings, John

  Keen, Alan (Feltham & Heston)

  Cunningham, Rt Hon Dr Jack (Copeland)

  Keen, Ann (Brentford & Isleworth)

  Kemp, Fraser

  Cunningham, Jim (Cov'try S)

  Kennedy, Jane (Wavertree)

  Dalyell, Tam

  Khabra, Piara S

  Darling, Rt Hon Alistair

  Kidney, David

  Davey, Valerie (Bristol W)

  King, Ms Oona (Bethnal Green)

  Davidson, Ian

  Kumar, Dr Ashok

  Davies, Geraint (Croydon C)

  Ladyman, Dr Stephen

  Davis, Rt Hon Terry (B'ham Hodge H)

  Lammy, David

  Laxton, Bob

  Denham, John

  Lepper, David

  Dobson, Rt Hon Frank

  Leslie, Christopher

  Doran, Frank

  Levitt, Tom

  Drew, David

  Lewis, Terry (Worsley)

  Eagle, Angela (Wallasey)

  Liddell, Rt Hon Mrs Helen

  Eagle, Maria (L'pool Garston)

  Linton, Martin

  Edwards, Huw

  Lloyd, Tony (Manchester C)

  Efford, Clive

  Love, Andrew

  Ellman, Mrs Louise

  McAvoy, Thomas

  Ennis, Jeff

  McCabe, Steve

  Etherington, Bill

  McCafferty, Ms Chris

  Field, Rt Hon Frank

  McDonagh, Siobhain

  Fisher, Mark

  Macdonald, Calum

  Fitzpatrick, Jim

  McGuire, Mrs Anne

  Fitzsimons, Mrs Lorna

  McIntosh, Miss Anne

  Flint, Caroline

  McIsaac, Shona

  Flynn, Paul

  MacShane, Denis

  Follett, Barbara

  McWalter, Tony

  Foster, Michael Jabez (Hastings)

  McWilliam, John

  Foulkes, George

  Marsden, Gordon (Blackpool S)

  Fyfe, Maria

  Marshall, David (Shettleston)

  Gapes, Mike

  Marshall, Jim (Leicester S)

  George, Bruce (Walsall S)

  Martlew, Eric

  Gibson, Dr Ian

  Maxton, John

  Godsiff, Roger

  Meale, Alan

  Goggins, Paul

  Michael, Rt Hon Alun

  Golding, Mrs Llin

  Milburn, Rt Hon Alan

  Gordon, Mrs Eileen

  Mitchell, Austin

  Griffiths, Jane (Reading E)

  Moffatt, Laura

  Griffiths, Nigel (Edinburgh S)

  Moonie, Dr Lewis

  Griffiths, Win (Bridgend)

  Moran, Ms Margaret

  Grocott, Bruce

  Morgan, Ms Julie (Cardiff N)

  Grogan, John

  Morley, Elliot

  Hain, Peter

  Morris, Rt Hon Sir John (Aberavon)

  Hall, Mike (Weaver Vale)

  Hall, Patrick (Bedford)

  Mountford, Kali

  Hanson, David

  Mowlam, Rt Hon Marjorie

  Healey, John

  Mullin, Chris

  Henderson, Doug (Newcastle N)

  Murphy, Denis (Wansbeck)

  Henderson, Ivan (Harwich)

  Murphy, Jim (Eastwood)

  Heppell, John

  Naysmith, Dr Doug

  Hewitt, Ms Patricia

  Norris, Dan

  Hill, Keith

  O'Brien, Bill (Normanton)

  Hodge, Ms Margaret

  O'Brien, Mike (N Warks)

  Hope, Phil

  O'Hara, Eddie

  Howarth, George (Knowsley N)

  Olner, Bill

  Howells, Dr Kim

  Organ, Mrs Diana

  Hoyle, Lindsay

  Osborne, Ms Sandra

  Hughes, Ms Beverley (Stretford)

  Palmer, Dr Nick

  Hughes, Kevin (Doncaster N)

  Pearson, Ian

  Hurst, Alan

  Pendry, Tom

  Hutton, John

  Pickthall, Colin

  Iddon, Dr Brian

  Pike, Peter L

  Illsley, Eric

  Plaskitt, James

  Jackson, Helen (Hillsborough)

  Pollard, Kerry

  Jamieson, David

  Pope, Greg

  Jenkins, Brian

  Pound, Stephen

  Johnson, Alan (Hull W & Hessle)

  Powell, Sir Raymond

  Jones, Rt Hon Barry (Alyn)

  Prentice, Ms Bridget (Lewisham E)

  126

  Prosser, Gwyn

  Stuart, Ms Gisela

  Quin, Rt Hon Ms Joyce

  Sutcliffe, Gerry

  Quinn, Lawrie

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Radice, Rt Hon Giles

  Rammell, Bill

  Temple-Morris, Peter

  Rapson, Syd

  Thomas, Gareth R (Harrow W)

  Robinson, Geoffrey (Cov'try NW)

  Timms, Stephen

  Roche, Mrs Barbara

  Tipping, Paddy

  Rogers, Allan

  Touhig, Don

  Rooker, Rt Hon Jeff

  Trickett, Jon

  Rooney, Terry

  Truswell, Paul

  Ross, Ernie (Dundee W)

  Turner, Neil (Wigan)

  Rowlands, Ted

  Twigg, Derek (Halton)

  Ruane, Chris

  Twigg, Stephen (Enfield)

  Ruddock, Joan

  Tynan, Bill

  Russell, Ms Christine (Chester)

  Vis, Dr Rudi

  Sarwar, Mohammad

  Walley, Ms Joan

  Savidge, Malcolm

  Ward, Ms Claire

  Sawford, Phil

  White, Brian

  Sedgemore, Brian

  Whitehead, Dr Alan

  Sheerman, Barry

  Wicks, Malcolm

  Sheldon, Rt Hon Robert

  Williams, Rt Hon Alan (Swansea W)

  Short, Rt Hon Clare

  Smith, Rt Hon Andrew (Oxford E)

  Williams, Alan W (E Carmarthen)

  Smith, Angela (Basildon)

  Williams, Mrs Betty (Conwy)

  Smith, Jacqui (Redditch)

  Winnick, David

  Smith, John (Glamorgan)

  Winterton, Ms Rosie (Doncaster C)

  Soley, Clive

  Wood, Mike

  Southworth, Ms Helen

  Woodward, Shaun

  Spellar, John

  Worthington, Tony

  Squire, Ms Rachel

  Wright, Anthony D (Gt Yarmouth)

  Starkey, Dr Phyllis

  Wright, Tony (Cannock)

  Steinberg, Gerry

  Stevenson, George

  Tellers for the Noes:

  Stewart, David (Inverness E)

  Mr. Clive Betts and

  Stewart, Ian (Eccles)

  Mr. Jim Dowd.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—
  The House divided: Ayes 260, Noes 68.

  Division No. 320]

  [10.11 pm

  AYES

  Adams, Mrs Irene (Paisley N)

  Bradshaw, Ben

  Ainger, Nick

  Brinton, Mrs Helen

  Ainsworth, Robert (Cov'try NE)

  Browne, Desmond

  Alexander, Douglas

  Burden, Richard

  Allen, Graham

  Burgon, Colin

  Anderson, Donald (Swansea E)

  Butler, Mrs Christine

  Anderson, Janet (Rossendale)

  Campbell, Alan (Tynemouth)

  Armstrong, Rt Hon Ms Hilary

  Campbell, Mrs Anne (C'bridge)

  Ashton, Joe

  Campbell, Ronnie (Blyth V)

  Atherton, Ms Candy

  Campbell-Savours, Dale

  Atkins, Charlotte

  Caplin, Ivor

  Banks, Tony

  Casale, Roger

  Barnes, Harry

  Caton, Martin

  Barron, Kevin

  Cawsey, Ian

  Battle, John

  Chaytor, David

  Beard, Nigel

  Clark, Rt Hon Dr David (S Shields)

  Beckett, Rt Hon Mrs Margaret

  Clark, Paul (Gillingham)

  Begg, Miss Anne

  Clarke, Charles (Norwich S)

  Benn, Hilary (Leeds C)

  Clarke, Eric (Midlothian)

  Benton, Joe

  Clarke, Rt Hon Tom (Coatbridge)

  Bermingham, Gerald

  Clarke, Tony (Northampton S)

  Berry, Roger

  Clwyd, Ann

  Best, Harold

  Coffey, Ms Ann

  Blackman, Liz

  Coleman, Iain

  Blizzard, Bob

  Connarty, Michael

  Boateng, Rt Hon Paul

  Cook, Frank (Stockton N)

  Bradley, Keith (Withington)

  Cooper, Yvette

  Bradley, Peter (The Wrekin)

  Corbett, Robin

  127

  Corston, Jean

  Keeble, Ms Sally

  Cousins, Jim

  Keen, Ann (Brentford & Isleworth)

  Cranston, Ross

  Kemp, Fraser

  Cummings, John

  Kennedy, Jane (Wavertree)

  Cunningham, Jim (Cov'try S)

  Khabra, Piara S

  Darling, Rt Hon Alistair

  Kidney, David

  Davey, Valerie (Bristol W)

  King, Ms Oona (Bethnal Green)

  Davidson, Ian

  Kumar, Dr Ashok

  Davies, Geraint (Croydon C)

  Ladyman, Dr Stephen

  Davis, Rt Hon Terry (B'ham Hodge H)

  Lammy, David

  Lawrence, Mrs Jackie

  Denham, John

  Laxton, Bob

  Dobson, Rt Hon Frank

  Leslie, Christopher

  Doran, Frank

  Levitt, Tom

  Drew, David

  Liddell, Rt Hon Mrs Helen

  Eagle, Angela (Wallasey)

  Linton, Martin

  Eagle, Maria (L 'pool Garston)

  Lloyd, Tony (Manchester C)

  Edwards, Huw

  Love, Andrew

  Effort, Clive

  McAvoy, Thomas

  Ellman, Mrs Louise

  McCabe, Steve

  Ennis, Jeff

  McCafferty, Ms Chris

  Etherington, Bill

  McDonagh, Siobhain

  Field, Rt Hon Frank

  Macdonald, Calum

  Fisher, Mark

  McGuire, Mrs Anne

  Fitzpatrick, Jim

  McIsaac, Shona

  Fitzsimons, Mrs Lorna

  MacShane, Denis

  Flint, Caroline

  McWalter, Tony

  Flynn, Paul

  McWilliam, John

  Follett, Barbara

  Mallaber, Judy

  Foster, Michael Jabez (Hastings)

  Marsden, Gordon (Blackpool S)

  Foulkes, George

  Marshall, David (Shettleston)

  Fyfe, Maria

  Marshall, Jim (Leicester S)

  Gapes, Mike

  Martlew, Eric

  George, Bruce (Walsall S)

  Maxton, John

  Gibson, Dr Ian

  Meale, Alan

  Godsiff, Roger

  Michael, Rt Hon Alun

  Goggins, Paul

  Milburn, Rt Hon Alan

  Golding, Mrs Llin

  Mitchell, Austin

  Gordon, Mrs Eileen

  Moffatt, Laura

  Griffiths, Jane (Reading E)

  Moonie, Dr Lewis

  Griffiths, Nigel (Edinburgh S)

  Moran, Ms Margaret

  Griffiths, Win (Bridgend)

  Morgan, Ms Julie (Cardiff N)

  Grocott, Bruce

  Morley, Elliot

  Grogan, John

  Morris, Rt Hon Sir John (Aberavon)

  Hain, Peter

  Hall, Mike (Weaver Vale)

  Mountford, Kali

  Hall, Patrick (Bedford)

  Mullin, Chris

  Hanson, David

  Murphy, Denis (Wansbeck)

  Healey, John

  Murphy, Jim (Eastwood)

  Henderson, Doug (Newcastle N)

  Naysmith, Dr Doug

  Henderson, Ivan (Harwich)

  Norris, Dan

  Heppell, John

  O'Brien, Bill (Normanton)

  Hewitt, Ms Patricia

  O'Brien, Mike (N Warks)

  Hill, Keith

  O'Hara, Eddie

  Hinchliffe, David

  Olner, Bill

  Hodge, Ms Margaret

  Organ, Mrs Diana

  Hope, Phil

  Osborne, Ms Sandra

  Howarth, George (Knowsley N)

  Palmer, Dr Nick

  Howells, Dr Kim

  Pearson, Ian

  Hoyle, Lindsay

  Pendry, Tom

  Hughes, Ms Beverley (Stretford)

  Pickthall, Colin

  Hughes, Kevin (Doncaster N)

  Pike, Peter L

  Hurst, Alan

  Plaskitt, James

  Hutton, John

  Pollard, Kerry

  Iddon, Dr Brian

  Pope, Greg

  Illsley, Eric

  Pound, Stephen

  Jackson, Helen (Hillsborough)

  Powell, Sir Raymond

  Jamieson, David

  Prentice, Ms Bridget (Lewisham E)

  Jenkins, Brian

  Quin, Rt Hon Ms Joyce

  Johnson, Alan (Hull W & Hessle)

  Quinn, Lawrie

  Jones, Rt Hon Barry (Alyn)

  Rammell, Bill

  Jones, Mrs Fiona (Newark)

  Rapson, Syd

  Jones, Helen (Warrington N)

  Robinson, Geoffrey (Cov'try NW)

  Jones, Martyn (Clwyd S)

  Roche, Mrs Barbara

  Jowell, Rt Hon Ms Tessa

  Rogers, Allan

  Kaufman, Rt Hon Gerald

  Rooker, Rt Hon Jeff

  128

  Rooney, Terry

  Timms, Stephen

  Ross, Ernie (Dundee W)

  Tipping, Paddy

  Rowlands, Ted

  Touhig, Don

  Ruane, Chris

  Trickett, Jon

  Ruddock, Joan

  Truswell, Paul

  Russell, Ms Christine (Chester)

  Turner, Neil (Wigan)

  Sarwar, Mohammad

  Twigg, Derek (Halton)

  Savidge, Malcolm

  Twigg, Stephen (Enfield)

  Sawford, Phil

  Tynan, Bill

  Sedgemore, Brian

  Vis, Dr Rudi

  Sheldon, Rt Hon Robert

  Walley, Ms Joan

  Smith, Rt Hon Andrew (Oxford E)

  Ward, Ms Claire

  Smith, Angela (Basildon)

  White, Brian

  Smith, Jacqui (Redditch)

  Whitehead, Dr Alan

  Smith, John (Glamorgan)

  Wicks, Malcolm

  Soley, Clive

  Williams, Rt Hon Alan (Swansea W)

  Southworth, Ms Helen

  Spellar, John

  Williams, Alan W (E Carmarthen)

  Squire, Ms Rachel

  Williams, Mrs Betty (Conwy)

  Starkey, Dr Phyllis

  Winnick, David

  Steinberg, Gerry

  Winterton, Ms Rosie (Doncaster C)

  Stevenson, George

  Wood, Mike

  Stewart, David (Inverness E)

  Woodward, Shaun

  Stewart, Ian (Eccles)

  Worthington, Tony

  Stuart, Ms Gisela

  Wright, Anthony D (Gt Yarmouth)

  Sutcliffe, Gerry

  Wright, Tony (Cannock)

  Taylor, Rt Hon Mrs Ann (Dewsbury)

  Tellers for the Ayes:

  Temple-Morris, Peter

  Mr. Clive Betts and

  Thomas, Gareth R (Harrow W)

  Mr. Jim Dowd.

  NOES

  Allan, Richard

  Laing, Mrs Eleanor

  Amess, David

  Lansley, Andrew

  Baker, Norman

  Lewis, Dr Julian (New Forest E)

  Ballard, Jackie

  Livsey, Richard

  Beith, Rt Hon A J

  Llwyd, Elfyn

  Bell, Martin (Tatton)

  McIntosh, Miss Anne

  Bottomley, Rt Hon Mrs Virginia

  MacKay, Rt Hon Andrew

  Brake, Tom

  Maclennan, Rt Hon Robert

  Brand, Dr Peter

  McLoughlin, Patrick

  Breed, Colin

  Michie, Mrs Ray (Argyll & Bute)

  Burstow, Paul

  Moore, Michael

  Cable, Dr Vincent

  Morgan, Alasdair (Galloway)

  Campbell, Rt Hon Menzies (NE Fife)

  Oaten, Mark

  O'Brien, Stephen (Eddisbury)

  Chidgey, David

  Öpik, Lembit

  Clifton-Brown, Geoffrey

  Randall, John

  Collins, Tim

  Rendel, David

  Cotter, Brian

  Russell, Bob (Colchester)

  Cran, James

  St Aubyn, Nick

  Davey, Edward (Kingston)

  Sanders, Adrian

  Day, Stephen

  Stunell, Andrew

  Fabricant, Michael

  Syms, Robert

  Foster, Don (Bath)

  Taylor, Matthew (Truro)

  Garnier, Edward

  Thomas, Simon (Ceredigion)

  George, Andrew (St Ives)

  Tonge, Dr Jenny

  Gidley, Sandra

  Tyler, Paul

  Green, Damian

  Webb, Steve

  Hancock, Mike

  Wells, Bowen

  Harris, Dr Evan

  Whittingdale, John

  Harvey, Nick

  Wigley, Rt Hon Dafydd

  Howarth, Gerald (Aldershot)

  Willis, Phil

  Hughes, Simon (Southwark N)

  Winterton, Mrs Ann (Congleton)

  Jones, Nigel (Cheltenham)

  Winterton, Nicholas (Macclesfield)

  Keetch, Paul

  Tellers for the Noes:

  Kennedy, Rt Hon Charles (Ross Skye & Inverness W)

  Sir Robert Smith and

  Kirkbride, Miss Julie

  Mr. David Heath.

  Question accordingly agreed to.
  MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House deplores the previous Government's incompetent privatisation of the railways which left the network fragmented, cost taxpayers billions of pounds and brought rail travellers hours of delays; welcomes the Government's creation of the Strategic Rail Authority to give direction to the industry from an industry-wide perspective rather than from the narrow interests of individual companies; recognises that the Government's 10-year plan is delivering the largest investment programme for the railways for generations to tackle the problems caused by years of under-investment in the public and private sectors; welcomes the Government's pragmatic policy of developing Public Private Partnerships for National Air Traffic Services and the London Underground, enabling much needed investment and private sector financial and management skills to be introduced to the public services while safeguarding safety and the public interest; and regrets the official Opposition's dogmatic pursuit of privatisation for the London Underground and the National Air Traffic Services.

  EUROPEAN COMMUNITY DOCUMENTS
  Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),

  SOCIAL POLICY AGENDA
  That the House takes note of European Union Document No. 9964/00, a European Commission Communication on a European Social Policy Agenda for the next five years; and supports the Government's welcome for the Commission's analysis of the challenges facing employment and social policy in the next five years and for the emphasis placed on increasing employability. on combating social exclusion, on promoting entrepreneurship, whilst opposing proposals that impose unnecessary burdensome new legislation particularly upon business, and remaining convinced of the need for proposals to codify. adapt or improve existing legislation or for new legislation to be made clear and workable; and notes the Government's intention to negotiate to this end, and to ensure that the proposals take proper account of the legitimate concerns of employers and the need to raise employment rates across the Community.—[Mr. Touhig.]
  Question agreed to.

PETITION

  Pensions and Pensioners
  10.23 pm
  Mr. Matthew Taylor: Many of my constituents have asked me to present a petition on the same theme as the debate that my party called earlier this evening. [Interruption.]
  Mr. Speaker: Order. Will hon. Members leave the Chamber quietly? An hon. Member is presenting a petition.
  Mr. Taylor: My constituents declare that
  last year's increase of 75p in the basic state pension is derisory and is keeping pensioners in poverty.
  The issue is particularly important in my part of the world, where so many elderly people live and have lived on low incomes throughout their lives.
  The petition continues:
  The petitioners therefore request that the House of Commons urge the Secretary of State for Social Security—
  as we did in tonight's debate—
  to reconsider and give all pensioners an increase in their basic state pension that reflects a real share of the nation's wealth.
  Liberal Democrats have campaigned with the petitioners for increases on top of inflation, ranging from £5 a week for single pensioners to £15 for single pensioners over 80, and nearly £30 for pensioner couples. I hope that on Wednesday the Chancellor will finally listen to the huge campaign that has been run for such increases, first by pensioners alone and then with the support of Liberal Democrats around the country.
  To lie upon the Table.

  Horticulture Research International
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Touhig.]
  10.24 pm
  Mr. John Grogan: Stockbridge house near the village of Cawood is a horticultural research facility in my constituency. Like everything else in Selby at the moment, it is very wet indeed, and it would be remiss of me not to begin this debate by noting that, last week, the whole site and, indeed, the whole village of Cawood were under imminent threat from flooding. The products of years of research at Stockbridge house were threatened but, fortunately, owing to the heroic efforts of many villagers, led by parish council chairman David Jones, the flood waters were kept at bay. However, many of my constituents further downstream were not so lucky.
  For years, I have been accustomed on Thursday morning to seek out as my first read of the day a copy of the Selby Times. Since Horticulture Research International's shock announcement in September that it was closing Stockbridge house from the end of March 2001, my reading habits have changed. At Thursday breakfast time, I now turn first to a paper called the Grower. As chronicled in the Grower, the normally classy world of horticulture has been in turmoil in recent weeks.
  I want to do three things in this debate. First, I want to outline the importance of the horticultural sector and the current programme of research. Secondly, I want to discuss and examine the restructuring plan of Horticulture Research International and, finally, I want to suggest a way forward that will preserve the integrity of the restructuring plan—which, after all, Ministers have approved—while giving a new future to Stockbridge house.
  Horticultural output has risen steadily over the past few years. The farmgate value of horticultural produce is £2.5 billion and makes up more than 15 per cent. of the UK's total agricultural output. A recent study by the Ministry of Agriculture, Fisheries and Food indicated that, of 11 autonomous sectors studied, horticulture is the most important for value added. The UK horticulture industry is characterised by many small and medium-sized businesses, which is why our research capacity is important. Many horticultural businesses find it hard to get the information that they need to develop their products, protect them from disease and find new markets.
  Our debate will focus on the role of Horticulture Research International, a non-departmental public body, and it is worth noting that it is one of only 28 contractors for MAFF's programmes. In 2000–01, 80 per cent. of planned spending on horticultural research and development is expected to go to HRI. HRI's health is crucial to the industry, but it is essential that it has strong competitors to keep it honest. As the recent report of the Select Committee on Agriculture vividly described, HRI is, to put it bluntly, in a bit of a financial mess. Since 1990, MAFF has pledged £125 million of research and development contracts to HRI and invested £60 million in restructuring plans.
  The Select Committee discussed the recent failure of the HortiTech business unit that was launched with a fanfare by the current HRI chairman, Mr. Peter Siddall, in 1998. The unit was designed to generate commercial
  132
  income by transferring technology to industry and creating a commercial philosophy throughout HRI. HortiTech income is about £2.7 million, compared with a target of £4.35 million. The relative failure of HortiTech is the root of HRI's financial problems. The restructuring plan announced in September by Mr. Siddall involved a loss of about 150 posts—including about 50 at Stockbridge—which is more than 20 per cent. of HRI's total work force. Jobs will be lost as a result of the failure of the board and its chairman to balance the books.
  Stockbridge house, to the astonishment of the industry, was chosen for closure. Of all the development sites run by HRI, Stockbridge house seemed to be in the strongest financial position, as Colin Harvey, chairman of the Horticultural Development Council, observed. Fifty per cent. of HRI's £22 million annual income comes directly from MAFF. However, MAFF funds only 10 per cent. of Stockbridge house's costs, with 47 per cent. coming from the Horticultural Development Council—in effect, the growers who pay the council a levy—and the remaining 43 per cent. from commercial organisations.
  HRI's website boasts that "over the years" Stockbridge house
  has built up a worldwide reputation as a practical centre for horticultural research and development.
  The SOLA—specific off-label approval—programme of pesticides research is particularly important to smaller growers. That is based at Stockbridge house. It provides them with the crop protection products that they need to remain competitive. Indeed, the programme is funded largely by the HDC. Mr. Siddall's plan depends on closing Stockbridge house, but transferring the contracts to other sites. There are practical difficulties in doing that.
  Other criticisms of HRI's plans are as follows: first, there was a complete of lack of consultation with the industry. The management tactics employed might have been learned by studying a National Coal Board management manual from the 1980s. As the Tomato Growers Association put it in its press release:
  The Tomato Growers Association views with dismay the announcement by HRI of the intended reduction of more than 20 per cent. in its staff numbers and, in particular, the closure of its Stockbridge House site. Had HRI consulted the industry over its plans, it would know that Stockbridge has recently enjoyed the closest working relationship of any HRI site with glasshouse salad crop growers, and not just those in the north of the country.
  The TGA has no confidence that HRI can maintain or replace the expertise which is threatened by the closure … As an example, research on the control of spider mites, which is led by Stockbridge staff, is seen as pivotal to the achievement by growers of their objective of eliminating all pesticide use in UK tomato crops.
  There is a strong feeling that HRI is turning its back on its original objectives. When it was set up in 1990, its brief was to
  carry out horticultural research and development and to transfer the results to the UK horticultural industry—
  very much an applied practical brief, the sort of work that Stockbridge house excels in and that growers throughout the country, particularly in the north, find so useful.
  I quote The Commercial Greenhouse Grower editorial of last month:
  The industry has made its voice very clear on the Stockbridge House closure.
  It feels badly let down that it was not consulted, but if you read the evidence submitted by HRI's chairman Peter Siddall … to the House of Commons Agriculture Select Committee you get the answer.

  133
  In his evidence Mr. Siddall aptly made clear that re-shaping HRI meant "more science and less development." And just in case we are accused of taking phrases out of context he also said "It is about focus, focus on science and the higher value end of the spectrum."
  On consultation, it was shameful that, when Mr. Siddall announced his plan, no one had bothered to check with MAFF about the future of the tied cottages at Stockbridge house. Families who had given their working lives to the site were left for weeks wondering whether they would lose not just their jobs, but their homes. Thankfully, my right hon. Friend the Minister of Agriculture, Fisheries and Food has intervened to secure those homes.
  There is an element of civil service politics about all this, which reveals the limitations of the model of a non-departmental public body. When I was invited to an extremely useful meeting with the Minister to discuss the matter, sitting on his left was one Mr. Tony Burne, his chief adviser on research. Wearing his other hat, Mr. Burne is on the HRI board. In effect, he was advising the Minister on a restructuring plan costing the taxpayer more than £4 million. As a member of the HRI board, Mr. Burne had already approved that plan and committed himself to it.
  I draw three conclusions from that evidence. First, as regards the status of HRI, there is wide consensus on the immediate way forward. As long ago as 1993, the HRI management statement referred to intended primary legislation which will establish HRI as a statutory corporation with functions and powers to carry out its remit and define its relationship clearly with MAFF. Who knows? Given my new found knowledge on the subject, I might be persuaded, if I am successful in the forthcoming ballot, to introduce a private Member's Bill on the subject.
  That brings me to my second conclusion. I will want first to see a new chairman of HRI. Mr. Siddall should emulate Kevin Keegan and not seek reappointment to the role when his three-year term is up in January 2001. No one in the industry has been impressed by the aggressive attitude that Mr. Siddall has adopted, most notably at a recent meeting with the National Farmers Union and the HDC, which he needs to win over. Apparently, he banned the chief executive from attending a previous meeting with the HDC.
  Mr. Siddall is a management consultant by trade. His website, Siddall & Company, reveals the following philosophy:
  With our clients we act as catalyst, coach and safety valve so that groups can work together more effectively.
  Our clients regard us as trusted thought partners.
  Enough said—HRI is too important to be an experiment for a management consultant.
  The final conclusion is on the future of Stockbridge house and HRI. Earlier, I mentioned the fact that, for HRI's restructuring plan to work, HRI has to keep on-side the seven key research scientists at Stockbridge house and the HDC. None of the key research scientists are prepared to move, because of family reasons. The HDC has expressed concerns about HRI's ability to fulfil the SOLA contract at another site.
  Last week, a very constructive meeting was held between representatives of HRI, the National Farmers Union and the HDC. There now seems to be a real and shared commitment to ensuring a viable and effective approach for HRI. Chief executive Professor Michael
  134
  Wilson is now adopting a more pragmatic approach, making it clear that he does not rule out in the future employing the services of some of the seven key research scientists at Stockbridge house, perhaps on a contractual basis. The HDC is particularly keen that some of their skills should be employed in fulfilling the extremely important SOLA research programme.
  Last week, I spoke to Professor Wilson on the telephone. He told me that he would not stand in the way of another body—perhaps the Central Science Laboratory, in York, which is another arm of MAFF and in need of glasshouses—taking over the site, and that it was up to that body to draw up a business plan. Indeed, if Professor Wilson is to contract work for the SOLA programme to some of the current research scientists, they will need continuing facilities at Stockbridge house. It is possible that some or all of the staff based at Stockbridge house could be transferred to CSL, saving some of the redundancy costs. There are also moves among local growers to establish a Stockbridge house trust to fund work on the site. I formally ask Ministers for a meeting within the next month to discuss those ideas.
  Last week, I also asked Professor Wilson what he thought of accusations that HRI would implement a scorched earth policy at Stockbridge house so that no one else could take on a viable site. He assured me that the glasshouses would remain untouched, but made no commitment on the tractors and other equipment.
  It is also a little unclear to what extent HRI is willing to provide financial and personnel information on Stockbridge house to enable CSL, or anyone else, to prepare a business plan for the site. Perhaps Ministers will consider dispatching the ubiquitous aforementioned Mr. Tony Burne, chief research adviser to MAFF and HRI board member, to encourage all the parties involved to give a fair chance for alternative plans for Stockbridge house to be prepared and to be carefully considered by Ministers, as my right hon. Friend the Minister of Agriculture, Fisheries and Food promised to do in his most recent press release on the subject.
  10.38 pm
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin): I congratulate my hon. Friend the Member for Selby (Mr. Grogan) on securing this debate. I certainly understand why he has chosen to raise this particular issue; it is not only important, but of enormous concern to Horticulture Research International staff, to its many customers and to my hon. Friend's constituents. I very much appreciate that in securing this debate, my hon. Friend has been motivated both by concern for the jobs of some of his constituents and by the concern to secure a viable horticulture industry, and horticultural research industry, in the United Kingdom. Like officials and other Ministers in my Department, I hold very dear those concerns about the horticulture industry and the horticultural research industry.
  My hon. Friend began by referring to the danger of flooding at the site in his constituency. I join him in paying tribute to the efforts of those who have worked so hard in trying to ward off the problems caused by flooding in his part of the world.
  The Government very much regret that HRI is having to take the action that it has announced, including the closure of its Stockbridge house site and the redundancies

  135
  across the organisation. Indeed, it is important to stress that all HRI's sites are affected by the restructuring programme, not just Stockbridge house—although I fully accept the severity of the impact on Stockbridge house, as outlined by my hon. Friend.
  I know that HRI's board and senior management are committed to providing every possible assistance for staff who are being made redundant. That includes career consultancy, resettlement training and access to independent counselling. MAFF has made available its own personnel and welfare services. That in turn includes doing our best to identify suitable vacancies at the offices of MAFF or our agencies. When my hon. Friend met my right hon. Friend the Minister of Agriculture, Fisheries and Food, they discussed some of these concerns.
  The Government believe that however difficult HRI's restructuring measures may be, they are necessary to redress a very difficult financial situation and to ensure that HRI can continue to provide an efficient and cost-effective service into the future.
  My hon. Friend mentioned some of HRI's financial problems, and it is true that it is forecasting an annual deficit for the four years ending March 2004 of about £2 million, falling to £1.3 million. Some £3 million must be cut from operating costs, and assets must be brought into line with foreseeable income streams. That is why the board and management had to review the financial strategy, and to take difficult decisions as a result. The horticulture industry and the farmers' unions share the view that to maintain HRI and provide for its crucial work for the sector, the restructuring is necessary.
  The Government believe that HRI's board and senior management have assessed all the options and identified the one which, in their view, can best secure the organisation's future and maintain its service to the UK horticulture industry. HRI is a non-departmental public body, and decisions about the day-to-day operation of its business are, of course, matters for its board and senior management. It has an experienced board, which includes senior representatives of the horticulture industry, the scientific community and business.
  I can assure my hon. Friend and the House that, as HRI's sponsor Department, the Ministry has scrutinised the plans very thoroughly. We have agreed to provide a grant of £4.5 million to enable the restructuring to be implemented. My right hon. Friend the Minister met my hon. Friend with a delegation from the industry on 21 September, to listen to their concerns directly and to discuss the restructuring plans, including the closure of the Stockbridge house site.
  One of the points arising was the industry-funded work at Stockbridge house and its future. Not surprisingly, my hon. Friend referred to the arrangements that HRI has in hand to ensure that it can continue to deliver the important project work currently based at Stockbridge house, and its chief executive has given the Minister an undertaking that those arrangements will be fully discussed and explained to the industry.
  To that end, HRI has had lengthy and detailed discussions with senior representatives of the industry to explain the rationale behind the restructuring plans and the arrangements for managing work currently carried out at Stockbridge house. I am pleased to be able to report
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  that on 2 November HR1, the National Farmers Union, the Horticultural Development Council and the East Malling Trust for Horticultural Research issued a joint statement, in which they all committed themselves to moving ahead together for the benefit of the UK's horticulture industry. In particular, they have agreed to seek a satisfactory continuation at HRI of the important SOLA—specified off-label pesticides approval—work currently carried out at Stockbridge house.
  The statement affirmed all those bodies' belief in a healthy and vigorous HRI, and in the need for all the stakeholders to work together to ensure that its valuable programme of work continues in such a way as to benefit the horticulture industry directly.
  It is worth reflecting on the fact that the horticulture industry is a major contributor to the economy and to the nation's diet and health. My hon. Friend and I must have read similar briefing information before this debate, as I, too, want to refer to the fact that the farmgate value of produce exceeds £2.5 billion, which, as he said, is more than 15 per cent. of total UK agricultural output. That is a significant contribution. Horticulture receives very little support from the common agricultural policy, and has one of the freest markets in operation in agriculture.
  Consumer preference has been a strong driver and the sector has shown itself to be tough, competitive and resilient. I want to stress the importance that Ministers attach to the future of the horticultural sector. As a Minister with a particular interest in the sector, I have had discussions with various people in the industry, as well as seeing for myself many of our excellent horticulture establishments. I am convinced that the sector can expand and can take the place of some of the produce that is currently imported, ensuring that in future we provide more of our produce domestically.
  Current levels of public funding represent a firm commitment to HRI and to its work in support of the UK horticulture industry. MAFF continues to account for about 50 per cent. of its income. Since 1997, the Government have invested about £58 million in the organisation. HRI has also been awarded £2.26 million from the capital modernisation fund to create a new European centre for organic top fruit and nursery stock at its East Malling site.
  I spoke of some of our imported produce being replaced by domestically grown produce, and that is especially relevant to organic production. There is considerable room for more such production here. The commitment to the new European centre was part of the action plan for farming launched by my right hon. Friend the Prime Minister at the farming summit on 30 March. In addition, HRI has been awarded £151,000 from the invest-to-save budget for collaborative projects with other public sector research establishments, and has recently been granted more than £11 million for capital investment and other purposes, including £4.5 million to enable the present restructuring plans to be implemented.
  My hon. Friend, quite understandably, concentrated on plans for the future of the Stockbridge house site. May I respond directly to his request for a meeting with Ministers and officials about the developing situation regarding the future of the site and of HRI's work? I am happy to give him the assurance that we will have a meeting with him to deal with the issues about which he is concerned. He knows, however, that our intention is

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  that once HRI vacates the site we shall sell it, so that the receipts will partly offset the cost of financing the restructuring plans, including redundancy payments to staff who are not transferring to other sites.
  I know that there has been speculation about a possible role for MAFF's central science laboratory at York. As my right hon. Friend the Minister of Agriculture, Fisheries and Food announced on 6 October, CSL is considering the business case for consolidating some of its own research work at Stockbridge house when HRI leaves.
  My hon. Friend referred to a scorched earth approach to the Stockbridge house site. I assure him that that is not the case. The discussions will include consideration of some of the facilities that already exist on that site, about which I know he is concerned.
  My hon. Friend also referred to HRI's science activities. I do not believe, as some allege, that HRI is expanding its "high science" activities at the expense of its development role. Indeed, HRI' s chief executive has given Ministers an assurance that it will continue to cover the full spectrum of research and development from basic research to the dissemination of research and development findings and good practice direct to the industry. I know that he is keen to strengthen further HRI's links with the horticulture industry, something to which I also attach considerable importance. The chief executive is also seeking additional funding schemes through public-private partnerships so as to stabilise HRI's financial position and ensure that it continues to benefit all its stakeholders.
  My hon. Friend also spoke about the role of Tony Burne, who is on the board of Horticulture Research International. He is one of 10 members of the board, and
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  although he also has a role advising Ministers and considering issues affecting research in this sector through his work at MAFF, he does not derive financial advantage from that role. It is important to say that. There has been a representative from MAFF on the board of HRI from the outset. In that sense, Mr. Burne is fulfilling a normal responsibility, which has existed from the beginning.
  The Government believe that HRI has a good reputation for providing high quality research and development and services to its customers. As such, it is rightly—and should continue to be—the premier horticultural research establishment in the United Kingdom. Obviously, we intend the restructuring plans to reinforce that position and maintain the ability to service the United Kingdom's horticulture industry. The Government hope that all HRI's customers will rally round the organisation and give it their support. We believe that we have to look ahead, through this difficult restructuring, to the industry's ultimate benefit.
  It is important to see this research work in terms of the wider research work that can benefit horticulture and agriculture. I also believe that it is important to consider such issues in a national and a regional context to see the role that horticulture can play in the development of regional economies as well as in the economy of our country as a whole.
  I accept my hon. Friend's point when he stressed the importance—
  The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at six minutes to Eleven o'clock.