Commons Sitting of 19 July 2001

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  TREASURY
  The Chancellor of the Exchequer was asked—
  TREASURY

    Climate Change Levy
    Mr. David Amess: What recent representations he has received on the climate change levy. [3320]
    The Financial Secretary to the Treasury (Mr. Paul Boateng): The Government received many representations over the two years of development of the climate change levy, and many of the ideas that businesses suggested are reflected in its final design.
    Mr. Amess: I wholeheartedly congratulate the Chancellor of the Exchequer on his splendid news, although he has some way to go before he catches up with my wife and me.
    How does the Financial Secretary intend to deal with the European Commission's ruling that dual fuel exemptions in the climate change levy constitute state aid, and the doubts that it has cast on the exemptions compatibility with environmental aid guidelines?
    Mr. Boateng: Robustly. We are negotiating with the Commission, and the industry is involved in those negotiations, which are going well. We have a strong case, and we believe that our representations will be successful.
    Mr. Tony Colman: Has my right hon. Friend held any discussions on the climate change levy with United States Senator James Jefford, who is the new chairman of the Senate Environment Committee? He wants the United States Government to re-engage with the Kyoto protocol negotiations. He is interested in the success of the implementation of the climate change levy by US businesses in the United Kingdom in improving energy use, increasing investment and reducing costs. Does my right hon. Friend agree with Senator Jefford that, although emissions trading may be a long-term answer, we need a regulatory regime, such as the climate change levy, and to work with business to deal with greenhouse gases in the short and medium term?
    Mr. Boateng: I have had no discussions with the Senator, although I would like to. There is good news
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    from the United States, where there is strong and growing support for Kyoto. There is every sign that President Bush understands the importance of the issue, although we have some disagreements about his approach to the Kyoto targets.
    In introducing a package of measures on the climate change levy, we make the point that it is part of the answer, but that trading emissions also has a role to play. Our approach is balanced and retains a competitive edge for our industry while bearing down on carbon emissions.
    Mr. Howard Flight: I congratulate the Chancellor on his good news. Should his lot be the same as mine, with four children to bring up, it will have a profound impact on his tax thinking in future.
    Hon. Members know that there will be a windfall VAT gain of at least £30 million from the VAT levied on the total amount of energy bills, including the misguided climate change levy element. Will the Financial Secretary confirm that the wind fill will not be recycled to business through the cut to employers national insurance?
    Mr. Boateng: Windfall. The hon. Gentleman knows that Customs and Excise is considering the points that he made. When it has reached a decision on the advice it will tender to Ministers, I shall write to him about it. He makes an important point, but I stress that the climate change levy improves the competitiveness of industry because we have introduced a generous system of rebates and we are also providing support through national insurance employers contributions. That is good news, which is widely welcomed by industry, if not by Conservative Members.

    International Development
    Kali Mountford: If he will make a statement on progress in recent G7 and G8 meetings on international development issues. [3321]
    The Chancellor of the Exchequer (Mr. Gordon Brown): At our meeting on 7 July, G7 Finance Ministers approved proposals which will be published tomorrow. They advance our commitment not only to debt relief but to halving global poverty by 2015.
    A new global health fund to finance commodities and treatments has $1 million, with the United Kingdom pledging $200 million to a successful fund. By the end of the Genoa summit, we expect the figure to be £1.5 billion.
    Britain has also proposed a research and development tax credit for pharmaceutical company research into diseases such as TB, malaria and AIDS to end the position whereby 10 per cent. of research currently goes on diseases that affect 90 per cent. of the people. We expect pharmaceutical companies to develop clear, comprehensive, global, two-tier pricing, and give the global health fund and other legitimate purchasers deep discounts on the full range of drugs, treatments and vaccines for HIV-AIDS, malaria, TB and other killer diseases.
    Kali Mountford: The House is aware of my right hon. Friend's long-standing commitment to reducing child poverty both in the United Kingdom and world wide. I am sure that we are all very happy to hear of his new

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    personal interest in the well-being of all children, and I am sure that everyone extends congratulations to him and his wife on their happy announcement.
    Will he take the opportunity of the Genoa summit to build on the progress that has already been made in tackling child poverty? Does he also accept that, in addition to debt reduction, we really have to do more for children born with HIV-AIDS and for those who have very little access to education and a decent future? Will he take this opportunity to prepare for the United Nations September summit, a special session on children, and press our partners in the G7/G8 to prepare for it so that we can all do much more and increase our commitment to reducing child poverty?
    Mr. Brown: I thank my hon. Friend and other hon. Members for their congratulations. I am pleased that, this morning at least, I am not answering questions on the children's tax credit or baby bonds; otherwise, I might have to declare an interest.
    The message that must be sent out this weekend and running up to the 15 September children's conference, involving the United Nations and other agencies, is that we can tackle those huge problems only by global economic and social co-operation. Each year, 6 million people die unnecessarily from avoidable diseases—2 million from TB, 1 million from malaria, 3 million from HIV-AIDS—although it is possible to tackle those very major problems by using available pharmaceutical research and encouraging more research.
    We intend not simply to push forward the global health fund, but, in 2002, to work with Canada, the G7 president, to make the education of children in the Commonwealth and elsewhere a central issue and to ensure that more resources, particularly to stop the charging for education, are made available. I also believe that we can make progress on reaching our other 2015 target, which is that every child has primary education in every country of the world.
    Matthew Taylor (Truro and St. Austell): I congratulate the Chancellor on his news of the past few days; perhaps it will mean a speedy policy on the baby bond.
    I commiserate with the shadow Chancellor on his bad news during the past few days. Conservative Members showed a remarkable lack of courage in not adopting a social liberal agenda, for which at least Liberal Democrat Members will be arguing.
    Will the Chancellor take the opportunity of President Bush's visit to the United Kingdom today to ensure that although Bush may be moving away on Kyoto and on helping developing countries with alternative energy development, he will at least not renege on the commitment made by the previous President on international debt relief? Will the Chancellor, on his own account, also examine the tax relief that this country gives on bribes paid by British companies to foreign countries in the developing world? Will he bring that relief to an end?
    Mr. Brown: We continue to push forward the agenda on debt relief and 23 countries are now receiving that. I believe that there is a common purpose among all the
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    G7 countries, including those that were initially doubtful about the debt relief programme, to move the programme forward.
    The global health fund will stand at $1 billion as we go into the Genoa summit. My own view is that it could increase to $1.5 billion. Although that money has been got together in only a few months, it must be the case that we should do more, particularly with countries outside the G7, so that we can have a wider and bigger fund with which to purchase commodities, help with the provision of treatments and make a difference in the attitude that will be taken by the pharmaceutical companies.
    On the other questions of globalization—
    Matthew Taylor: Bribery.
    Mr. Brown: As the hon. Gentleman knows, when we entered government we inherited a provision whereby tax relief was provided for bribes paid by British firms to gain contracts. We are tackling that and it will be removed. Equally, the codes of conduct that we are proposing within the International Monetary Fund and the World Bank are designed to ensure that countries cannot expect to enjoy all the resources that come from participating in the global economy if they remain immune to action against corruption.
    Therefore, in addition to the paper that we are producing this weekend, "Debt Relief and Beyond", I expect that progress will be made on all those fronts. However, a more important message has to go out from Genoa: only by co-operation among the nations of the world can we make the progress for social justice that is necessary.
    Mr. Dennis Skinner: Is my right hon. Friend aware that during the recent election campaign some of the biggest cheers that we received when we travelled around many constituencies were for third world debt relief? Long may the policy continue of helping those starving kids and relieving AIDS in South Africa. Is that not in sharp distinction to one of those Tory grandees, a putative new leader of the Tory party, selling fags and spreading cancer around the third world?
    Mr. Brown: My hon. Friend rightly points to the need to devote resources to tackling the problems of AIDS, TB and malaria, and that is exactly what we plan to do. We are introducing legislation on advertising of cigarettes and so on. On the question of third world debt, as I said, 23 countries are now receiving debt relief through an initiative that was benefiting only one country when we came to power. Many more countries could benefit from debt relief. However, seven of them are currently engaged in civil wars or conflict, mostly in Africa. What we want out of Genoa is another initiative that will help post-conflict countries, so that as soon as they are out of conflict and restructuring their economies we can make available the debt relief that they should have.
    Mr. Michael Portillo: I add my congratulations to the Chancellor and his wife Sarah. I must say that this news has brought great pleasure to me and also, I believe, to Lord Tebbit.

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    Will the Chancellor ensure that the resources that he has committed to relieving world poverty are used to the best effect? It seems to me that charities have the lowest running costs and that, typically, they work with the grain of local communities in poorer countries producing projects that local people support. In that context, is the Chancellor happy that only about one tenth of what the Government commit actually goes through charities? The Secretary of State for International Development has rightly imposed some conditions on the money that is going through the United Nations global health fund. Can the Chancellor say whether any of the other organisations through which we are putting money raise the same issues—that we want to bureaucracy to be cut and money to be delivered more effectively to poor people?
    Mr. Brown: On behalf of all right hon. and hon. Members, I thank the shadow Chancellor for his contributions to the debates of this House over the past year as shadow Chancellor, but also over many years when he spoke from the Front Bench for the Conservative party, and for the contribution that he has made from the Front Bench to national life. While he knows better than anyone else in the House, I suspect, the vicissitudes of political life, all hon. Members have been struck by the dignified manner in which he accepted the events of this week and we all wish him well in whatever he seeks to do in the years ahead. During the past year he has made many controversial speeches as shadow Chancellor—almost none of them on economic policy.
    I am grateful that he has concentrated on the issue of third world international development recently. I understand exactly what he is saying about ensuring that the money that is provided in international development aid and through other sources goes straight to the cause for which it is intended. He may note that the new fund dealing with vaccines, the GAVI fund, which is financed partly publicly and partly privately, has a very small administration and is getting the vaccines to the countries that need them. Modelled on that, the new global health fund that we are setting up this weekend will provide both vaccines and treatment, not just for HIV-AIDS but for TB and malaria. I hope that there will be an all-party consensus that we have to do more to tackle the problems of global ill-health and illiteracy.
    I believe that it is possible that the United Kingdom can continue what my right hon. Friend the Secretary of State for International Development, to her credit, has done and maintain Britain's lead in persuading other countries that they should contribute to the global health fund and set their sights on meeting the 2015 targets. I thank the right hon. Gentleman for his intervention, particularly on this issue.
    Mr. Portillo: I am grateful to the Chancellor for his personal remarks, as well as for that answer. Does he agree that, over many decades, one of the problems with international poverty relief has been that so much money from the international community has found its way into the sticky hands of dictators and some of their megalomaniac projects? Should not that money get through to building schools and hospitals, which are what people need? Does he share my shock at the fact that, over the past 30 years, people in Africa have been getting poorer, in contrast with the progress made in the rest of the world? Does he accept that there is a vicious circle of
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    ignorance, poverty and disease? Will he use the opportunity of the Genoa summit to show the international community that, if we are to succeed in tackling poverty, education and health will be critical to people in developing countries?
    Mr. Brown: I agree that we must do far more to root out corruption and to ensure that the money provided in international relief goes to the causes for which it is intended. To put the positive side, however, in contrast to the negative, when debt relief is provided, for example, to Uganda, it is on condition that the money goes into education and health. Uganda is now able to reduce its pupil-teacher ratio from 100:1 to 50:1, which is a considerable advance, and every primary school child will benefit from education in a classroom with a roof over their head.
    Equally, in other countries, debt relief is now being provided only on condition that there is reform and that the money goes to health and education. The latest figures show that 40 per cent. is going to education and 25 per cent. to health. Considerable advances are being made. In Uganda, Malawi and other countries we have insisted that the additional money that we have provided for education is used to ensure that there is no charging. The fact that there are no charges for education has meant that the number of people enjoying primary schooling in Uganda and Malawi has gone up by 3 million. It is possible, by applying conditions to debt relief, to ensure that reforms are made.
    I hope that the shadow Chancellor will continue to take an interest in these matters from the Back Benches. We all understood the difficulties that the Conservative party had in choosing between its three candidates. I suppose that he can say that he appealed to all thinking Conservatives, but there were just not enough of them.
    Mr. Portillo: The Chancellor and I are slightly out of sync today, as I am now coming to the nice bit. I congratulate him on building on the work that was begun by John Major as Prime Minister. I hope that he will continue that work on behalf of all the parties in the House. We all recognise that Britain, as a relatively prosperous country, has special responsibilities to the world, and indeed a special privilege, because it is in a position to provide effective help. Even if it were merely a matter of national self-interest, which it is not, we should strive to reduce the poverty and eliminate the corruption that together are the causes of conflict, of untold misery and of the huge flows of refugees that we all then have to deal with.
    There may be some Conservatives who say that charity begins at home, but even if that is so, it certainly should not end there. I congratulate the Chancellor on his work in this field, because I know that being able to do some good is the highest privilege that attaches to holding office, and if we are not here to do good, what, after all, is politics about?
    Mr. Brown: The shadow Chancellor will be able to speak on these issues in the House over the next few years.
    The pressure for action on debt and on illiteracy and ill-health has come not only from Members of Parliament—I acknowledge the work that hon. Members

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    of all parties have done—but from the general public. We all know that our churches, community groups and non-governmental organisations have been a powerful and constructive voice in pushing not only for debt relief but for action on the 2015 targets.
    We have a unique situation in which the International Monetary Fund, the World Bank, the Organisation for Economic Co-operation and Development and the United Nations have agreed that it is their purpose to meet the targets of a two-thirds cut in infant mortality, the halving of poverty and having every child in primary education by 2015. This is a major statement of purpose by the world community, and I hope that we can continue to work with the churches and community organisations to make a reality of these bold, challenging, yet utterly necessary targets.
    Mr. Tom Clarke: Was my right hon. Friend able to break away from his welcome celebrations last night to see John Pilger's programme on Carlton television on the subject of globalisation? Whatever our views on Mr. Pilger's individual style, does my right hon. Friend accept that the programme produced compelling evidence that the World Bank, the International Monetary Fund and the World Trade Organisation have not yet moved towards the transparency and accountability that we all want? Given my right hon. Friend's authority because of his achievements on debt, will he continue to push forward with the Government's demand for reforms in those areas?
    Mr. Brown: If I say that I saw Mr. Pilger's programme, my right hon. Friend may think that I was not celebrating last night. However, I did see the end of it and I disagreed with much of what I saw. The argument that the institutions that were set up in 1945 to maximise prosperity—of all people, not just some—are somehow the cause of our problems is completely wrong.
    The World Bank, the IMF, the United Nations and the various institutions such as Unicef associated with the UN should be supported in what they do. In some cases, they need additional resources and, in many cases, they need to modernise, but by working through those institutions we can maximise prosperity and extend it into the poorest countries, in co-operation with their Governments.
    We must not lose sight of the bold idea from 1945 that it is only through international co-operation that we can solve many of the problems of poverty in the world. I disagree with Mr. Pilger's main thesis that the institutions are somehow responsible for the problem. The challenge in the years ahead is to modernise and strengthen the institutions so that we can tackle ill-health, illiteracy and poverty.

    Business Tax Burden
    Dr. Julian Lewis: If he will make a statement on the tax burden on businesses. [3323]
    The Chief Secretary to the Treasury (Mr. Andrew Smith): Information on receipts from different taxes and changes are included in the relevant issues of the "Financial Statement and Budget Report".
    Dr. Lewis: I thank the Chief Secretary for that singularly uninformative reply. Does he accept that the
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    Confederation of British Industry has estimated that the tax burden on business has increased by £5 billion a year, and could that be the explanation for the fact that Britain has slipped in the ranking of most competitive countries in the World Economic Forum's league from fourth to ninth position?
    Mr. Smith: The truth is that the Government have cut taxes on business, including a cut of 3 percentage points in the large and small companies rate of corporation tax and the introduction of the 10p starting rate, which—as my right hon. Friend the Chancellor has said—will be expanded in the Budget next year to give more help to small businesses. The result is that corporation tax as a share of the gross domestic product has fallen under this Government from the 3.6 per cent. we inherited to 3.4 per cent. last year.
    As for the CBI, Digby Jones, its director general, said in response to my right hon. Friend's enterprise statement on 18 June:
    "We are really encouraged by the commitment to make Capital Gains Tax more favourable to enterprise than in the United States. Together with the commitment to improve tax treatment for share options, this is a clear indication the Government understands the importance of business competitiveness in the global marketplace."
    David Taylor: While I accept my right hon. Friend's point about the level of corporate taxes, does he accept that small and medium enterprises face a serious problem in relation to the level of business rates? I received today a letter from a small firm in my constituency that has moved to new premises and provided 150 new jobs. Its space requirements have not quite doubled but its rate bill has quintupled. Can my right hon. Friend work with other Ministers to examine the effect of that tax, which is long overdue for reform?
    Mr. Smith: I shall of course examine carefully the points that my hon. Friend makes. There is always more we can do for small firms and we are looking at what that might be, but we have cut their average corporate tax bill by nearly a quarter. We have raised the threshold for mandatory audit, we have introduced the Small Business Service and we are simplifying the VAT regime. We also allow businesses to calculate their tax liability on the same basis that they need to provide figures for their company reports. As a consequence, there are now 170,000 more small businesses than when the Government came into office. We shall look at what we can do to give them more help, but the progress that has been made already should be recognised.
    Mr. Nicholas Winterton: I am sure that the Chief Secretary will appreciate my total commitment over many years to manufacturing industry, but I want to bring to his attention the plight of a textile company in the north-west. It is involved in a very competitive sector of manufacturing, and has spent more than £1 million on reducing the emissions into the environment that result from its manufacturing processes. Under the climate change levy, the firm will have to pay £85,000 a year. Does not the right hon. Gentleman believe that that is extremely unfair? Before he tells me about rebates, I must add that, unfortunately, the company is not eligible for a

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    rebate. It will therefore have to accept an additional tax burden of £85,000 a year. How would he explain that to the company?
    Mr. Smith: I acknowledge the hon. Gentleman's commitment over many years to manufacturing industry, and the consistency and passion with which he has spoken on the subject under successive Administrations. The answer to his question regarding the firm in the north-west that he described is that we can build success for the future only through investment, by developing skills and by creating a generally low-tax environment for business that recognises the tough global competitive circumstances faced by such firms. No Government can guarantee the success of individual firms or sectors; we can only do our level best to create the best conditions for them to succeed against tough global competition. Opposition Members accept the Kyoto targets, but it is no good them willing the ends with regard to climate change if they are not prepared to grasp the means.

    Debt Relief
    Mr. Michael Connarty: What steps he is taking on debt relief in developing countries. [3324]
    The Chancellor of the Exchequer (Mr. Gordon Brown): Since Chad was accepted as the 23rd country on 22 May, 23 countries have now entered the debt reduction process, with debt cancellation now totalling $53 billion. Four more countries are expected to achieve debt cancellation in the next few months. Seven countries are prevented from doing so by internal conflicts.
    Mr. Connarty: I thank my right hon. Friend for that reply. May I add my personal congratulations to the others that my right hon. Friend has received from his Scottish friends, and from Sarah's personal friends in Scotland?
    Does my right hon. Friend think that what he has achieved in debt cancellation is undermined by the fact that many countries are burdened with commercial debts, rather than debts to Governments, with the result that a level playing field does not exist? Is any effort being made to try to stop the repatriation of so much money to commercial companies in the advanced part of the world? That would create a more level playing field in commercial terms for the countries that we, through the Government, are trying to help, and thus make it easier for them to escape indebtedness and poverty.
    Mr. Brown: I thank my hon. Friend, and I acknowledge the work done in his area and throughout Britain by the churches and the non-governmental organisations to raise the issue of debt relief. There is an arrangement in the Paris Club for dealing with commercial debt, but most debt owed in Africa is owed to official sources. That is why our decision—which has been followed by most other major countries—to give 100 per cent. debt relief to those countries moving through the debt reduction process is of particular benefit to Africa.
    Many of the countries involved wish to be able to borrow money in the future to pay for the infrastructure projects and the work in health and education that they want to undertake. They must be in a position to be able to do so. We do not want to put them in a position that means that they can never borrow again.
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    I share my hon. Friend's worries about the speed of the process, and the Government are to put forward new proposals at Genoa. We cannot deal only with the conflict countries; we must ensure that the debt relief being given at the moment is sustainable. That means that we have to look at the particular position of a few more countries. A number of countries are not applying for debt relief. Most of those that do apply will get it either this year or next, subject to the civil wars in those countries coming to an end.
    Dr. Jenny Tonge: I hate to dispel the warm glow in which I am sure the Chancellor is basking this morning, but does he agree that the debate about debt relief has clouded the point that if this country carries on increasing its aid budget in the way that it does at the moment, it will take 50 years to reach the United Nations recommended target of 0.7 per cent? What is he going to do about that, as it is so much more important?
    Mr. Brown: First, the percentage is increasing and has increased over the last few years. It is rising to 0.31 per cent. and will then rise to 0.33 per cent and we will look at the matter again in the spending round. In our manifesto, we committed ourselves to substantial increases in international development aid, and we will look at that matter in the spending round decisions next year. I do not accept what the hon. Lady says. We are increasing the amount of aid, both in real terms—by about 50 per cent. over the last few years—and in terms of the percentage of national income.
    There are many more things that have to be done. My right hon. Friend the Secretary of State for International Development has not only set up a Department that leads the world, but one that has led the way in untying aid, which I hope that the hon. Lady agrees is important. My right hon. Friend has also called for an end to export credits involving arms and other unproductive expenditure being financed by the Exchequers of Britain and other countries. Equally, she led the way last week in the removal of subsidies for small arms. On all the issues, she and the Government are trying to lead the way.
    On the 2015 targets—which I hope that the hon. Lady will also address when she looks at the issues—the global health fund and the initiatives next year on education are our means of moving matters forward so that we can meet those targets. We are increasing resources for overseas aid, and we are doing so sustainably. It is unfortunate that the Liberal Democrats all the time make new spending promises that they know perfectly well they cannot afford.
    Mr. Andy Reed: I congratulate my right hon. Friend the Chancellor on his personal commitment to the work that has been done over the last few years, but does he accept that, unfortunately, some of the devil is in the detail? Has he seen the report from Jubilee Plus this week, which shows that, under the heavily indebted poor countries initiative, it is possible that some of the countries may not reach their growth targets, which would cause particular problems for those that try to exit the HIPC initiative over the next few years? Will he use his influence on the G7 and G8 to ensure that the details of the HIPC initiative deliver the poverty reduction that all of us in this House want?
    Mr. Brown: I thank my hon. Friend for taking a long-term interest in the issues and the all-party work that has been done. There are six countries—Burkina Faso, Malawi, Mali, Niger, Rwanda and Tanzania—in respect of which we are now working with the World Bank and the IMF because of the central issue of the sustainability of debt relief. HIPC must offer a sustainable exit from debt, and we will ensure that that takes place. That is why we are prepared to look at all means of doing that, and we will work with the international institutions to secure it.
    I do not think that the reports published this week should get away from the central argument. It is only if we co-operate with other countries and work to strengthen the international institutions that we will make progress on the issue. The idea of some—that we could make any difference by abandoning the international institutions and retreating into isolationism or protectionism—is absolutely wrong. I believe that reform of international institutions is the agenda on which all those who believe in social justice should focus their attention.

    R and D Tax Credit
    Dr. Vincent Cable: What consultations he has had with business representatives on the proposed research and development tax credit. [3326]
    The Chancellor of the Exchequer (Mr. Gordon Brown): In 2001, we introduced tax credits for small firms' research and development. Consultation has now closed on extending a new tax credit to larger companies and we will make our views known in the pre-Budget report. Today we are also publishing a further consultation paper on the wider reform of corporation tax, including measures for intellectual property tax relief and capital gains relief for the sale of subsidiaries. The consultation period with corporations will last until the pre-Budget report.
    Dr. Cable: Is the Chancellor aware of the strength of feeling among companies at the cutting edge of British technology that the Government's proposals as they stand—to give tax credits to new and incremental research and development—have two profound difficulties? The first is that they introduce a great deal of additional complexity into an already complex system. The second is that they introduce major distortions into business decisions by rewarding one type of research and development with tax credits and other forms not at all. Will the Chancellor say that he is still open to representations on reforming the proposals along those lines?
    Mr. Brown: We are still open to representations. We have put forward a number of proposals to business so that we can increase the share of research and development undertaken in Britain. In Japan and America, it averages about 3 per cent. of national income. In Britain, it is about 1.8 per cent. We have to do more. The research and development tax credit for small firms costs us £150 million a year, but that system allows small firms to finance their research, even before they make profits. We are consulting companies about whether we should proceed with a similar system or with what we may call a relief for additional research. The hon. Gentleman should point out to the House that the proposal that he
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    favours would cost several hundreds of millions of pounds more than the other proposal mooted in the document. In the Liberal Democrat manifesto, we counted 43 spending commitments that were not financed and that commitment was not in the manifesto, which brings it to 44. Somehow and sometime the Liberals will have to face up to the fact that they cannot keep promising money when they do not have it.
    Mr. Peter Pike: Does my right hon. Friend accept that it is crucial to assist with research and development to secure jobs in industry in towns such as Burnley if we are to tackle the sorts of problem that we faced in that town earlier this month?
    Mr. Brown: I agree with my hon. Friend that manufacturing industry and the renewal of industry in areas such as his are crucial and part of the Government's policy. We have not only cut corporation tax and small business corporation tax—to 10p for smaller firms with profits up to £50,000—but introduced the research and development tax credit and made permanent capital allowances for manufacturing industry for small and medium-sized businesses. He will be interested to know that in the next few months, following our permission from the European Commission, we will be setting up regional venture capital funds from which businesses developing in the regions, including the north-west, can draw. That measure is in addition to the work that has to be done—I had a conversation with him yesterday about these matters—to improve the new deal and the facilities that it offers to people who are unemployed, particularly the long-term unemployed, in some of our poorest communities. We are determined that in this Parliament we will take the additional action that is necessary so that no young person and no long-term unemployed person will go without the offer of a job.

    Pensioner Taxation
    Mrs. Cheryl Gillan (Chesham and Amersham): If he will make a statement on the taxation of pensioners. [3327]
    The Paymaster General (Dawn Primarolo): As a result of our policies on tax, seven out of 10 pensioners pay either no tax or pay at the 10p rate. Our personal tax and benefit changes mean that pensioner households will be £600 a year better off on average compared with 1997.
    Mrs. Gillan: The hon. Lady's reply will be cold comfort for pensioners, as it does not reflect the reality. Will she admit that, under the Labour regime, pensioners have had more and more of their income taken in taxes? Will she also confirm that by 2003 more than half our pensioners will be subject to means-tested benefits for the minimum income guarantee and the pensioner credit? Is that Labour's way to ensure that pensioners, in the words of the Labour manifesto,
    "have much to give to society"—
    principally, it seems, through increased taxes?
    Dawn Primarolo: I am glad that the hon. Lady is now concerned about pensioner poverty, bearing in mind the Conservative Government's record in office. The tax reforms and the introduction of the 10p rate, as well as the introduction of and rise in the winter fuel allowance

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    and the introduction of the minimum income guarantee, which puts in place a minimum income for the poorest pensioners, are assisting the Government to ensure that the resources that we have go to those in greatest need—the very poorest pensioners. I am sure that if she looks in detail at the proposals for the pensioner tax credit, she will agree that rewarding those pensioners who have saved through the credit is another way to tackle that poverty.
    Mr. John McFall (Dumbarton): I thank the Government on behalf of the poorer pensioners in my constituency for taking their incomes up from £67 for single pensioners to £92. Does my hon. Friend agree that the scandal has been that those on small occupational pensions have been paying too much tax, and that the new pensioner credit is not coming in soon enough to help such individuals? What plans do the Government have to conduct an information campaign so that those hardworking individuals can receive their just reward and the tax rebate that they deserve?
    Dawn Primarolo: As my hon. Friend knows, the minimum income guarantee will be raised again next year, guaranteeing an income to those poorest pensioners. He is right that we need extensive publicity to ensure that those pensioners who will be entitled to the pensioner tax credit can receive it. The Government continue to review their tax policy on those few pensioners who pay tax so that, where possible, they can be removed from the tax system and any rebates to which they are entitled can be paid as quickly and easily as possible.
    Richard Ottaway: The biggest concern of any pensioner is the stability of their pension provider. Does the Minister recognise the concern and trauma of millions of Equitable Life policy holders and the failure of the regulatory authorities to protect their interests? In December 1998, the Treasury encouraged the Equitable to continue with its flawed strategy. Today, the Chancellor of the Exchequer declines to accept responsibility for that disastrous advice. This month, we discover that the Financial Services Authority did not even know that the Equitable was reviewing its financial position. Is it not time that the regulator started regulating and the Chancellor recognised that the buck stops with him?
    Dawn Primarolo: It would be ridiculous on such an important issue for me to stand at the Dispatch Box and give answers that were not based on information and fact. As the hon. Gentleman knows full well, the FSA is preparing a report on the events leading up to the closure of Equitable Life to new business. When we see the report and have the facts before us will be the time to have the discussion.

    Pension Funds
    Mr. Eric Illsley: What proposals he has to relax the Inland Revenue rules regarding the amounts of money which individuals can withdraw annually from pension funds [3328]
    The Economic Secretary to the Treasury (Ruth Kelly): The Government seek to help people to provide for their financial security and comfort in old age. Pensions should provide a secure income throughout retirement, guarding against the risk of savings running out. The Government keep the rules under review and remain open to suggestions of workable and affordable alternative methods for delivering a secure income in retirement.
    Mr. Illsley: I welcome my hon. Friend's commitment that pension funds should be able to provide an income throughout retirement, but is she aware that, due to the lack of availability of gilts in this country, the fall in the value of some pension funds and the interaction of the Inland Revenue rules, the income for some pensioners who run their pensions in that way is falling year on year? Will she consider the impact of the Inland Revenue rules, which I understand were examined as recently as 1999, to see whether any adjustment can be made to prevent that fall in income?
    Ruth Kelly: I presume that my hon. Friend refers to the current state of play on annuities. Annuities are specifically designed to fund a guaranteed income stream in retirement. Certain proposals have been made for their reform. The problem is that the proposals that we have received so far have severe drawbacks. They do nothing to help pensioners who have very small savings, and it is not clear that they would not be costly. However, I remain open to suggestions about how the regime could be reformed. If any hon. Members know of any proposals that are workable and affordable, of course I will listen to what they have to say.
    Mr. John Greenway (Ryedale): The hon. Lady will know that my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) has tabled a Bill on this matter. Second Reading is not until January, so I hope that the six months available can be used constructively to look again at the proposals of Dr. Oonagh McDonald on the draw-down of annuity by the age of 75. Many constituents of hon. Members on both sides of the House believe that that rule needs to be changed and is leading to gross injustice.
    Ruth Kelly: I certainly understand the concerns that the hon. Gentleman has raised although I repeat that, at the moment, annuities are the only way of providing a secure income flow in retirement. Of course, we have to consider other proposals, and in the next six months, I hope that people will make serious proposals for reform. The hon. Gentleman proposed that we consider Dr. McDonald's suggestions, which are interesting but have cost implications. If annuities and savings funds became more flexible, it is of course possible that people would start to use them not only as savings vehicles for their future pension but also as inheritance vehicles. There is that risk, in which case the cost implications could be severe. However, as I said, I am interested in hearing sensible, efficient and workable proposals. If I can be shown that they are not costly, of course the Treasury will take them extremely seriously.

    Barnett Formula
    Joyce Quin: What plans he has to review the Barnett formula. [3329]
    The Chief Secretary to the Treasury (Mr. Andrew Smith): As my right hon. Friend knows, the Government's spending plans have been set down and agreed for the years until 2003–04, including spending allocations for Scotland, Wales and Northern Ireland. Those allocations are governed by the statements of funding policy incorporating the Barnett formula, and that remains the Government's policy.
    Joyce Quin: Does my right hon. Friend appreciate that, despite the welcome increases in public spending in the regions, the Barnett formula continues to be the focus of public concern and public attention, especially in the north-east of England? Indeed, the issue was raised several times during the general election campaign. Given the Government's commitment, which I very much hope that they will honour, to hold referendums on regional government in England, does he agree that we should grasp the opportunity to devise a long-term formula, more closely related to needs, which would benefit the whole of the United Kingdom?
    Mr. Smith: My right hon. Friend refers to remarks made during the general election campaign and she will be aware of what the Prime Minister said. I have nothing to add to his words. However, for those who have concerns about the Barnett formula, I point out, first, that it is not the formula that is responsible for the inequalities in funding about which people are worried. Those are historic matters which, of course, the Barnett formula addresses. It is a convergence formula—something on which we receive representations from other parts of the United Kingdom.
    Secondly and importantly, I am glad that my right hon. Friend welcomes the substantial increases in public expenditure and the benefits that they bring to the north-east and other regions. Money from, for example, the new deal, the working families tax credit and the child tax credit, the extra help for pensioners and the employment credit that will operate from 2003 give extra resources precisely to those areas that need them most, including of course the north-east.
    Mr. Simon Thomas: I welcome the new honesty from the Minister about the fact that the Barnett squeeze does exist in Wales and Scotland. What is the real justification for the formula, other than as a bad habit or for the avoidance of blood on the carpet? Does he realise that Wales, Sheffield, Cornwall and Liverpool will lose out in additionality from European funding until we get a better and more equitable funding regime in these islands? Is it not time to replace the Barnett formula with a new relationship between the nations and regions of these islands? Is he not enamoured of a needs-based formula for Wales and fiscal autonomy for Scotland?
    Mr. Smith: I thought that the nationalists did not want a formula at all, but to be wholly responsible for raising and spending their own money. We have shown sensitivity to the particular needs of regions and countries.
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    The hon. Gentleman refers to structural funding: in the case of Wales, we specifically made additional provision in recognition of the objective 1 funding. He should be thanking us for that, not complaining about it.
    Mrs. Louise Ellman: What mechanism does my right hon. Friend have for relating public spending to public needs in the English regions? Will he consider spending billions of pounds of public funds through the science research councils, especially in relation to the regional implications and the development of the knowledge economy, particularly in the north-west?
    Mr. Smith: I was fortunate enough to launch our knowledge economy White Paper in the north-west, and I know how much of a contribution the investment in science is making there, building up clusters and building on the traditional strengths of industry in the region. There is innovation and new investment in pharmaceuticals and other sectors in which the north-west has a relative competitive advantage. We will build on that in the interests of my hon. Friend's constituents. Long-term unemployment in the region has dropped very sharply, thanks to the Government's initiatives. She asked what mechanisms we have for relating public expenditure to need; I think that the new deal is the best example.

    Climate Change Levy
    Miss Anne McIntosh: If he will make a statement on the estimated revenue to the Treasury of the climate change levy from (a) manufacturing and (b) agricultural firms. [3330]
    The Financial Secretary to the Treasury (Mr. Paul Boateng): The climate change levy will raise an estimated £1 billion in its first year, all of which will be recycled back to business through cuts in national insurance contributions and support for energy efficiency.
    Although the levy is broadly revenue-neutral, it is not possible to say at this stage what the effects on any specific sector or industry will be. That will depend on several factors, including the future energy consumption of firms in the sector and employment levels in those firms, the number of energy-intensive firms in the sector that are eligible to receive a discount on the main rates of the levy by signing up to an energy efficiency agreement, and what use firms in that sector make of electricity generated from levy-exempt new renewable sources of energy and combined heat and power.
    Miss McIntosh: I thank the Minister for that reply. Does he accept that the Government are discriminating between sites that are covered by integrated pollution prevention and control and those that are not? Does he accept that businesses are now the principal tax collectors in this country? What would he say to Chennell and Armstrong, a firm in my constituency, which will pay out £3,562 more in tax but receive a reduction in national insurance contributions of only £78?
    Mr. Boateng: No. This is the Government who cut corporation tax and capital gains tax, and introduced generous capital allowances as part of the climate change levy. The hon. Lady should welcome all that, not criticise it.
    Mr. Colin Challen: Does my right hon. Friend agree that the best leader for the Conservative party would be Dr. Faustus, who believed that a short-term gain pays off with a long-term pain? What is the cost to the country of not leading in the development of new technology to combat climate change? What is the cost to the country of businesses suffering the effects of flooding and other consequences of extremely severe weather? All those costs are mounting, and if we do not deal with them, we will have a long-term pain.
    Mr. Boateng: Given the record of Conservative Members, I do not think that Dr. Faustus would have got through the first round. [Interruption.] They don't like it up 'em. The whole House recognises that combating climate change and reaching the Kyoto targets are
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    desirable objectives. This is a business-friendly tax, and one that the whole House welcomes, or ought to welcome, as it should welcome the good news that we are due to reach those targets, with 5 million tonnes of carbon saved by 2010.
    Sir Patrick Cormack: Will the Minister look carefully at the impact of the tax in those areas that have been particularly affected by foot and mouth disease? Does he accept that in many of those parts of the country, any extra burden is crippling?
    Mr. Boateng: The hon. Gentleman makes a very important point. We are concerned to make sure that in rural areas, particularly those affected by foot and mouth, Customs and Excise takes a sympathetic attitude to the problems experienced by farmers. We have not only made sure that energy-intensive parts of agriculture have access to the 80 per cent. reduction, but established a Customs and Excise national advice centre, which has a specific remit to give advice and help on claiming discounts, on collection arrangements, on other technical issues relating to relief and, importantly, on arrangements for deferring payment of VAT, where that will help.

Business of the House
12.30 pm
Mrs. Angela Browning (Tiverton and Honiton): Will the Leader of the House please give us the business for the week after the recess?
The President of the Council and Leader of the House of Commons (Mr. Robin Cook): The business for the first week after the recess will be:
MONDAY 15 OCTOBER—Second Reading of the Football (Disorder) (Amendment) Bill.
TUESDAY 16 OCTOBER—Remaining stages of the European Communities (Finance) Bill.
Motion to approve the Ministerial and Other Salaries Order 2001.
WEDNESDAY 17 OCTOBER—Third Reading of the European Communities (Amendment) Bill.
Mr. John Bercow: Ghastly!
Mr. Cook: I knew that I would have the hon. Gentleman's support for that.
THURSDAY 18 OCTOBER—Opposition Day (2nd Allotted Day). There will be a debate on an Opposition motion, subject or subjects to be announced.
FRIDAY 19 OCTOBER—Debate on drugs strategy on a motion for the Adjournment of the House.
The provisional business for the following week will include:
MONDAY 22 OCTOBER—Remaining stages of the Homelessness Bill.
Mrs. Browning: I thank the Leader of the House for that information. Before we discuss the business for the week following the recess, may I say that today should have been renamed "Gardeners' Question Time" because there are no fewer than 67 Government-planted questions on the Order Paper, no doubt in the hope that the answers would not be noticed by hon. Members who are tidying their desks and waiting to depart for the recess?
While I am on the subject of unfinished business and what hon. Members might notice in the next 24 hours, will the Leader of the House confirm that before the House rises tomorrow, the Government will have placed in the Vote Office the promised new ministerial code of conduct designed to prevent a repetition of the controversies that surrounded the right hon. Member for Hartlepool (Mr. Mandelson) and the hon. Member for Leicester, East (Mr. Vaz)? As we understand it, it is to be accompanied by an inaugural code of conduct to govern Ministers' special advisers and spin doctors to stop the bullying of civil servants. I hope that the right hon. Gentleman will reassure me that that document will be made available and not just slipped on to the shelves once the House has risen.
I also wonder whether the Leader of the House will arrange for the Secretary of State for Transport, Local Government and the Regions to come to the House in the week after the recess. The Prime Minister appointed Mr. Kiley during the election when there was no opportunity for us to discuss his decision. Yesterday, the Secretary of State sacked Mr. Kiley by press release.
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Again, the House has had no opportunity to become acquainted with the background and the reasoning behind that.
Perhaps the Secretary of State for Transport, Local Government and the Regions will deal with another matter when he comes to the House, which my hon. Friend the Member for Ryedale (Mr. Greenway) raised with the Prime Minister yesterday. My hon. Friend expressed concern that the GNER east coast main line contract might be a short-term contract. In reply, the Prime Minister said:
"Some franchises may be short, while others may be longer. That is sensible, because it gives us the flexibility that we require. As for GNER and the east coast main line, that decision will be taken shortly." [0fficial Report, 18 July 2001; Vol. 372, c. 286.]
So shortly was the decision taken that, no sooner had the right hon. Gentleman uttered those words than the Secretary of State announced—again, by press release—that the contract had been renewed for only two years.
Despite what the Prime Minister said yesterday, it is obvious that the Government have torn up their rail policy and delivered a slap in the face for the Strategic Rail Authority. Given that there are so many pressing issues for which the Secretary of State for Transport, Local Government and the Regions has responsibility, he should come to the House not just to make a statement, but for a whole afternoon.
Mr. Cook: First, on my hon. Friends' skills in gardening, I am repeatedly pressed in business questions to provide assurances that statements will be made while the House is sitting, not after it has risen. It is to my hon. Friends' credit that they have worked hard to ensure that their questions are answered while we are sitting.
On the ministerial code and special advisers, I am advised that the answer is yes; it will be published and be available to the House before we rise, and I shall seek to ensure that that takes place.
Mr. Kiley was appointed in the spring on the basis that he agreed that he would carry out discussions with the bidders on the public-private partnership plan and that he would try to seek agreement. That was the basis of his appointment, but three weeks ago, he said that he could not carry it out and could not deliver what he had agreed to deliver—an agreement with the contractors. It is well known that, this week, my right hon. Friend the Secretary of State for Transport, Local Government and the Regions received an approach from the former chairman of London Transport and a majority of the board, saying that they thought it impossible to work with Mr. Kiley. In those circumstances, my right hon. Friend had the choice of sacking the majority of the board or sacking Mr. Kiley, and I would not like to think what the House would have done if he had sacked the majority of the board.
On GNER, it is the case that because of the very substantial infrastructure works required following the Hatfield incident, it is not presently possible to agree with the bidders a long-term franchise of 20 years. That is still the aspiration of the Secretary of State for Transport, Local Government and the Regions, but in the meantime, to provide continuity, he has extended the present franchise by two years to 2005, but I stress that the agreement to extend it is not simply a matter of the time in that agreement; there is also provision to upgrade the London-Leeds service, so that people can travel every

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30 minutes, and for early placement of orders for a new fleet of inter-city trains and early investment in station improvements. All of those will be real gains for passengers and are a welcome result of the announcement that my right hon. Friend made the other day.
Finally, the hon. Lady will have noticed that the last Bill that I mentioned in the business statement was the Homelessness Bill, to which we shall return on the Monday of the second week after our return. She will also recall that I gave an undertaking to the House that we would not programme that Bill, to find out whether we could make progress by agreement. I am pleased to say that proceedings on the Homelessness Bill have been completed in Committee in advance of the date agreed. I welcome that, and provided that we continue to get that co-operation, we will be able, on a case-by-case basis, to consider whether programming motions are required.
Harry Cohen: When we return after the recess, can we have an early debate about the London underground because one of Mr. Bob Kiley's persistent criticisms has been that the Government's PPP scheme obfuscates management? I should like to know what the role of London Transport is. Is it just a dog that barks to the Government's tune? What is its future? The infrastructure companies are very secretive. Transport for London, under Mr. Bob Kiley. will eventually control the underground, but only partially. The Government have a primary responsibility for the whole system, but are keeping it at arm's length. So can we have a debate to sort out who does manage the London underground?
Mr. Cook: My hon. Friend cannot have it both ways; he cannot insist that we listen to the voice of London Underground and then complain when we listen to the majority of the London Underground board, who clearly told the Secretary of State that they could not continue to work with Mr. Kiley and did not think he could find a way forward. The answer to my hon. Friend's question is clear: at the end of the public-private partnership, London Underground and London Transport will manage the service; they will determine the service; and they will be responsible for safety.
Mr. Eric Forth (Bromley and Chislehurst): That is waffle.
Mr. Cook: No, I am not waffling at all. The reality is that there will be a public service, publicly run by London Underground.
Mr. Paul Tyler: In the light of this week's events, does the Leader of the House accept that Select Committees are only one way in which the House exerts its authority over the Executive and holds them to account, and undertakes proper scrutiny on behalf of the public? Does he accept that the Home Secretary's announcement of the crime figures today to the media and not directly to the House is not acceptable, as it does not give us an opportunity to question him on what is clearly a deplorable situation, especially in relation to violent crime and the clear-up rate? Does he also accept that for Members to be given a spinny document by the new Home Secretary entitled "Time to Deliver" today is totally inappropriate? With street crime as bad as it is, it should surely be "Time to Stand and Deliver".
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Does the Leader of the House accept that there really should not be 50 different mini-statements by way of written answer on the last day before the summer recess?
The Leader of the House will be aware that the House has on the whole been able to maintain an all-party approach to events in Northern Ireland. Does he accept that the situation is very fragile at the moment and that peace in Northern Ireland is extremely delicately balanced? Will he give an assurance that, if the House is faced with a major change in the situation in Northern Ireland, it will be recalled?
Mr. Cook: I cannot accept the hon. Gentleman's comments on the publication of crime statistics. Annual crime figures have repeatedly been produced in public when they are ready and are available for debate by the public as well as by Parliament. They have not been released in a statement to the House. As Leader of the House, I do not think that it would be possible to manage business if we had to have a statement for every annual publication of statistics.
On the substantive issue, let us not lose sight of the fact that the figures show that overall crime is down by 2.5 per cent., burglary is down by 8 per cent and vehicle crime is down by 7 per cent. It is true, as the hon. Gentleman says, that violent crime is up. It is up by 3 per cent., which is a lot less than the trend over previous years. Although any increase is too much, the trend is down. I hope that our efforts to reduce violent crime will achieve a decline, as there is in other crimes at the present time.
Obviously, if there is a serious situation in Northern Ireland, the recall of Parliament is an option for the Government, and Members can call for it. However, it would be a very unusual Leader of the House who gave a guarantee that the House would be recalled before it even adjourned.
Mr. Tony McWalter: Does my right hon. Friend accept that it is rather disappointing to see on today's Order Paper that the Science and Technology Committee is not to be constituted prior to the summer recess, especially given the Government's commitment to a knowledge-based economy, in which matters to do with science, engineering and technology should feature prominently? Is it his view that that Committee is not as important as others—or can he give some other reason?
Mr. Cook: My hon. Friend will be aware that we have set up every other departmental Select Committee and, indeed, pretty well every other Select Committee of the House. Seventeen of them met yesterday. The sole reason why we have not been able to set up the Science and Technology Committee is that we do not have a satisfactory number of nominations to it. That matter is beyond the powers of the Leader of the House.
Mr. Eric Forth: Why on earth have we not had a statement from the Prime Minister about Northern Ireland? Does it not seem odd, even to the Leader of the House, that there were protracted crisis talks last week but the House of Commons has not been informed of where we are, where we are going, what is going on, who said what and what the Government expect to happen? How can we possibly contemplate a summer

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recess when we have all been left in complete ignorance of what is going on and what the future holds? Please will the Leader of the House get the Prime Minister here tomorrow for an emergency statement?
Mr. Cook: Since the Prime Minister is due to attend the G8 summit tomorrow, I should have thought that most Members, if not the right hon. Gentleman, would attach greater importance to the agenda of reducing world poverty, launching a trade round—
Mr. Forth: No.
Mr. Cook: The right hon. Gentleman speaks for himself and says that he does not attach importance to poverty reduction, the world trade round or tackling the AIDS epidemic in Africa, with which my right hon. Friend will be dealing on Friday—[Interruption.]
Mr. Speaker: Order. There is no point in the right hon. Gentleman asking the Leader of the House a question and then shouting him down. What is the point of that?
Mr. Cook: I am grateful to you, Mr. Speaker.
The right hon. Gentleman perfectly illustrated why a statement on Northern Ireland at the present time might not help. He demanded to know who said what to whom. I cannot imagine a statement detailing that as anything other than disastrous in the context of talks that are continuing and will continue during the recess.
Mr. Tom Harris: May I draw my right hon. Friend's attention to the increasing number of personal injuries resulting from the use of air rifles and air pistols? Is he aware that such attacks can often result not only in blindness and partial blindness but in permanent brain damage? Will he give Members an early opportunity to debate measures to regulate, if not prohibit, the use of those weapons?
Mr. Cook: My hon. Friend has raised a serious issue and I fully understand his concern, which he has expressed to me privately as well as publicly. I can assure him that there will he many opportunities after we return from the recess to debate crime and criminal justice. I am sure that my hon. Friend will be able to make his comment in that context.
Mr. Patrick McLoughlin: In March, the then Minister of Agriculture, Fisheries and Food told us that foot and mouth was under control. Yesterday, there were 10 confirmed cases. Will the Leader of the House review the information and advice given to farmers by the current Secretary of State for Environment, Food and Rural Affairs and her Department about what they have to do in the course of this outbreak? Public footpaths are open, some through farmyards, yet farmers are told in a pamphlet and video issued by the Department to wash their wellies and change their overalls between every task. Public footpaths through farmers' own farmyards are open, yet if their children visit neighbouring
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farms, they are told to change their clothes. What is the point of giving that kind of information and still saying that public footpaths have to be open?
Mr. Cook: The hon. Gentleman will be aware that the statement made yesterday about footpaths provides that some of the counties most affected, such as Cumbria and Devon, can retain blanket bans. In other counties where blanket bans have been removed, it remains open to local authorities to close individual footpaths; indeed, they would be expected to close footpaths within 3 km of any affected farm. It is important that farmers and others involved in the livestock industry observe every possible biosecurity measure because they handle animals and are therefore at greater risk than people walking across the land.
Mrs. Alice Mahon: Has the Leader of the House seen early-day motion 23, which was tabled by my hon. Friend the Member for Aberdeen, North (Mr. Savidge)?
[That this House expresses concern at President Bush's intention to move beyond the constraints of the Anti-Ballistic Missile Treaty in developing missile defence; and endorses the unanimous conclusions of the Foreign Affairs Select Committee, which recommended that the Government voice the grave doubts about NMD in the UK, questioned whether US plans to deploy NMD represent an appropriate response to the proliferation problems faced by the international community and recommended that the Government encourage the USA to explore all ways of reducing the threat it perceives.]
To date, 264 Members of Parliament have expressed deep concern about the United States proposals to tear up the anti-ballistic missile treaty and deploy the national missile defence system. Given that the Prime Minister is today meeting President Bush and that the matter will no doubt be discussed, does he have any intention of coming to the House and making a statement about our position before we go into recess?
Mr. Cook: I have no doubt whatever that that matter will be on the agenda when the Prime Minister meets President Bush and that they will be asked about it when they conclude their discussions. The American Administration are not proposing, as my hon. Friend put it, to tear up the anti-ballistic missile treaty. What they are doing, and what we have encouraged them to do, is have a dialogue with Russia to see if they can find an alternative strategic framework. We should encourage the United States and Russia to reach that agreement; I would not rule out the possibility that it can be reached.
Mr. Andrew Turner: Could the Leader of the House invite the Secretary of State for Environment, Food and Rural Affairs to come to the House and explain why there is such discrimination against small livestock farmers? When they are taking small loads of animals to slaughter they have to have them inspected twice by vets, whereas large farmers can take their animals straight to slaughter and are subject to only one inspection.
Mr. Cook: I shall certainly draw the attention of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs to the hon. Gentleman's

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observation about the differential impact on smaller farmers. I can well understand the familiar problem that smaller enterprises perhaps find it more difficult to meet the burdensome requirements which are very important at this time of biosecurity measures.
My right hon. Friend the Prime Minister shares the concern that has been expressed in the House about the stubborn tail-end of the disease and the failure to achieve the point, which we all want to get to, of total eradication. He has invited my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs to look at what further measures we might take to speed up the eradication of the disease.
Mr. Michael Clapham: Has my right hon. Friend seen early-day motion 149, which was tabled my hon. Friend the Member for Easington (Mr. Cummings)?
[That this House recognises that the 50 per cent. clawback by the Government of any surplus of the Mineworkers' Pension and Superannuation Scheme is grossly unfair; and invites the Government and the trustees of the Pension and superannuation Scheme to enter into negotiations and agree upon a more just appointment of the surplus and so enhance the pensions of thousands of retired mineworkers and widows.]
The early-day motion draws the attention of the House to the fact that the Treasury still receives half of all the surpluses from the mineworkers' pension scheme and the staff superannuation scheme. My right hon. Friend may well be aware that the combined value of those two schemes is about £25 billion. The average pension paid to a member of the mineworkers' pension scheme is about £36, and 28,000 beneficiaries to the scheme receive about £10. Will my right hon. Friend therefore urge the Treasury team to meet the administrators of the scheme as soon as possible to review the 50 per cent. take with a view to devising a procedure that will make more money available to those beneficiaries at the bottom of the pile?
Mr. Cook: I fully understand my hon. Friend' s anxiety and I know that there are hardship cases such as those that he mentioned. The original bargain between the Treasury and the miners' pension scheme was that the Treasury would guarantee that pension payments would increase in line with inflation even if there was a deficit in the scheme. As my hon. Friend knows, there is currently a healthy surplus in the scheme, which means a substantial accrual rate to the fund year on year.
The other side of the bargain is that, in return for the guarantee in case of a deficit, the Treasury has the right to take up to 50 per cent. of any annual increase in the surplus. However, I full understand my hon. Friend's point. He knows that the trustees are currently reviewing the scheme. The Government are awaiting the outcome, which we are willing to discuss with trustees when we receive the review.
Mr. Peter Robinson: The Leader of the House knows that the Prime Minister is expected to complete a set of proposals with the Prime Minister of the Irish Republic next week. The House will be in recess, and the right hon. Gentleman may be aware of the rumour that the information will be provided only to selected
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individuals. Will he ensure that it is published so that all hon. Members can see the proposals as soon as they are completed?
Mr. Cook: I am confident that, in the event of the completion of talks with all parties—I hope that they will be successful—the outcome will be made publicly available. Even if we were minded otherwise, any agreement between all parties would become public knowledge quickly and loudly.
However, I cannot give a commitment that my right hon. Friend will disclose the outcome of talks with any one party, whether the Prime Minister of Ireland or one of the Northern Irish parties. Any such outcome is sensitive to trying to achieve an overall agreement. We all support that.
Ms Diane Abbott: Will the Leader of the House make time when we return for a debate on the role of Select Committees? They are Committees of the House and their chairmanship is a matter for hon. Members. It is wrong for Government Whips to insist on a named individual being Chairmen. They may make suggestions but the chairmanship should be up to Select Committee members.
Mr. Cook: We have not been short of opportunities to debate Select Committees this week. Indeed, we have another debate on them today. However, the Modernisation Committee—
Mr. Forth: Oh, no!
Mr. Cook: I stress to the right hon. Gentleman that there is no point in the House asking for proposals and then objecting to the Committee that is plainly the logical body to introduce them.—[HON. MEMBERS: "He wants morel I am not sure that the right hon. Gentleman wants more Select Committees. However, if he wants Select Committees whose members are chosen transparently and independently, he should welcome the fact that that is the first priority for the Modernisation Committee. I hope that we can present a report shortly after the recess.
Mr. Owen Paterson: Yesterday, the Prime Minister hid behind the Royal College of Veterinary Surgeons, and stated that rural people had not demanded a full public inquiry. Does the Leader of the House understand that so many sectors of the rural economy have been devastated by foot and mouth that the countryside will accept nothing less than a full, public inquiry under the independent, impartial chairmanship of a judge?
Mr. Cook: My right hon. Friend the Prime Minister did not hide behind the Royal College of Veterinary Surgeons—[HON. MEMBERS: "He did."] No, he did not. He accurately reflected its statement, in which it made it plain that it favoured an inquiry that resembled the one that followed the last outbreak of foot and mouth, rather than the protracted public inquiry into BSE.
It is worth while reflecting on the reasons for the royal college's view. It wants any lessons to be learned and any conclusions to be drawn as expeditiously as possible through a proper, full inquiry. As the House knows,

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a public inquiry takes years. It is a matter of judgment whether we want to wait for years before learning the urgent lessons of the recent outbreak.
David Winnick: Further to his comments of a few moments ago, could my right hon. Friend give an indication of when it is likely that the Modernisation Committee will present proposals on changes in decisions on Select Committees membership? It would be useful to have a debate on that subject later this year. Is he aware that many of us are encouraged by the fact that the Government seem to have learned the lessons from Monday—unlike the last Tory Government, who never learned the lessons from 1992 when they prevented the hon. Member for Macclesfield (Mr. Winterton) from being reappointed to the Health Committee?
Mr. Cook: I congratulate my hon. Friend on having made the second mention of the Modernisation Committee, thereby obliging the right hon. Member for Bromley and Chislehurst (Mr. Forth) to leave the Chamber.
On the question of a timetable, I think that the best I can do for my hon. Friend is to give an assurance that we will bring one forward as quickly as possible. How quickly that is depends of course on how quickly we can establish agreement within the Committee. However, we have agreed to meet in September to consider the matter. If we make good progress at that meeting in September, I would hope that we can bring forward a report early in our proceedings after the recess.
Mr. Douglas Hogg: May I reinforce the request by my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) for a statement or a debate on the east coast main line? Does the right hon. Gentleman understand the dismay at the decision not to grant a long-term franchise? Does he realise that a two-year extension is bound to put back the date when we will see continuing investment of a substantial type, and that only the grant of a long-term franchise will really provide the basis for continuing large investment in an overcrowded line?
Mr. Cook: There is nothing between the right hon. and learned Gentleman and the Government on whether there should be a long-term franchise; we would prefer a long-term franchise. The reality is that so much infrastructure work is required post-Hatfield that it was not practical to reach an agreement with bidders on the basis of the current state of the infrastructure and the work that is required to it. That is the reason, and the only reason, for the two-year delay.
GNER is of course one of the operating companies. It is itself, therefore, very much responsible for the rolling stock, but not for the track. A two-year period should not of itself inhibit investment in rolling stock, as any successful bidder thereafter will be obliged to take over that rolling stock.
Mr. David Clelland: Did my right hon. Friend hear the exchanges in Treasury questions on the Barnett formula? If he did, he would be aware that there are calls from both sides of the House for the system of
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funding the regions and nations of the United Kingdom to be renewed and reviewed. May we have a debate on the matter immediately after the recess, so that the House can help the Government to take the matter forward and we can introduce a system that is based on real need and fairness?
Mr. Cook: I am very grateful to my hon. Friend for his offer of help in taking the matter forward. However, he will be aware that the Government have repeatedly said that we have no plans to review the Barnett formula.
Mr. David Heath: Will there be an opportunity for the House to discuss—it would be particularly appropriate now as President Bush is in the country—the situation of my constituent Mr. Steve Morgan of Frome, an experienced journalist who accompanied the Greenpeace demonstration against the star wars test and is now facing charges in Los Angeles, subject to a minimum five-year prison sentence for photographing a peaceful demonstration? Will there be an opportunity for the Foreign Secretary to say what consular support is being given to Mr. Morgan and what representations have been made at the highest level for his immediate release?
Mr. Cook: I am happy to tell the hon. Gentleman that his constituent is getting full consular support. We have been in contact with him and the other UK nationals involved since the day of their arrest. We have also been in contact with their lawyer. We will continue to do all we can to provide consular support to him. I know from my previous work at the Foreign Office that it would be counter-productive for us to intervene politically in what is a judicial matter, but all possible consular support will be given.
John McDonnell: Is my right hon. Friend aware that the Government's plans to part-privatise air traffic control are rapidly falling apart? It looks as though the income generated from the sale will not even cover the inherited debt of the National Air Traffic Services. Can we have a ministerial statement in our first week back giving us a progress report and looking at the options on how we can dig ourselves out of this fiasco?
Mr. Cook: My hon. Friend will be aware that there is a delay in the bid coming from the consortium. We understand that the delay reflects some financial issues which plainly have to be resolved to the satisfaction of the bidder. However, we expect the bid to proceed and the process to continue. I am sure that it is a matter on which right hon. and hon. Members will wish to table questions when we return.
Pete Wishart: Regardless of what the Leader of the House said earlier, we had an admission from the Treasury this morning that the Barnett formula is indeed a convergence formula. The Government have admitted to the existence of the Barnett squeeze. Will the Leader of the House respond to that announcement by ensuring that there is an early debate on the subject so that we can examine this admission and the effect that the Barnett squeeze will have on Scottish public services.
Mr. Cook: The Barnett formula reflects population changes. There is no way in which the Treasury or anyone

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else can protect any area from a change in the population base on which the Barnett formula is calculated. I am wearily resigned to the fact that this is an issue that we will hear much about when we return and I have not the slightest doubt that it will be repeatedly ventilated in the Chamber by people on both sides of the argument.
Joan Ruddock: Has my right hon. Friend seen early-day motion 72 on women in Parliament?
[That this House believes that a democratically elected Parliament should seek to reflect the make-up of its population; notes that while women make up 51 per cent. of the UK population, only 18 per cent. of elected honourable Members are women; considers such an imbalance to be unacceptable in the 21st century; welcomes the Government's promise in the Queen's Speech to draft legislation to enable political parties to take positive action in the selection of women as parliamentary candidates; and urges the Leader of the House to bring forward the legislation as soon as possible to ensure the selection of many more women candidates for the next general election.]
In two weeks it has attracted the signatures of more than 100 Members representing five different political parties. Will my right hon. Friend join me in deploring the fact that only 18 per cent. of elected Members are women and can he tell us when he might find an opportunity to introduce legislation that would enable political parties to make some attempt to tackle that democratic deficit?
Mr. Cook: I fully share my hon. Friend's concern at the relatively small number of women in Parliament and the fact that it has declined rather than increased at the last election. I would like us to take measures that would give a better prospect of the increase in women in Parliament and make sure that this democratic Chamber fully represents all of Britain. In respect of the legislation to which my hon. Friend refers, I cannot introduce legislation that does not exist. I will look sympathetically at timetabling a Bill if one can be introduced soon after the recess, but at the present time we await confirmation that such a Bill is ready.
Mr. Christopher Chope: When can we have a debate about the Government's home energy efficiency scheme which has failed so miserably and has caused pensioners in my constituency to wait more than a year to get replacement boilers? Will the Leader of the House ensure that the questions that I tabled and that have received holding answers are answered extensively before the end of the week? Written questions are one of the means by which we can hold the Government to account to some extent. Can the right hon. Gentleman ensure that when the House returns all Departments are strongly advised to reply to them within a reasonable time scale? At the moment the standard of Departments is deteriorating badly.
Mr. Cook: I am happy to assure the hon. Gentleman that I shall look into his question about responses to written questions. I very much hope that all Departments will seek to clear all written questions before the House concludes its work for the summer. That would be a normal standard to expect. The home energy efficiency
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scheme is a matter for the Department for Environment, Food and Rural Affairs and I shall convey what the hon. Gentleman has said to my right hon. Friend the Secretary of State. I would stress, however, that the United Kingdom has done well in making sure that energy efficiency is applied across our economy, and to our homes and transport. That is why we are well ahead of the Kyoto targets and are one of the leading nations in the world in making reductions in greenhouse gases.
Mr. Eric Martlew (Carlisle): I note that the first debate after the recess will be on the Football (Disorder) (Amendment) Bill. There is a lot of disorder and dismay in my constituency about the ownership of Carlisle United, which is owned by Michael Knighton, of whom hon. Members may have heard. Three weeks away from the beginning of the season, we do not have 11 full-time footballers, we do not have a manager and we do not have any money. The Football League and the Football Association know about the problems that Carlisle United is facing and are refusing to intervene. My only concern is that when we come back in October Carlisle United will no longer exist. However, I should like to be able to move an amendment to the Football (Disorder) (Amendment) Bill.
Mr. Cook: I am humbled to say that I am unable to promise either a ministerial statement or Government legislation to save Carlisle United. My hon. Friend makes his case forcefully, and I am sure that he has ventilated an issue of deep concern to his constituents and his local press. I am very pleased that he will have an excellent platform on which to repeat his concerns when we resume, on the first day back.
Mr. John Bercow: I hope that the Leader of the House will bear up stoically and with fortitude under the burden of being deprived of our convivial company over the next three months.
Can we please have an urgent statement in Government time on the extraordinary decision of the Department for Environment, Food and Rural Affairs to transport large quantities of ash hundreds of miles from Newcastle to the Shanks and McEwan landfill site at Calvert in my constituency? Ought not the Secretary of State to tell us why it was sensible to transport that ash hundreds of miles from an infected area to an area thus far, thankfully, uninfected with foot and mouth? Would it not be useful for her to tell me how it was proper and courteous of the Department to inform me of the involvement of my constituency in this worrying matter only on the day on which the first transportation took place?
Mr. Cook: I am grateful to the hon. Member for Buckingham (Mr. Bercow) for his concern about my being able to stand tall and survive the absence of his company and that of other hon. Members. Let me say to the hon. Gentleman—no, on this last occasion, I shall call him my hon. Friend—that in Italy I shall say daily to my wife, "I wonder what the hon. Member for Buckingham is getting up to in my absence."
I will draw the hon. Gentleman's remarks to the attention of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and press her on the importance of providing prior notice to Members of Parliament.
Ann Clwyd: Many of us are heavily dependent on mobile phones for communicating with our friends, our offices and our constituents, particularly over the summer holidays, so can we have an early debate on the inadequacy of the service provided by mobile phone companies in large areas of Britain where it is impossible to receive a signal? Vodafone has spent millions of pounds on buying a German company and provided £800 million of share options to its chief executive yet has written to me to say that it cannot afford to spend money on increasing its coverage in parts of Wales.
Mr. Cook: My hon. Friend speaks for the whole House, in that we have all had the experience, somewhere in Britain—often in our constituencies—of being unable to get the connection that we need. I am sure that her point will have been suitably logged by those at Vodafone who monitor our proceedings, and I hope that she will be hearing from them shortly.
Mr. John Wilkinson: The Leader of the House will be aware that by the time we return we will not have had a debate on defence procurement for almost a year. In view of the grave decisions taken recently by Her Majesty's Government, is not a debate long overdue on Bowman, on which we shall have an announcement today; on the cancellation of the future aircraft system for the Royal Air Force; on the possibility that the new aircraft carrier is to be put out to tender to foreign yards; and on the loss of 1,000 jobs on the Clyde following the type 45 order? Is it not high time that the Government faced up to their responsibilities and involved the House in those important matters?
Mr. Cook: In fairness to my right hon. Friend the Secretary of State for Defence, he made a well-attended statement on the type 45 destroyer on which he took many questions from both sides of the House, and he is about to make a statement on Bowman. That is two discussions in the House on defence procurement in two weeks. I do not think either that the House can be accused of failing in its job of scrutiny or that my right hon. Friend can be accused of failing in his job of informing and making announcements to the House.
Andrew Mackinlay: What is the expected time of arrival of the British Overseas Territories Bill from the House of Lords? It is a welcome measure, but it is drawn very narrowly in relation to the important issue of citizenship. I am somewhat disappointed that it does not also embrace the question of representation, a concept that was canvassed by Baroness Symons before the Foreign Affairs Committee. For example, it was mooted that overseas territories might have access to the House and be able to petition it at the Bar. Should not the Government reflect, before they are arraigned before a court, on the fact that the existing representation for the citizens of our overseas territories is deficient in relation to the European convention on human rights? This is ultimately their Parliament, and we will not have full adult franchise until the British subjects peppered around the globe have representation here.
Mr. Cook: I stress to my hon. Friend that the British Overseas Territories Bill fulfils an undertaking that we gave in the last Parliament to extend British citizenship to
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all those in the overseas territories who wish to take it and who fulfil the residency requirements. That was welcomed in the overseas territories, especially but not only in St. Helena, where people felt a sense of injustice that they had lost their rights to British citizenship. This is an important Bill which fulfils our part of a bargain that we made with the Governments of the overseas territories that they would in turn take tougher action to ensure that they had stringent financial measures in place that reflected the international agreements we had made in their name.
On the wider question, we should reflect carefully before taking the steps that my hon. Friend suggests. It is an important principle—and important politically—for the residents of the overseas territories that they are self-governing and only involved with the UK to the extent that we handle their external affairs, defence and international obligations. We must be careful not to take any steps to erode their rights of self-government, which might turn out to be unpopular in the overseas territories.
Mr. Graham Brady: The Leader of the House will know that the Government have confirmed that they intend to close two transplant units in April 2002. The hospitals at Wythenshawe in Birmingham and in Sheffield have been left with an uncertain future for a year. It is a source of great disappointment to those hospitals and the many thousands of transplant patients who depend on them that we still have not had a clear statement from the Government on what their recommended decision will be. Can we have an urgent statement and, for the sake of those hospitals and the people they serve, learn the Government's intentions, so that proper preparations can be made in time before April next year?
Mr. Cook: The hon. Gentleman is right that the concentration of transplant facilities has been under review for some time, and I stress that it is in line with sound medical advice and practice to ensure that adequate specialisation is focused on one site and is not dissipated too widely. I am not aware of the Department of Health having reached a decision on the local consultations or whether it has received a view from the local health authorities, but I shall ensure that if any announcement is made during the recess the hon. Gentleman is informed, preferably in advance.
Mr. Gordon Prentice (Pendle): Given the huge scale of the Government's achievements, can my right hon. Friend the Leader of the House explain why the Government have discontinued their annual report? Is there not a case for having a debate, perhaps when we return from the recess, about a possible role for the Office for National Statistics, which could publish a report independently of the Government that would look back to the manifesto commitments that were made?
Mr. Cook: I am grateful to my hon. Friend for his remarkably loyal opening line. I have given several assurances that I shall write to fellow Ministers and I shall certainly write to the Whips to draw attention to my hon. Friend's opening sentence. Whatever we politicians might imagine, the outside world would regard it as strange if having had a general election only a few weeks ago we were suddenly to produce an annual report going back

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well before the election. The people have had the opportunity to reach a verdict on our performance in the previous Parliament, and I am happy to say that the result was a resounding success for the Government.
Sir Robert Smith: As the Leader of the House will know, my constituents will be concerned about the east coast main line, which does not, as is often thought, end at Edinburgh but carries on to Aberdeen. In his answer to the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), the right hon. Gentleman gave an assurance that the franchisee, GNER, would be able to purchase rolling stock despite the uncertainty. Does he recognise, however, that the type of rolling stock required may depend on the type of track improvements that are decided on? Given that uncertainty, will he ask the Secretary of State to see whether he has any powers under section 56 of the Railways Act 1993 to underwrite the purchase of that rolling stock, so as to remove the uncertainty and ensure that at least some of the improvements come to the line as soon as possible to benefit our constituents?
Mr. Cook: I am not sure that I would encourage the hon. Gentleman to hope for an underwriting of costs by the operating company, but he has highlighted a problem associated with giving a 20-year franchise at the present time. The actions of any operator, including GNER, depend on the state of the track, which is why a two-year extension has been granted.
I am well aware of the line to which the hon. Gentleman refers. It is one of the most attractive lines in the United Kingdom, and I hope that it will soon be among the best.
Paul Flynn: As a reforming and modernising Leader of the House, does not my right hon. Friend think that the debate on drugs to be held in October would be far more valuable if a motion were tabled on which the House could vote? The "World at One" radio programme has announced the result of its survey of opinion among hon. Members. It found that, of the hon. Members surveyed, four out of five want there to be a royal commission on drug use, because they think that the present drug laws perversely increase drug harm and are unenforceable.
Mr. Cook: I note what my hon. Friend says, although I would not wish to adopt the innovation of "World at One" surveys becoming the basis on which the House reaches a decision. At the present stage of the debate for which my right hon. Friend the Home Secretary has called, it is right that the House should have an open-ended debate in which hon. Members can express their opinions freely, without being polarised by a substantive motion and an amendment. That is appropriate for this stage of the debate, and I am sure that my hon. Friend will take part in the debate in October.
Dr. Julian Lewis: May we have a statement from the Foreign Secretary on the Government's attitude to the atrocious behaviour of the Russian army in Chechnya? That army is not merely in combat with guerrillas, but is perpetrating gross human rights abuses against the civilian population. If we cannot have a statement, may we at least have an indication of
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whether the Prime Minister will take the opportunity, when he meets President Putin, to raise these terrible issues?
Mr. Cook: There have been exchanges in the House on this matter on many occasions in the two years since the invasion of Chechnya. There have also been many exchanges on the matter between my right hon. Friend the Prime Minister and Foreign Office representatives and their opposite numbers in the Russian Government. I fully share the hon. Gentleman's concern about human rights abuses in Chechnya, and I have often impressed on the Russian Foreign Minister the importance of winning the hearts and minds of the public in the effort to isolate people from the guerrillas. We shall continue to urge that view on the Russian Government.
Mr. Bob Blizzard: My right hon. Friend may remember that, in April, the then Department of the Environment, Transport and the Regions announced that £5.5 million in assistance would be given to fishing communities, to be delivered through the regional development agencies. Will he confirm that the Department of Trade and Industry is now responsible for that initiative? Will he ask my right hon. Friend the Secretary of State for Trade and Industry to make a statement on the methodology used to divide that sum between the regions containing fishing communities?
Does my right hon. Friend agree that the apportionment should reflect the size of the fishing communities in each region? The bigger the fishing industry in an area, the more local economies have been dented, and the more assistance is needed. I have found no evidence of that thinking in the figures that I have seen regarding the apportionment of the money, so I should be grateful for any help that my right hon. Friend can give me.
Mr. Cook: I understand my hon. Friend to be correct in saying that the matter now comes within the scope of the Department of Trade and Industry. He makes an interesting point about the way in which the compensation scheme is distributed among communities that have been involved in fishing, and I shall be happy to draw his remarks to the attention of my right hon. Friend the Secretary of State for Trade and Industry.
Miss Anne McIntosh: Is the Leader of the House aware that yet another case of foot and mouth disease has been confirmed in Vale of York today? Will he take this opportunity to impress on the Secretary of State for Environment, Food and Rural Affairs that this is not the most appropriate time to revoke the blanket closure of footpaths in north Yorkshire? Will he also investigate the failure of that Department's officials to respect the biosecurity rules that the Department set out? The experience in Vale of York is that farmers have been ruthless in applying those rules, but that the Department's officials have been less so.
Mr. Cook: I am happy to confirm that, in making her announcement today, my right hon. Friend the Secretary of State confirmed that she agreed with north Yorkshire's proposals temporarily to retain closures in parts of the county. Therefore, the immediate threat that the hon. Lady apprehends does not exist and north Yorkshire can continue with blanket closures for the time being. As I

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said earlier, it is a source of disappointment to Members on both sides of the House that the tail of this outbreak is proving so stubborn and that it is taking so long to achieve our aim of complete eradication. That is why my right hon. Friend the Prime Minister has asked us to examine what further steps can be taken to achieve the goal of no further outbreaks of the disease.
Mr. John Smith: May I draw my right hon. Friend's attention to early-day motion 134?
[That this House congratulates Barry Town Football Club on their outstanding victory over FC Shamkir in the first leg of the Champions League; recognises the achievement of a two goal advantage for the second leg and only the second ever win in this competition for a League of Wales team; appreciates the contribution made by goalkeeper Tim Clarke in his debut match; and wishes the team all the best for the return match in Baku Azerbaijan, next week.]
It has been signed by Members on both sides of the House and me. Barry Town won the second leg of its champions league tie in Azerbaijan, against all the odds. It was a stunning victory. Although I appreciate that my right hon. Friend probably will not be able to find time for a full debate on this success, will he inform his right hon. Friends of this result, join me in congratulating these giant slayers and wish them all the best in the next round against Porto in Portugal?
Mr. Cook: I am happy to join my hon. Friend in congratulating his local team, and I assure him that I shall draw the attention of my right hon. Friend the Prime Minister to this signal success of British sporting endeavour abroad. I will have to make a particular point of attending the debate on the Football (Disorder) (Amendment) Bill when we return, which plainly will be very interesting.
Dr. Evan Harris: The Leader of the House has mentioned the importance of fighting the worldwide epidemic of HIV. He will be aware of the growing problem in this country, where new HIV cases last year totalled nearly 3,500—the highest-ever incidence of new HIV infection. The picture is similar with gonorrhoea, syphilis and chlamydia among young people.
In spring 1998, the Government promised an HIV strategy for the autumn. In spring 1999, they promised a sexual health strategy for the year 2000. In spring 2000, they promised an integrated strategy for spring 2001, and a draft strategy for autumn 2000: nothing has appeared. Nearly six months ago, the Government said that a strategy would be published shortly, and people were expecting it to be published today. It has not been published.
The Leader of the House is a man of the world. Perhaps he can tell his more coy and bashful colleagues that they must stop behaving like giggling schoolboys and be prepared to tackle the sexual health problems affecting this country. The strategy must be published so that young people in this country can be protected from further infection.
Mr. Cook: Coy and bashful are not words that I would associate with any hon. Member of this House. I shall
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meet the Minister with responsibility for public health in an hour's time and I shall draw the hon. Gentleman's remarks to her attention. This is a serious issue and there is no doubt that countries that have run vigorous public campaigns of information and warning have coped best with the epidemic.
On the forthcoming G8 meeting and the action being taken in Africa, we hope to confirm in Genoa that $1 billion will be available to combat the spread of AIDS and other diseases, such as tuberculosis, in the poorer parts of the world. It is important for those countries that we take that step, but it is also important for us, because until we tackle the worldwide epidemic there can be no insularity for ourselves.
Mr. Stephen McCabe: After references to Barry Town and Carlisle United, I am tempted to make a special plea for Greenock Morton, but perhaps not now.
On a serious note, does my right hon. Friend welcome the announcement from the Japanese Environment Minister, Yoriko Kawaguchi, that her Government will sign the Kyoto agreement? Does that mean that the outstanding obstacle is now the attitude of the American Administration? May we have an early debate on this and the other aspects of the so-called special relationship that many of us fear are looking increasingly bad for our health?
Mr. Cook: I appreciate my hon. Friend's comments on Morton. I should take this opportunity, perhaps in sheer self-defence, to congratulate Livingston football club on its promotion to the premier division—it is long overdue.
On Kyoto, my hon. Friend raises a serious issue that will be at the heart of the discussions between President Bush and the Prime Minister today. We have given a commitment that, with our European colleagues, we will try to ensure that the Kyoto protocol comes into existence. To achieve that, we need the support of other countries such as Japan, and we are working to get that support in Bonn at present. I hope that we will be successful when that conference reconvenes again in November in Marrakesh. On the wider question, I have never taken the view, either as Leader of the House or Foreign Secretary, that the House is short of opportunities to explore and discuss the special relationship.
Mr. Gwyn Prosser: Will my right hon. Friend find time for a debate on channel tunnel safety? Is he aware of reports that the French authorities continue to arrest as many as 250 would-be illegal immigrants at Coquelles every night, that dozens are still getting through and that they often end up in my constituency? Those desperate people are resorting to desperate measures. There have been many serious injuries and, sadly, four fatalities. Will my right hon. Friend find time for us to debate such matters and to review channel tunnel security?
Mr. Cook: I am very much aware of the problem to which my hon. Friend rightly draws attention. It is, of course, of national and not only local concern, important though it is in his constituency. We have had dialogue with the French authorities on the problem, particularly at Calais. I am pleased to say that we are enjoying good

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co-operation from the French police. Together, I hope that we will be able to secure our goal, which is to ensure that immigrants who come here illegally are halted as soon as possible at the far end of the tunnel.
Kevin Brennan: Will my right hon. Friend make time for a debate on cremation charges for very young children? Is he aware of the case of my constituents, Rose and Philip Jones, whose stillborn baby Lisa was disposed of in an incinerator? In the 1980s, the parents had been promised a proper cremation. As a result of that and many other cases, cremation is available for miscarried babies. According to press reports, however, charges may be introduced—for the first time in many cases—for the cremation of very young children. Does my right hon. Friend agree that we should have a debate on ensuring that parents are not punished at their time of greatest grief?
Mr. Cook: I understand entirely the enormous distress caused to a family when a child is lost through miscarriage, and I fully appreciate the great need for emotional sensitivity when handling such a case. My understanding is that in Wales, as elsewhere, the family have the option of having the hospital deal with the foetus or of arranging privately for a cremation. Cremation charges are a devolved matter for the Welsh Assembly, and I am sure that the Minister responsible there will have heard my hon. Friend's comments. I understand the need to approach the matter in a different and more tactful way than one would in other circumstances.

Bowman Contract
1.28 pm
Mr. Paul Keetch (Hereford)(by private notice): To ask the Secretary of State for Defence if he will make a statement on the awarding of the Bowman contract.
The Secretary of State for Defence (Mr. Geoffrey Hoon): With permission, Mr. Speaker, I would like to make a statement on the Bowman communications programme.
This project will provide the armed forces with a modern, highly capable tactical combat radio communications system to replace Clansman. It will provide secure, reliable communications to our land forces and selected elements of the Royal Navy and Royal Air Force. In addition to voice communications, the system provides a tactical internet and automatic position location, navigation and reporting. Delivery will include more than 48,000 radios, 30,000 computers, conversion of more than 30,000 existing platforms and training for more than 100,000 members of the armed forces.
Until recently, the history of the Bowman project has been a saga of difficulties. The requirement for the system was originally endorsed as long ago as 1988, but the initial attempt at competition collapsed in 1996. The following year, in March 1997, it was decided to pursue a single source procurement with Archer Communications Systems Ltd.
Last summer, in the light of continuing major problems with the programme, the Government decided that the competition for the Bowman combat radio would have to be relaunched. That decision has now been vindicated. Over the past year, we have made impressive progress on the project. There has been a vigorous competition, with three strong bids submitted by Thales, TRW and CDC, a subsidiary of General Dynamics already operating in the United Kingdom. Following careful analysis of the bids, I am pleased to announce today that CDC has been selected as the Department's preferred supplier of the Bowman system.
We evaluated a wide range of issues. Given the project's chequered past and the continuing operational need, the priority has been to deliver a successful and low-risk solution that will fill this capability gap at the earliest possible opportunity: CDC offers just that. Its solution is the clear winner of the competition. It provides the best value-for-money solution, fully meeting our military requirements. I am confident that it will meet our demanding timetable for getting the system into service. It is based on experience of developing a proven system, and includes best-of-class radios and a very efficient approach to rolling out and supporting the equipment.
The Ministry of Defence and CDC will now work together on the programme to bring Bowman into service. We aim to be in a position to let a contract in late summer this year, to achieve an in-service date of early 2004. The contract is valued at about £1.8 billion. It will cover the supply of the Bowman system and the first five years of support up to the year 2009. It will use the ITT VHF radio sub-system and the Cogent cryptographic system.
CDC's solution provides employment opportunities in the UK in a broad range of system areas, including design, development, manufacture and project management.

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Ninety per cent. of the work content of the CDC bid will be based in the UK—the highest proportion of any of the three bids. About 1,600 jobs will be secured across the UK, including 400 new high-technology and support posts at the company's headquarters, which CDC plans to establish in south Wales.
The company has also earmarked south Wales for a new Army communications technology research and development centre, to be staffed by about 65 leading scientists. Other regions will benefit as well. We expect subcontract work to secure more than 100 jobs in Scotland, more than 300 jobs in south-west England and about 75 jobs in the south-east, centred on Hastings. Major United Kingdom subcontractors include Alvis and Westland.
This is excellent news for British industry, and not just in terms of job opportunities. The high-quality jobs that it brings will allow for the continuation of this country's defence communications capability. In particular, there will be significant technology transfer to the UK. The Ministry of Defence will hold appropriate intellectual property rights, available for use by other companies working on linked projects. Industry has committed itself to maintain a development and production facility as a UK concern. All this will mean that we will maintain a strong UK strategic capability.
This month will also see the first deliveries, ahead of schedule, of the personal role radios. This is a new capability, separated from the main Bowman requirement in 1999 to ensure early delivery to the front line. The radios will provide short-range communications for dismounted infantry, and will transform the way in which they are able to operate.
The progress that we have made, and this announcement today, draw a clear line under the problems of the past. They confirm that the Bowman programme is on track for success and show that our commitment to smart acquisition—to best practice—is delivering tangible results for the armed forces. Selection of the preferred supplier, just one year after we re-opened the competition, underlines our determination to deliver this battle-winning capability to our service men and women. Our armed forces can now look forward to receiving the most modern and integrated secure communications system available anywhere in the world.
I recognise that today's announcement will be a disappointment to the other two bidders. Thales and TRW have invested considerable time and effort in their respective solutions. Both submitted proposals that were substantially better than the one that we rejected last year. Their involvement has ensured a hard-fought and successful competition. As a result, their reputations as credible prime contractors will have been enhanced. I want to stress how much we have valued the significant Thales presence in the UK defence sector.
For this project, however, CDC offers the best solution to meet our military requirements to the right time scale. As I have outlined, it does so with an excellent package of work in the UK. I am confident that we have made the right decision both for the armed forces and for UK industry. I commend it to the House.
Mr. Keetch: The Liberal Democrats welcome the procurement of Bowman for the armed forces, coming as
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it does after nine years. I thank the Secretary of the State for coming to the House. Although he said that he wanted to do so, it is a matter of fact that he wanted to make his answer in response to a written question and not as a statement.
Is it true that a hastily convened press conference at the Ministry of Defence this morning had to be abandoned, and that press releases had to be taken back after news of your decision, Mr. Speaker, to grant my private notice question?
Will the Secretary of State tell the House why CDC clearly knew well in advance that it had won this contract? When I checked the company's website at 10 o'clock this morning, it was advertising jobs in Calgary, in Canada, to manage the prime contractor job—the posting had been placed on the website on 12 July. Does the right hon. Gentleman believe that such a complex project can be managed from Calgary?
Has CDC guaranteed that the Bowman contract will be delivered on time and to specification? What is the Government's assessment of job losses and job gains, not in Canada but in the United Kingdom? We certainly welcome the job gains, for example at Westland in Yeovil, but we want to know more about the quality of the jobs that will be created.
Is it true that there was an intervention by Lord Levene, who offered a factory in south Wales to employ former steel workers? Are those jobs being created at the expense of other high-quality jobs that will be lost throughout the United Kingdom? Are the rumours true that some kind of deal is being offered on the carrier projects as a sop to Thales?
Finally, if this means the end of secure military communications capability for the United Kingdom, what export orders can CDC of Canada look forward to as a result of today's announcement by the British Government?
Mr. Hoon: As usual, it is difficult to tell whether the Liberal Democrats are for or against any proposal. They have taken the full opportunity to criticise our proposals without indicating whether they are genuinely concerned about the quality and the quantity of the jobs that will be created.
I have dealt with all the hon. Gentleman's points about the quality and the quantity of jobs. In my statement, I pointed out that, of the three companies that made excellent offers to the Ministry of Defence, CDC proposed the largest proportion of jobs in the UK. I emphasise that the overriding need was to provide both value for money and the most secure system available in the right time scale for our armed forces. More than anything, that was why we chose the CDC offer, which built on the company's experience of supplying similar equipment that could be developed to the Canadian armed forces.
I can certainly assure the hon. Gentleman that CDC was not informed on 12 July, and that the matter has been pursued with all the appropriate means at our disposal so as to ensure full consultation.
Ms Claire Ward (Watford): Of course we welcome the decision for our own defence forces, but may I express disappointment on behalf of those of my constituents who are employed by Thales and will inevitably be concerned

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about the future of their jobs? Such concerns for constituents are shared by other Members. What feedback will the unsuccessful bidders be given to ensure that they are able to look to the future for more British contracts?
Mr. Hoon: I am grateful to my hon. Friend. Obviously, there are losers when such important contracts are awarded. I made clear in my statement the importance that we attach to the contribution that Thales has made in the UK since its foundation. The company already has defence work worth about £2.7 billion. That is not to say that it is not eminently capable of winning far more work in future. The company is excellent and we very much value its presence in the UK—a point that I shall make directly to the company.
Mr. Quentin Davies (Grantham and Stamford): It is all too characteristic of the Government that they make a statement after the news has been all over the press: in the Financial Times this morning, on the "Today" programme and, as the hon. Member for Hereford (Mr. Keetch) pointed out, on the internet. Once again, Parliament has been treated—on the last day before the recess—with characteristic levity by the Government.
It is also characteristic, and typical of new Labour spin, that the Secretary of State should set out the positive job news without mentioning the negative job news. Is it not a fact that Thales will have to lay off several hundred people in its former Racal subsidiary?
The Conservative party unreservedly welcomes the fact that a decision has now been taken on this important matter. Never again must the British Army go into battle, as it did in Kosovo, with such an unreliable communications system: soldiers were forced to use their personal mobile telephones, which were insecure. That was utterly disgraceful. There is no doubt that the Government have a mixed record on this matter, having spent three years being taken for a terrible ride by the Archer consortium. If they thought that they could do better than us, and our record on this matter is far from exemplary, they might have done so without waiting three years.
One or two things were clearly missing from the statement. I did not hear any mention of an in-service date. Will the Secretary of State tell the House, precisely and unambiguously, the in-service date for the system? In what respects have the specifications, which CDC will be working to, been altered from those to which the Archer consortium was asked to work? In other words, to what extent have the specifications been set back in the past year?
How much public money will the Government have to write off because of the Archer fiasco? [Interruption.] Yes, it was a fiasco, and it was entirely a fiasco of this Government. Labour Members are misinformed: the Archer fiasco lasted from 1997 to 2000. The National Audit Office says that between £35 million and £102 million of public money will have to be written off. Will the Secretary of State tell us the correct figure?
Will the Secretary of State give us an unambiguous assurance that the full source codes will be made available to this country, and that in future we will have total control of this important software?
Mr. Hoon: I have heard some astonishing performances by the hon. Gentleman recently, but today he probably wants to outdo himself before he goes off for a well-earned rest for the summer.
On the responsibility of the previous Government, I can only remind the hon. Gentleman of the dates that I set out to the House. The requirement for the system was originally endorsed as long ago as 1988, and the House does not need reminding which Government were in power at that time. It also does not need reminding about the collapse of the competition in 1996 and the decision in March 1997—we all know when the general election was held that year—to pursue a single source procurement with Archer Communications Systems Ltd. All those are matters of fact, and I find it astonishing that the hon. Gentleman should choose to comment on them when he lives in a very large greenhouse—[Interruption.]
Mr. Speaker: Order. The hon. Member for Grantham and Stamford (Mr. Davies) has asked several questions of the Minister, and he must allow him to reply.
Mr. Hoon: Perhaps I have dwelt on the hon. Gentleman's discomfort for long enough, save to say that this Government tried hard to make the single source procurement system work. I recognise that we failed to do so. That may have had something to do with the way in which the contract was originally placed, but I will pass over that. We took a difficult decision to abandon that programme, and we have now been rewarded by the fact that we have had a vigorous competition involving three very successful companies.
The in-service date should be early 2004. Specifications have been adjusted in certain areas, but not with any great significance. I will write to the hon. Gentleman with precise details if he requires them. There will be some write-off. The final figure has still to be determined, but we judge that the great majority of the write-off will benefit the existing procurement because the work that has been done will not be wasted. We will not waste significant sums as a result of abandoning the previous process. If the hon. Gentleman requires assistance with other matters, I will pass him the relevant information.
Mr. Robert Walter: The Secretary of State will be aware that the headquarters of the Signals and the Royal School of Signals are located at Blandford in my constituency. He mentioned the creation of 1,600 jobs. There has been considerable speculation in the Blandford area about the three bidders and how many jobs will be based there. Can the right hon. Gentleman give us an idea of the establishment which the winning contractor will locate at Blandford for implementation, training and support purposes?
Mr. Hoon: As I have already said, and as I must make clear, some 1,600 jobs will be secured. I mentioned the range of detailed technical equipment that will be required, from radios and computers to equipment that will be fitted inside helicopters. Although there are early indications across the country of the numbers of jobs that are likely to be created in each place where the subcontractors are currently located, it would not be sensible to give out precise details of the proposals because of the nature of the contract. It has only just been placed and still needs to be signed up to, which we hope

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will happen later this summer. It would not be right to create expectations unless we are absolutely confident about where the jobs will be located. However, I shall ensure that the details are sent to the hon. Gentleman as soon as I have them.
Fiona Mactaggart (Slough): The Secretary of State has placed on the record his appreciation of the significant contribution that Thales makes to the United Kingdom defence industry. Has the company told him about the impact that the decision will have on its 14,500 employees in the UK?
Mr. Hoon: I have had discussions with Thales about the contract's implications, and it is right that those remain confidential for the moment. It is obviously for the company to determine how it organises itself in light of the decision.
Each of the three companies would have established new facilities rather than continuing at existing facilities had they been successful, and the percentage of work in relation to each company's bid would have been roughly the same in the UK.
The developments in communications for the armed forces are important. In those circumstances, had the decision been in favour of Thales, I doubt whether the precise number of jobs created would have differed significantly. if there are job losses as a result of the decision, it will not be the direct consequence of Thales failing to win the contract; rather, it will be the result of its reorganisation of its business across the UK.
Tony Worthington: I want to congratulate those parts of the UK which have benefited from the contract, but the decision will be a major disappointment to my constituents who work for Thales in the Govan area at a company previously called Barr and Stroud, which was tremendously well known. However, when making such announcements, the Secretary of State should talk not just of job gain, but about the overall situation. Thales certainly thinks that 400 jobs will be going as a consequence of the decision. It is also worried that its ability to tender for very important contracts on aircraft carriers will be damaged by the award of this contract to CDC. Will he comment on that?
Mr. Hoon: As I said to my hon. Friend the Member for Slough (Fiona Mactaggart), it is for Thales to determine how best it organises its work force across the country in light of the decision. I well understand the disappointment to which my hon. Friend refers. Had the contract gone to Thales, it would have been able to create a significant number of new jobs across the UK, but the percentage would have been slightly less than the percentage work-share that CDC has proposed. That is not, however, the basis of the decision. There is absolutely no reason why Thales should not continue with the excellent programme on which it has been working for the design of future aircraft carriers. Indeed, as I said in my opening statement, we very much value Thales's presence in the United Kingdom. It is has a substantial
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amount of defence work already, and we look forward to its winning more defence work and creating still more jobs in the United Kingdom in future.
Mr. Ian Taylor: The key to the announcement is that, at last, our armed forces may get a secure communications system, and I agree with my hon. Friend the Member for Grantham and Stamford (Mr. Davies) that that is absolutely crucial in battlefield conditions. Let us hope that the Secretary of State has chosen the right winner of the competition and that the contract succeeds this time. He will know from shadowing me when I was the Minister for Science and Technology that the technology is vital, and it is essential that it is kept within his power, as Secretary of State for Defence. Will he tell us a little more about his reference to intellectual property and about the research centre, because the United Kingdom will suffer if British industry is denied full access to the technological developments in the Bowman contract?
Mr. Hoon: The position on technology is as I set out, and it would not be appropriate for me to go into the detail of the technology that will be available to the Ministry of Defence, which can then be passed on to other companies. Clearly, whichever company had been successful, there would have had to be precisely the same kinds of intellectual property arrangements between the company involved and the MOD on behalf of the Government. We are entirely satisfied that the arrangements in the CDC bid will allow this country the opportunity to exploit and develop the work that we have required for Bowman, both overseas, where appropriate, and in further enhancing the system.
That is why we welcome the creation of a research centre, which is likely to be located in south Wales. It will allow us to do further work in training and development towards the full digitisation of the system in the future. That is an important development; it will further enhance the communications equipment available to our armed forces, and that is why we judge overall that CDC provides the appropriate value for money solution, as well as a platform that can be effectively developed in future. I anticipate that that will involve a wide range of suppliers of such equipment.
Mr. Wayne David: I thank my right hon. Friend for today's enormously positive statement, which is good news for the United Kingdom and, of course, the armed forces. It is particularly good news for the Caerphilly county borough in south Wales—an area with objective 1 status because of its very low gross domestic product, which has suffered a large number of job losses in recent months. The 400 new jobs that will come to the borough will be high-quality and well paid—precisely the kind of jobs that we need. Can my right hon. Friend say how the contract might help the greater south Wales economy?
Mr. Hoon: I am grateful to my hon. Friend for his observations. Certainly, the announcement will be good news for south Wales. I have already mentioned CDC, which will develop a number of jobs in south Wales. Cogent Cryptographics at Newport will also be an important supplier of cryptographic equipment under the contract. Several other companies are likely to benefit—

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this is only the first tier of the contract. We anticipate that there may be a further 300 jobs in second-tier contracts, which have yet to be identified. As I said, it is not entirely appropriate to give the precise details, but I can give my hon. Friend details relevant to his constituency, and I will do so for other hon. Members' constituencies.
Mr. David Laws: I greatly welcome today's announcement, which is not only long overdue, as the Secretary of State said, but will be extremely important in my constituency, not least at Westland Helicopters. Can the Secretary of State confirm that about 120 jobs at Westland will be secured over the next five years and that such work will provide the foundation for future orders? Will he make a commitment to continue to work alongside Westland to help to secure future orders, not just in the domestic market, but in the export markets?
Mr. Hoon: I am grateful to the hon. Gentleman for his observations. As I said in my statement, Westland will be an important subcontractor and its work on converting helicopters to incorporate the Bowman system will secure at least the number of jobs that he mentioned.
Jane Griffiths: Although it is obviously welcome that the contract has been awarded and that the future of armed forces communications looks in better shape, what can I say to my constituents who are employed by Thales, some of whom will lose their jobs immediately according to the company, which expects 400 jobs to go straight away, initially at Harrow and Bracknell—both places where my constituents are employed? It is clear that south Wales has greater need of new jobs than the Thames valley, but none the less my constituents are real people with real homes and real families. What can I say to them?
Mr. Hoon: I entirely understand the disappointment felt by those who work for Thales. I had the opportunity in recent weeks of visiting a Thales facility that provides some of the most advanced optical equipment available anywhere in the world for the United Kingdom. Thales is a very high-quality, successful company, employing highly skilled people. Although I cannot in any way substitute 1the decision that we have made—on the grounds of best value for money and the most effective in-service date for the armed forces—I understand the concerns that my hon. Friend has raised. All I can say to her—perhaps this message can be passed on to her constituents—is that a large number of jobs will be created across the country as contractors and subcontractors secure work under the overall Bowman programme. I anticipate that some of that work may well go to her part of the world.
Dr. Julian Lewis: The hon. Members for Reading, East (Jane Griffiths) and for Slough (Fiona Mactaggart) have emphasised the fact that Thales already employs 14,500 people in many constituencies all over the United Kingdom. The Secretary of State understandably stresses the new jobs to be created, but what about those to be lost, such as at the former Racal factory, now Thales, in my constituency? How many people does CDC currently employ in the United Kingdom?
Mr. Hoon: In a sense, I have dealt with that point. All three companies, had they been successful, would have
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been developing solutions that would have required an increase of up to 90 per cent. in the UK work force. I would not want the hon. Gentleman to leave the House with the impression that somehow the 14,500 people employed by Thales in the UK are all engaged in such communications work. That is far from the case. Indeed, Thales would have created a significant number of jobs had it been successful. As I said in reply to my hon. Friend the Member for Reading, East (Jane Griffiths), Thales is a diverse company. It makes available a range of high technology in defence work to the UK and other countries. I see absolutely no reason why that successful high-technology work will not continue.
Mr. John Lyons: Are the unsuccessful companies excluded from bidding for subcontract work under the Bowman programme?
Mr. Hoon: No. Indeed, I anticipate that, as the effect of the contract spreads across the country, there will be a great number of contracts and subcontracts for which Thales and other unsuccessful companies may bid successfully.
Mr. Mike Hancock: I would be grateful if the Secretary of State informed the House whether there have been any job losses in the senior management of the MOD over the bungled and incompetent handling of the contract—or, as normal, have they been rewarded with promotions and decorations? Will he substantiate his response to the hon. Member for Grantham and Stamford (Mr. Davies) that there would be only minor downgrading of the specification? In evidence to the Select Committee on Defence last year, those from his Department said that the original spec would be downgraded significantly to the one now on order. Could he also give a figure for the compensation that will have to be paid? He alluded earlier to the existing contractors involved in the contract. How much money has the Ministry spent to date on the project?
Mr. Hoon: Let me make it clear that, as I said when I talked about specification changes, there were adjustments. There are constant adjustments in the specification of complex pieces of equipment; I gave the House an idea of the nature of that equipment in my statement. Adjustments in a contract that takes this length of time are inevitable and are part of the process.
As for compensation, in a sense the hon. Gentleman is asking the same questions that were asked earlier. The amount that is likely to be written off has yet to be determined precisely, but I am confident that a great majority of the work done under the previous contract will be relevant to the work that has been awarded to CDC, so the money that has been spent will not be wasted.
Mr. Michael Jabez Foster: May I congratulate my right hon. Friend on the wisdom of his decision, not least because it is a true British decision and a true British solution which employs the greatest number of British workers? In particular, it provides some 75 jobs in my constituency of Hastings and Rye. Following the rather sad news last week about the bypass, it is good news that jobs are to be created in an area where there is

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a weak economy. Is the announcement likely to result in export opportunities and therefore on-going jobs after the period of the contract has ended?
Mr. Hoon: My hon. Friend tempts me, but it is fair to say that none of the three bids were entirely British. It is in the nature of modern high technology for defence purposes that that is increasingly unlikely. Much as I would like to agree with my hon. Friend, it is important to tell the House that these are multinational bids by companies based in several different locations.
As for the potential for export, the prospects for the future are very good. Such equipment will put Britain's armed forces at the head of countries that invest in secure battlefield communications. I am confident that the research and development investment that is likely to be located in south Wales will mean that our lead can be extended. Clearly, that experience will mean that other countries will look to our expertise and the manufacturing capability established in the United Kingdom with a view to securing export orders. I am confident that the decision gives us an appropriate platform for export.
Mr. John Wilkinson: In his letter to me dated 19 July 2001, Lord Bach, the Minister for Defence Procurement said:
"Thales Acoustics in Harrow remain a potential sub-contractor to CDC."
Is that a sop to my many constituents who work at Thales, or has CDC given positive indication to that effect to the Ministry? Why cannot the Minister give positive, clear news about the actual costs involved? He quoted a figure of £1.8 billion as the overall cost of acquisition, training and support. Could that not he broken down between the bid from Thales and CDC's winning bid? Is it not time for open government in defence procurement?
Mr. Hoon: Clearly there is some extremely sensitive commercial information, but none of the companies would welcome costs being published, as the hon. Gentleman suggests, as the result of such competition. That has never been the practice and I do not anticipate changing that today. As I told the House, this is a prime contract; it is an overall contract for securing a particular service to the armed forces. I indicated that the contract was for 48,000 radios, 30,000 computers, a conversion of some 30,000 platforms and, most importantly, training for more than 100,000 members of the armed forces. As a result of the placing of the prime contract, there will be a cascade of further contracts across the country and we are confident that those companies that did not successfully secure the winning order will nevertheless benefit from that cascade.
Paul Flynn: Does my right hon. Friend recall that during the Bosnian conflict our systems were so insecure that using the Welsh language was the only method of ensuring that no one could interfere? Although today's news will be disappointing to those who teach Welsh in the Balkan states, it is welcome for my constituency. It means 80 new jobs at Cogent Cryptographics in Newport. It is a small consolation in view of the thousands of jobs that have been lost a few miles away from the plant, but it emphasises that Cogent
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provides a world-class service and that south Wales is a natural home for high tech. The plant is cheek by jowl with that temple of intellectual property in Britain, the Patent Office in my constituency.
Mr. Hoon: I am grateful for my hon. Friend's later comments. Initially, I wondered whether he was suggesting that the Ministry of Defence might save money by compulsory training in Welsh for the armed forces. I agree with his further comments because we are pleased with the work that is conducted in his constituency. It adds to the security of the system and I am delighted that the announcement means jobs for his constituency.
John Thurso: The Secretary of State knows the significance of the AEA Technology Batteries factory in Thurso. It is well placed to provide the batteries through its links with ITT. Is nominating ITT as supplier good news for Thurso? He mentioned an estimated 100 jobs for Scotland. Do they include jobs in battery provision in Thurso?
Mr. Hoon: Earlier, I referred to a cascade of contracts. I understand that the company to which the hon. Gentleman refers is well placed to take advantage of the decision that we announced and that it has some exciting technology, which could make a significant contribution. However, the Government will not examine every contract that results from the main decision. I therefore cannot answer his question specifically, but I am confident that the factory is in a good position to take advantage of today's announcement.
Mr. Dai Havard: I declare an interest because, as a trade union official, I have been involved in discussions with all three bidders about their future activities as corporate citizens. I welcome today's announcement.
I share Caerphilly borough council with my hon. Friend the Under-Secretary of State for Wales, and my hon. Friend the Member for Caerphilly (Mr. David). We have been involved in discussions about not only manufacturing work but quality research and development. Perhaps my right hon. Friend can confirm that approximately £25 million could be invested in research and development projects in that area with the local universities. The area is in great need of such activity.
My right hon. Friend should take note that no nationalist Members have bothered to be present for today's announcement although Caerphilly council is a nationalist authority.
Mr. Speaker: Order. It is not for the Secretary of State to note such matters.
Mr. Hoon: I am grateful that I do not have to comment on the absence of hon. Members. Nevertheless, I confirm that there will be substantial investment in south Wales. As I said in my opening statement, we attach great importance to providing training and research to take the equipment to a new level of digitisation and security.
Syd Rapson: Is the equipment compatible with the equipment that we shall use

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in Europe? We know that it is compatible with Canada and north America, but is it interoperable with that of European forces?
Mr. Hoon: Compatibility is a tricky word in this context. We do not want the equipment to be easily understandable because the purpose of secure equipment is to be secure. My hon. Friend is right to emphasise the need for interoperability, which may be a better word than compatibility.
Mr. David Drew (Stroud): I very much welcome the news today: anyone who has any connection with the armed forces will want to see the beginning of the end of this particular project. Does my right hon. Friend agree that there is a particular need in the United Kingdom to bolster the role of small subcontractors, and will he do everything that he can as part of the further negotiations that will undoubtedly ensue to ensure that small subcontractors have a fair wind and are not discriminated against?
Mr. Hoon: I wholeheartedly agree with my hon. Friend on the importance of seeing the end of this particular saga, and I do not think that the Government can claim that the overall process has been particularly successful. In those circumstances, I am grateful to my hon. Friend for his comments. I also agree with him entirely that it is important that, as the contracts that will be placed following the decision develop, smaller subcontractors have that opportunity. We have estimated that at least another 300 new jobs could be created as a result of those second-tier contracts, which are likely to be with smaller companies, adding to the total that I have already indicated.

Speaker's Statement
2.11 pm
Mr. Speaker: Last, week, the hon. Member for Surrey Heath (Mr. Hawkins) raised with me the view which the Electoral Commission has taken on the parking passes that hon. Members have received from the British Airports Authority and the need to declare them as a donation made for political purposes.
I must inform the House that no question of a contempt has arisen. However, as I promised, I have looked into the matter, and I am pursuing it vigorously. I hope that matters will be satisfactorily resolved very soon.

Speaker's Statement

  ROYAL ASSENT
  Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Act:
  Appropriation (No. 2) Act 2001

  BILL PRESENTED
    FOOTBALL (DISORDER) (AMENDMENT)
    Mr. Secretary Blunkett, supported by the Prime Minister, Mr. Secretary Prescott, Mr. Chancellor of the Exchequer, Mr. Secretary Straw and Mr. John Denham, presented a Bill to amend section 5 of the Football (Disorder) Act 2000; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed. Explanatory notes to be printed. [Bill 26].

European Communities (Finance) Bill (Programme) (No. 2)
2.12 pm
The Economic Secretary to the Treasury (Ruth Kelly): I beg to move,
That, in accordance with the resolution of the Programming Committee of 18th July and pursuant to the Programme Order of 3rd July 2001 (proceedings in Committee of the whole House, on consideration and on Third Reading of the European Communities (Finance) Bill)—
(1) proceedings in Committee of the whole House shall, so far as not previously concluded, he brought to a conclusion at 8.30 p.m. on the first allotted day (or, if that day is a Thursday, 5.30 p.m.);
(2) any proceedings on consideration and proceedings on Third Reading shall be taken on the second allotted day and, so far as not previously concluded, shall he brought to a conclusion at 10.00 p.m. on the day (or, if that day is a Thursday 7.00 p.m.).
I am pleased to move this motion, which provides for the conclusion of consideration in Committee by 5.30 today, and a further full day for remaining stages. We had a lively and good-natured debated on Second Reading, and it is important that all the issues of concern to hon. Members be properly scrutinised now. The motion allows the House adequate time to discuss this very short but important Bill, and I commend it to the House.
2.13 pm
Mr. James Clappison (Hertsmere): The Economic Secretary to the Treasury did not take long to speak to the programme motion, but I have one or two points to make about it. I should also state at the outset that I am by no means an admirer of the new arrangements that have been made, under the guise of so-called modernisation, to timetable legislation. The more I see of the operation of those arrangements, the more unsatisfactory they seem to be.
The usual reason why the arrangements are unsatisfactory is that, as we all well know, they constrain the House in its consideration of legislation. Bills are now passed by the House when large parts of them have received inadequate consideration, or in some cases no consideration at all. The arrangements therefore fundamentally negate the purpose of the House. However, we will not necessarily encounter those problems when considering the European Communities (Finance) Bill. The problem with this programme motion is that, in addition to the problems that I have just mentioned, it does not allow sufficient flexibility in considering the Bill in Committee and on Third Reading.
This Bill is important in its own way, and hon. Members on both sides of the House may wish to debate the important issues that it raises. The Economic Secretary was right to say that the Bill raised issues for debate. She was also right to say that we had a good debate on Second Reading, when Opposition Members properly raised some important issues. If hon. Members on either side of the House wished to address those issues in detail, the arrangements that have been made would be all well and good.
As we know, however, thus far no amendments to the Bill have been tabled. Our debates on the Bill today may be simply on whether its clauses should stand part. Perhaps those debates will occupy all the time that the Economic Secretary has said is available, but we shall
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have to wait and see. Perhaps that will not be the case. Perhaps there would have been sufficient time today to consider the Bill even on Third Reading. We simply do not know what will happen in the time available today.
The Opposition do not know why the programme motion was drafted so as to exclude the possibility of considering the Bill on Third Reading today. The motion provides that, regardless of whether we use all the time allocated for consideration in Committee, Third Reading is bound to occupy a second allotted day, in the autumn when the House returns from the summer recess. Those arrangements do not seem to be the most flexible possible, or even necessarily to work in the interests of the House, either in considering the Bill or in best using valuable parliamentary time.
Interestingly, as originally drafted, the motion provided for consideration on Third Reading today, the first allotted day. Additionally, when the motion was originally drafted, it was not known whether amendments would be tabled for debate in Committee. Yesterday, however, after it had become apparent that no amendments had been tabled, the motion was changed to exclude the possibility of Third Reading today. That is a strange arrangement.
Undoubtedly issues will arise in our consideration of this short Bill today, and they will have to be addressed. I am all for detailed scrutiny, and my usual criticism of programme motions is that they prevent such scrutiny. However, I do not know why we should be governed by programme motions that are so inflexible that they exclude the possibility of a debate on Third Reading even if such a debate would allow the best use of parliamentary time. I do not think that anything is to be gained by being so inflexible.
I must therefore conclude that this programme motion has exposed yet another unsatisfactory feature of the timetabling arrangements that the Government have introduced for the consideration of Bills. So often those arrangements not only prevent us from considering Bills properly and in the depth we should like, but are so inflexible that they could result, as they may today, in parliamentary time not being used in the best possible manner. We have discovered one more unsatisfactory feature of the arrangements, on top of all the others. It just goes to show that the arrangements have not been well thought through, and work against proper parliamentary scrutiny and proper parliamentary democracy.
2.19 pm
Mr. Edward Davey: I support the thrust of the argument of the hon. Member for Hertsmere (Mr. Clappison). When the Programming Committee met yesterday, we had an interesting situation, because the representatives of both the main Opposition parties were arguing against the Government, saying that the Government were probably allowing too much time for debate. There may be one or two Back Benchers, such as the right hon. Member for Bromley and Chislehurst (Mr. Forth), who would object to such a statement—
Mr. Eric Forth: Yes.
Mr. Davey: Indeed, given his seemingly very passionate speech on Second Reading, I should have thought that the right hon. Member for Wokingham

463
(Mr. Redwood) would object to it, too. However, having examined the Bill and listened to the debate on Second Reading, the hon. Member for Mid-Worcestershire (Mr. Luff)—the Conservative Whip—and I felt that the time being allowed today was sufficient for proceedings both in Committee and on Third Reading.
The fact that there are no amendments would suggest that that interpretation was correct. So the important issue of parliamentary time being well used arises. In the Programming Committee, when we asked why so much time had been allowed to debate the Bill, we received no answer. We found it rather odd that the request from Opposition parties to reduce the time allocated to the Bill was not met with agreement. Given that the Minister has had more than 24 hours to muse on that, I hope that she will explain why it has been given so much time. Given the current problems in the Conservative party—
Mr. Forth: What problems?
Mr. Davey: The fact that its next leader might be a pro-European, although his Back Benchers are anti-European—
Mr. Forth: That is indeed a problem.
Mr. Davey: It is not often that the right hon. Gentleman and I are in agreement, but on this occasion it appears that we are.
Perhaps the Government want to start as they mean to continue if the right hon. and learned Member for Rushcliffe (Mr. Clarke) becomes the leader of the Conservative party, and promote as many debates and votes as possible on European issues in order to give the splits in the Conservative party a public airing—but I may be ascribing too many machiavellian tendencies to the Government.
I do not want to insult the Minister or the Whip, but I believe that parliamentary time is precious. As we are given only three days in the parliamentary year to debate the estimates, and are told that we are not allowed to debate our country's expenditure at greater length, it is bizarre that we have been given an extra day to debate a relatively small sum of money, when the Opposition parties have requested that the debate be allocated less time.
I hope that the Minister will either give us a good reason why we should vote for the motion, or say that she is prepared to allow a Third Reading debate today.
2.22 pm
Mr. Eric Forth: All that raises the question of whether we need a programme motion in respect of this Bill at all, as it is becoming increasingly obvious that my hon. Friends on the Front Bench are in an indecent hurry to get the Bill through, and the hon. Member for Kingston and Surbiton (Mr. Davey) seems to think that the Government did not know what they were doing, which is quite an indictment, coming from a friend of the Government. The fact that yesterday in Committee the Minister was unable to give an answer was no surprise to me, and it should have been no surprise to the hon. Gentleman—but perhaps our patience will be rewarded now, and the Minister will grace us with an explanation beyond what she has said so far.
464
The truth is depressingly familiar. These programme motions are turning out to be an embarrassment and an affront to the House. In this case, in the very few words that the Minister was prepared to utter in some sort of defence of the motion, she said that in her view it would allow adequate time for debate. That exemplifies the attitude that is now being repeated over and over again in relation to programme motions: Ministers are to judge how much time should be available for the House to conduct its proceedings. It is now quite blatantly becoming a matter of routine. The Minister said, "I think that I know how much time will be required for the debate." In most cases we tend to argue that almost certainly the time will be inadequate, but on this occasion—perhaps we should note the day and the date—my hon. Friend the Member for Hertsmere (Mr. Clappison) and the hon. Member for Kingston and Surbiton seem to be saying that far too much time is being offered.
Mr. Clappison: The question that the Government need to address is: why should we exclude the possibility of a Third Reading today if consideration in Committee finishes unexpectedly early? Important issues that have to be discussed may occupy all the available time, and that would be well and good—but what is to be gained by excluding the possibility of a Third Reading debate today if consideration in Committee does not occupy all the allotted time?
Mr. Forth: As a pale and inadequate substitute for the Minister, let me try to answer my hon. Friend and offer a possible explanation. The Government presumably want us to get on to the Northern Ireland business, and then perhaps deal with further business. Had they taken the approach that my hon. Friend has helpfully and inventively suggested, it might have put at risk an adequate Third Reading debate—or, if the Government had not put an end to the whole proceedings, we might even, heaven forbid, have had to sit after 7 o'clock this evening. That is perhaps a clue to the Government's thinking. They are so afraid of keeping the House—and for "the House" I can probably substitute "the babes", as it is usually they who are behind these things—and asking the delicate flowers on the Labour Benches to stay after 7 o'clock on a Thursday, that the whole business has to be structured in order to avoid that horrendous prospect.
I suspect that the Government work back from the convenience of certain Members who do not want to tarry here too long, and then fit the business in accordingly. So this has nothing to do with the nature of the business, the extent of interest in the House or anything of that kind, but everything to do with fitting the business of the House in for the convenience of Members who obviously do not want to spend much time here. That is probably the explanation—but no doubt we will get a much fuller explanation from the Minister when she replies to the debate.
Yet again, Ministers have taken it upon themselves to make a judgment about how much time the House will require, and that is the end of the matter. The House then has to fit in with the Minister's judgment and the convenience of Ministers, regardless of how much we may want to say or how much scrutiny we may want to give a measure.

465
My next point is well illustrated by what has happened today. Even Ministers do not necessarily know what business may come up. Normally we would expect to get to the main business on a Thursday at roughly 1.15 pm. We have departmental questions from 11.30 to 12.30. We then have business questions, which Mr. Speaker, with his normal generosity and open-handedness, normally allows to run its natural distance, which is normally until about 1.15 pm. Today, however, we had a very important statement in which many hon. Members were rightly interested, so we did not get to this business until about 2.15.
In other words, there was an hour less than would normally be available. That is not in any way allowed for in the approach that the Government are now taking with this heavy-handed, automatic, rigid, inflexible programming that we are now required to have laid upon us, which takes no account of what may happen in the House in the way of statements, private notice questions or whatever. Today provided a good example of that. That is another argument against programming, and against the Government's approach.
There is also the rather odd phenomenon that my hon. Friend the Member for Hertsmere touched on. The Government have stated their intention that, slightly unusually, the Third Reading of this measure will be detached by a period of about three months from the Committee stage. That would suggest that there can be no urgency or importance whatever about the Bill—personally, I welcome that—and that any number of events could intrude between now and then which could affect the attitude of the House to the Third Reading debate.
It is one thing if we can anticipate having a Third Reading debate fairly quickly after the Committee stage, but it is quite another if there is to be an intervening period of three months. Anything could happen—who knows? The United Kingdom could leave the European Union—although for some of us that is but a dream. Any number of things could happen between now and then that could have a material effect on the Bill. So the confidence of the Government in asking us today to approve a measure that will determine the length of the Third Reading debate three months hence is even more bizarre than would usually be the case. I could just about understand the Government arguing that if we were to have Third Reading next week, they could reasonably anticipate how much time we were likely to need, but this is entirely different.
The Minister has some explaining to do to persuade us that the motion is appropriate in the circumstances. Self-evidently, the Bill is not urgent and the time needed for the rest of our business today cannot be foreseen. I am delighted to see that the business motion, item 5 on the Order Paper, has the magic words "Until any hour" attached to it. That must mean that it is a matter of some importance that will require very lengthy consideration. We should be grovellingly grateful to the Government for their generosity in allowing such a debate.
What follows may be relevant to the approach that we may take to this motion and whether we feel it appropriate for our business to be truncated as the Government are suggesting.
466
This is an unusual programme motion. My hon. Friend the Member for Hertsmere and the Liberals are taking the odd approach that they want to hurry on, take Third Reading and get the whole matter dispatched rather quickly. I, who favour a more leisurely approach, am positively stunned and delighted by the fact that we are to have a three-month period of reflection between Committee stage and Third Reading. However, the product of that protracted reflection might have some relevance to the amount of time that the motion should allow for Third Reading.
We are in unusual circumstances. I am sure that the Minister will feel an urge to explain at some length why she cannot rush the Bill through as fast as my hon. Friend the Member for Hertsmere seems to want, and why we are to be given this period of reflection.
Needless to say, I am unhappy with the motion. Unless the Minister gives an adequate explanation, I will certainly want to resist it, as we generally do, not routinely but taking each case on its merits. I know that she will do her best. I can see her straining at the leash, desperate to let us have it in great detail and at great length, but unless she comes up with a satisfactory explanation, I am afraid that we will have to oppose the motion.
2.32 pm
Ruth Kelly: We had a lively and good-natured debate on Second Reading, and I very much look forward to continuing in the same tone today. I believe that the time allocated will allow us ample opportunity to discuss these important issues.
The House overwhelmingly agreed to have programming motions and timetable motions for Bills such as this, so that we could have sensible and serious debate on all issues. It is extraordinary that Conservative Members should choose a European matter on which to say that they have been granted too much time for debate. As the right hon. Member for Bromley and Chislehurst (Mr. Forth) suggested, we should probably note the day and the time. He said that he was stunned and delighted by the time available, and I am glad that he agrees that we have allowed sufficient time to address all the issues.
As for flexibility, we have until 5.30 pm at most for consideration in Committee, but if hon. Members feel that there has been sufficient debate, it is totally in order for proceedings to draw to a close before that time.
Question put:—
The House divided: Ayes 286, Noes 108.

Division No. 36]

[2.34 pm

AYES

Abbott, Ms Diane

Bennett, Andrew

Ainsworth, Bob (Cov'try NE)

Benton, Joe

Allen, Graham

Berry, Roger

Armstrong, Rt Hon Ms Hilary

Best, Harold

Atherton, Ms Candy

Betts, Clive

Atkins, Charlotte

Blizzard, Bob

Austin, John

Boateng, Rt Hon Paul

Bailey, Adrian

Bradley, Peter (The Wrekin)

Baird, Vera

Brennan, Kevin

Barnes, Harry

Brown, Russell (Dumfries)

Barron, Kevin

Browne, Desmond

Battle, John

Bryant, Chris

Bayley, Hugh

Burgon, Colin

Beard, Nigel

Burnham, Andy

Begg, Miss Anne

Caborn, Rt Hon Richard

467

Cairns, David

Henderson, Ivan (Harwich)

Casale, Roger

Hepburn, Stephen

Caton, Martin

Heppell, John

Challen, Colin

Hesford, Stephen

Chapman, Ben (Wirral S)

Heyes, David

Clapham, Michael

Hill, Keith

Clark, Dr Lynda (Edinburgh Pentlands)

Hodge, Margaret

Hood, Jimmy

Clark, Paul (Gillingham)

Hope, Phil

Clarke, Rt Hon Tom (Coatbridge)

Hopkins, Kelvin

Clelland, David

Howells, Dr Kim

Clwyd, Ann

Hoyle, Lindsay

Coaker, Vernon

Hughes, Beverley (Stretford)

Coffey, Ms Ann

Hughes, Kevin (Doncaster N)

Cohen, Harry

Humble, Mrs Joan

Coleman, Iain

Hutton, John

Colman, Tony

Iddon, Dr Brian

Connarty, Michael

Illsley, Eric

Cook, Frank (Stockton N)

Jackson, Glenda (Hampstead)

Cook, Rt Hon Robin (Livingston)

Jackson, Helen (Hillsborough)

Cooper, Yvette

Jamieson, David

Corston, Jean

Jenkins, Brian

Cousins, Jim

Johnson, Alan (Hull W & Hessle)

Cranston, Ross

Jones, Helen (Warrington N)

Cruddas, Jon

Jones, Kevan (N Durham)

Cryer, Mrs Ann (Keighley)

Jones, Lynne (Selly Oak)

Cummings, John

Jones, Martyn (Clwyd S)

Cunningham, Jim (Cov'try S)

Jowell, Rt Hon Tessa

Cunningham, Tony (Workington)

Joyce, Eric

Curtis-Thomas, Mrs Claire

Keeble, Ms Sally

Davey, Valerie (Bristol W)

Keen, Alan (Feltham & Heston)

David, Wayne

Keen, Ann (Brentford & Isleworth)

Davidson, Ian

Kelly, Ruth

Davies, Rt Hon Denzil (Llanelli)

Kemp, Fraser

Davies, Geraint (Croydon C)

Kennedy, Jane (Wavertree)

Dawson, Hilton

Khabra, Piara S

Denham, Rt Hon John

Kidney, David

Dhanda, Parmjit

Kilfoyle, Peter

Dobson, Rt Hon Frank

Knight, Jim (S Dorset)

Donohoe, Brian H

Kumar, Dr Ashok

Doran, Frank

Ladyman, Dr Stephen

Drew, David

Lazarowicz, Mark

Drown, Ms Julia

Lapper, David

Dunwoody, Mrs Gwyneth

Leslie, Christopher

Eagle, Angela (Wallasey)

Levitt, Tom

Eagle, Maria (L'pool Garston)

Liddell, Rt Hon Mrs Helen

Edwards, Huw

Linton, Martin

Efford, Clive

Lloyd, Tony

Ellman, Mrs Louise

Love, Andrew

Farrelly, Paul

Lucas, Ian

Field, Rt Hon Frank (Birkenhead)

Luke, Iain

Fisher, Mark

Lyons, John

Fitzpatrick, Jim

McAvoy, Thomas

Fitzsimons, Mrs Loma

McCabe, Stephen

Flynn, Paul

McCafferty, Chris

Foster, Rt Hon Derek

McCartney, Rt Hon Ian

Foster, Michael (Worcester)

McDonagh, Siobhain

Foster, Michael Jabez (Hastings)

MacDonald, Calum

Foulkes, George

McDonnell, John

Francis, Dr Hywel

MacDougall, John

George, Rt Hon Bruce (Walsall S)

McFall, John

Gerrard, Neil

McGuire, Mrs Anne

Gilroy, Linda

McIsaac, Shona

Griffiths, Jane (Reading E)

McKechin, Ann

Griffiths, Nigel (Edinburgh S)

McKenna, Rosemary

Griffiths, Win (Bridgend)

Mackinlay, Andrew

Grogan, John

McNamara, Kevin

Hain, Peter

Mactaggart, Fiona

Hall, Mike (Weaver Vale)

McWalter, Tony

Hall, Patrick (Bedford)

Mahmood, Khalid

Hamilton, David (Midlothian)

Mahon, Mrs Alice

Hanson, David

Mallaber, Judy

Harris, Tom (Glasgow Cathcart)

Mandelson, Rt Hon Peter

Havard, Dai

Mann, John

Healey, John

Marris, Rob

Henderson, Doug (Newcastle N)

Marsden, Paul (Shrewsbury)

468

Martlew, Eric

Shipley, Ms Debra

Merron, Gillian

Simon, Siôn

Michael, Rt Hon Alun

Skinner, Dennis

Miliband, David

Smith, Angela (Basildon)

Mitchell, Austin (Gt Grimsby)

Smith, Rt Hon Chris (Islington S)

Moffatt, Laura

Smith, Geraldine (Morecambe)

Moonie, Dr Lewis

Smith, John (Glamorgan)

Moran, Margaret

Soley, Clive

Morgan, Julie

Southworth, Helen

Morris, Rt Hon Estelle

Spellar, John

Mountford, Kali

Steinberg, Gerry

Mudie, George

Stewart, David (Inverness E)

Mullin, Chris

Stinchcombe, Paul

Munn, Ms Meg

Stoate, Dr Howard

Murphy, Denis (Wansbeck)

Strang, Rt Hon Dr Gavin

Murphy, Rt Hon Paul (Torfaen)

Stringer, Graham

Naysmith, Dr Doug

Sutcliffe, Gerry

Norris, Dan

Tami, Mark

O'Hara, Edward

Taylor, Ms Dari (Stockton S)

Olner, Bill

Taylor, David (NW Leics)

Organ, Diana

Thomas, Gareth (Clwyd W)

Osborne, Sandra (Ayr)

Thomas, Gareth R (Harrow W)

Owen, Albert

Timms, Stephen

Palmer, Dr Nick

Tipping, Paddy

Pearson, Ian

Todd, Mark

Perham, Linda

Touhig, Don

Picking Anne

Trickett, Jon

Pickthall, Colin

Truswell, Paul

Pike Peter

Turner, Dennis (Wolverh'ton SE)

Plaskitt, James

Turner, Dr Desmond (Kemptown)

Pond, Chris

Turner, Neil (Wigan)

Pope Greg

Twigg, Derek (Halton)

Pound, Stephen

Twigg, Stephen (Enfield)

Prentice, Ms Bridget (Lewisham E)

Tynan, Bill

Prentice, Gordon (Pendle)

Vis, Dr Rudi

Primarolo, Dawn

Walley, Ms Joan

Prosser, Gwyn

Ward, Ms Claire

Purchase, Ken

Wareing, Robert N

Quin, Rt Hon Joyce

Watson, Tom

Quinn, Lawrie

Watts, David

Rammell, Bill

White, Brian

Rapson, Syd

Wicks, Malcolm

Raynsford, Rt Hon Nick

Williams, Rt Hon Alan (Swansea W)

Reed, Andy (Loughborough)

Robertson, John (Glasgow Anniesland)

Winnick, David

Winterton, Ms Rosie (Doncaster C)

Wood, Mike

Roy, Frank

Woolas, Phil

Ruane, Chris

Worthington, Tony

Ruddock, Joan

Wright, David (Telford)

Ryan, Joan

Wright, Tony (Cannock)

Salter, Martin

Wyatt, Derek

Savidge, Malcolm

Sawford, Phil

Tellers for the Ayes:

Shaw, Jonathan

Mr. Tony McNulty and

Sheridan, Jim

Mr. Nick Ainger.

NOES

Allan, Richard

Cameron, David

Amess, David

Campbell, Gregory (E Lond'y)

Atkinson, Peter (Hexham)

Campbell, Rt Hon Menzies (NE Fife)

Bacon, Richard

Baker, Norman

Carmichael, Alistair

Baldry, Tony

Cash, William

Barrett, John

Chapman, Sir Sydney (Chipping Barnet)

Beggs, Roy

Beith, Rt Hon A J

Clappison, James

Boswell, Tim

Davey, Edward (Kingston)

Brady, Graham

Davis, Rt Hon David (Haltemprice)

Brake, Tom

Djanogly, Jonathan

Brooke, Annette

Dodds, Nigel

Browning, Mrs Angela

Donaldson, Jeffrey M

Burstow, Paul

Doughty, Sue

Burt, Alistair

Duncan, Peter

Butterfill, John

Ewing, Annabelle

Calton, Patsy

Fallon, Michael

469

Flight, Howard

Osborne, George (Tatton)

Forth, Rt Hon Eric

Page, Richard

Foster, Don (Bath)

Paterson, Owen

Francois, Mark

Pickles, Eric

Gale, Roger

Price, Adam

Gidley, Sandra

Pugh, Dr John

Gillan, Mrs Cheryl

Reid, Alan (Argyll & Bute)

Green, Matthew (Ludlow)

Rendel, David

Grieve, Dominic

Robathan, Andrew

Hancock, Mike

Robertson, Angus (Moray)

Harris, Dr Evan (Oxford W)

Robinson, Iris (Strangford)

Hayes, John

Robinson, Peter (Belfast E)

Heath, David

Russell, Bob (Colchester)

Hermon, Lady

Sanders, Adrian

Hoban, Mark

Sayeed, Jonathan

Hogg, Rt Hon Douglas

Simmonds, Mark

Holmes, Paul

Simpson, Keith (Mid-Norfolk)

Howarth, Gerald (Aldershot)

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

Jenkin, Bernard

Stunell, Andrew

Keetch, Paul

Swayne, Desmond

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

Swire, Hugo

Syms, Robert

Kirkwood, Archy

Taylor, Ian (Esher & Walton)

Lamb Norman

Taylor, John (Solihull)

Laws David

Thomas, Simon (Ceredigion)

Leigh, Edward

Thurso, John

Letwin, Oliver

Turner, Andrew (Isle of Wight)

Lewis, Dr Julian (New Forest E)

Tyler, Paul

Liddell-Grainger, Ian

Walter, Robert

Lidington, David

Waterson, Nigel

Loughton, Tim

Watkinson, Angela

McIntosh, Miss Anne

Weir, Michael

McLoughlin, Patrick

Wilkinson, John

Mawhinney, Rt Hon Sir Brian

Williams, Hywel (Caemarfon)

Mercer, Patrick

Wishart, Pete

Mitchell, Andrew (Sutton Coldfield)

Younger-Ross, Richard

Murrison, Dr Andrew

Tellers for the Noes:

Oaten, Mark

Mr. John Randall and

Öpik, Lembit

Mr. Peter Luff.

Question accordingly agreed to.

Orders of the Day

  European Communities (Finance) Bill
  [1ST ALLOTTED DAY]
  Considered in Committee, pursuant to Order [this day]
  [SYLVIA HEAL in the Chair.]

  European Communities (Finance) Bill
    Clause 1

      EXTENDED MEANING OF "THE TREATIES" AND "THE COMMUNITY TREATIES"
      2.51 pm
      The Economic Secretary to the Treasury (Ruth Kelly): I beg to move, That the clause stand part of the Bill.
      The purpose of the Bill is to enable the United Kingdom to give effect to the new own resources decision amending the arrangements for financing the Community budget agreed at the 1999 Berlin European Council.
      Clause 1 provides for the new own resources decision agreed by the Council of Ministers on 29 September 2000 to be added to the list of Community treaties in section 1(2) of the European Communities Act 1972. This addition will allow payments made by the United Kingdom, pursuant to the decision, to be charged directly on the Consolidated Fund, under section 2(3) of the 1972 Act.
      The new own resources decision that we are considering is little changed from the 1994 own resources decision, and any changes made to the decision are financially neutral for the United Kingdom. Our net contribution to the EU budget will not change as result of what we are considering today.
      The changes were rather technical in nature. The main change arising from the decision is to allow for an increase in the amount that member states can retain against the cost of collecting the traditional own resources. That amount was increased from 10 per cent. to 25 per cent.
      Secondly, the decision allows for a staged reduction in the maximum call-up rate of the VAT-based resource, from the current 1 per cent. to 0.5 per cent. in 2004. Thirdly, it maintains the ceiling for own resources at 1.27 per cent. of EU national income. It simplifies the calculation of the UK's abatement, removing unnecessary and redundant calculations. However, as the recitals to the own resources decision make clear,
      "this simplification has no impact on the determination on the amount of the correction"—
      the abatement—
      "granted to the UK."—
      Finally, the decision adjusts other member states' shares of the financing of the UK's abatement, in order to meet concerns raised by Germany, the Netherlands, Austria and Sweden, with no effect on the UK.
      In line with the precedent set in previous own resources decisions, the UK agreed to forgo windfall gains arising to the UK from the changes to the financing of the EU budget and from a change in the treatment of

      471
      pre-accession aid that will occur on enlargement. We achieved a position that was, as my right hon. Friend the Prime Minister described,
      "not a euro more, not a euro less",
      and ensured that amounts currently abated will remain abated under the new decision.
      The own resources decision implements parts of the wider reforms agreed at the Berlin Council that are an important step forward for the EU and good for the UK. That Council secured declining expenditure in the 15 EU countries over the financial planning period. It stabilised expenditure as a proportion of gross national product, thereby paving the way for a successful enlargement. It achieved no increase in the own resources ceiling. it secured the UK abatement, fully intact, and took steps in the right direction on policy reform.
      The Bill shows the huge benefits of Britain's constructive engagement with the EU. It shows that by taking a leading role in reform and working together with other member states, we can achieve outcomes that are good for the UK and good for the EU.
      Mr. Howard Flight: Our usual complaint about financial legislation in recent years is that it has been too long, obscure, often wrong and with too much to amend. Our problem today is that the Bill is virtually impossible to amend. I had considered proposing a sunset clause to make the Bill conditional on adequate reform of the common agricultural policy in a given period of time, but I felt that that tactic would not work. However, I shall revert to the crucial question of CAP reform later.
      Parliament can really only say yes or no to the Bill, because it is the Council decision of 29 September 2000, following Berlin, which, in essence, contains the detailed legislation. Before I focus on the CAP, the crucial issue that underlies clause 1, I want to speak about article 9 of the Council decision. We debated the matter at some length on Second Reading, as it enables the EU to propose the implementation of direct taxation.
      The House will recall that when my right hon. Friend the Member for Wokingham (Mr. Redwood) and I objected to article 9 on Second Reading, we were advised by the Economic Secretary that there was nothing to worry about, as no such proposition would ever arise. I cannot resist pointing out that the words were scarcely out of her mouth when up popped Belgium—backed by Germany—proposing to replace EU revenues paid by national Governments with an EU-wide system of taxation. It is therefore wrong to say that such a concept is not on the agenda: it is on the agenda, and is contained in the EU decision that we are considering today.
      I congratulate the Chancellor on his robust opposition to that concept, and on the effective lecture that he gave to the EU, in which he urged other nations to get on with supply-side reforms of capital and labour markets. Did that lecture enjoy the full support of the Prime Minister? I should like to know. It is well known, in euroland and the City of London, that the Chancellor is strongly opposed to euro membership—indeed, he is now referred to as the Eurosceptic Chancellor. But is the policy being followed on the euro the Prime Minister's or the Chancellor's?
      On Second Reading, Opposition Members made the point that there is no free lunch, and we asked the Economic Secretary what would be the cost of forgoing
      472
      our windfall on Euro enlargement. She replied that the cost would be of the order of 220 million euros, but in such language that it appeared that she was saying that it would be a one-off loss. However, I am pleased to state that, in subsequent correspondence, she has made it clear that the loss will be in every year that we give up as part of the deal.
      The main impact of the Council decision is the shift from VAT-based contributions to GNP-based contributions. I asked the Economic Secretary whether the definition of GNP to be used would be the official figure, or whether it would include estimates of undisclosed economies. The Economic Secretary has advised me that the official figures would be used in that context.
      Why was it deemed appropriate, when considering how the Maastricht targets could be met, to take GNP figures for the different EU states that included estimates for undisclosed economies, on the basis that some countries had much larger black economies than others? Why has it been decided now that it is not necessary to calculate fair contributions where the GNP element has gone up? I point to that inconsistency, and to the fact that in terms of Maastricht, the rules result in those with larger undisclosed GNPs contributing less than they should.
      3 pm
      I have raised the rather fundamental issue implicit in the Council agreement that 1.27 per cent. of GNP is a sufficient transfer payment to make a common currency work. In the United States, for example, transfer payments are of the order of 11 per cent. of GNP. I have received no answer to this question, which was important in terms of the Council decision and the economic prospects for the euro. The Government must focus on this matter.
      I have noted that the Chancellor has added another item to his economic tests for the euro—that of success. Clearly, the euro must be a success before the right hon. Gentleman will even think about it. However, it is important to ask whether the transfer payment arrangements—which have been set in stone by the Council decision at 1.27 per cent. —are sufficient in terms of economic analysis for a common currency to work.
      Mr. Edward Davey: Has the hon. Gentleman read the European Commission's analysis that said that, within member states, there are fiscal transfers between different regions, such as in the UK between London and the south-east and Scotland? When one is analysing the importance of fiscal transfers as an adjustment mechanism to compensate for the fact that we are losing the currency as an adjustment mechanism, one must take into account the fiscal transfers within each existing member state because the differences between regions within each member state may be as big as those between member states.
      Mr. Flight: I am aware of that study, which has some relevance in other parts of the world that share a currency. But one must look at the transfer payments of individual countries within the EU because this matter goes beyond Scotland versus the south-east and reaches the whole economy in terms of competitiveness and cost structure. Many costs are determined on national bases by trade union agreements and so forth. I am calling for a study of the territory, including transfers within individual

      473
      economies as well as among them. I am not aware of a convincing analysis to suggest that the level of transfer payments that the Council decision has set stands up. It may do, and I am not pre-judging the situation, but it is clear as a matter of theory and practice that the euro will not be a success unless that is the case.
      The main underlying issue raised by the clause is enlargement and the CAP. The discussions in Berlin, and the Council decision emerging from them, were all about changes in the financing arrangements to enable enlargement and modest reforms to the CAP to be included. Is enlargement by 2004 for real, or are we living with another politically convenient deceit? The Opposition support enlargement because a larger and more diverse EU clearly holds out the prospect of the Union's remaining an association of nation states trading freely among themselves.
      Enlargement will be impossible if the CAP is not reformed significantly. Despite the fact that there are plans for further reforms in the next two years, there is insufficient time to effect those by 2004 to allow enlargement to occur. Are we dealing with a conspiracy—deliberate or otherwise—to delay enlargement, or with extremely bad management?
      I wish to refer to the history of those discussions at Berlin, which led to last year's Council decision. The European Council agreed that there would be a series of reforms under Agenda 2000 in the crucial policy areas of the CAP, the budget and regional policy to pave the way for enlargement. It was clear that the 1992 reforms of the CAP, while meeting the demands of GATT, would not be sufficient to prevent further pressures at subsequent trade negotiations.
      The 1999 CAP reforms, in conjunction with the later Council order, were held at a time of crisis and preoccupation with Kosovo. As a result, they were substantially watered down and not properly pursued. If the agreement reached in Berlin was regarded here as a success, the world could be forgiven for wondering what a failure would look like. The most significant feature of the reform has been that the depth of the price cuts has been subsequently reduced.
      The main impetus for reform was budgetary, and the level of the budget had been agreed before the reform negotiations on the CAP. The first reform would have exceeded the budget; the second appeared to meet it. At the time, the United Kingdom, along with Sweden, was leading calls for reform and suggested that even the original 2000 proposals did not go far enough. It is not clear how the Government can say today that all that emerged was satisfactory.
      The UK was a member of what was known as the London Club or the Gang of Four, who wanted to see the quota system abolished and the milk market liberalised by 2006. However, the result was that these will be increased in 2005–06. In terms of the arable sector, the United Kingdom, along with Denmark and Sweden, wanted to end set-aside.
      The irony is that, even by the admission of German Ministers, further reforms will be needed to comply with the demands of enlargement and the next world trade negotiating round. The 1990 reforms in no way met that either. The reality was that the millennium round
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      collapsed before reaching agriculture and great pressure was removed as a result, for the time being. If enlargement goes ahead, all professional analysts have commented that extending the CAP in its present form will be unworkable. At one stage, Fischler had thought that there would be a solution, with price supports changing to income supports. Then, the new entrants would not need to cut prices and would not even have to be brought into the CAP. However, this suggestion was perverse; why should a farmer in East Anglia get subsidies while a farmer with a similar-sized farm in Poland does not?
      I shall focus on the options because we rarely deal in this Chamber with the issues and how the CAP might be reformed. The first designated area of possible reform has the unpleasant euroland name, degressivity, which in simple English means the reduction of direct payments over time. It involves the replacement of price support with direct payments and then the reduction of the latter in time.
      Allowing a fixed time span ensures that budget costs rise but then fall again and avoids the potential problems associated with extending CAP payments to member states, which the European Union could not afford to be given to farmers who had not experienced falling prices in the first place. Allegedly, that system would offer the best route to contain budget costs.
      That approach was opposed by Germany and supported by France and the United Kingdom. France introduced it to counter the move towards co-financing, which Germany had proposed. Furthermore, France proposed the reduction of direct payments by between 1 per cent. and 3 per cent. each year, with exemptions for small farmers. The UK proposed 4 per cent. cuts across all direct payments. Estimates at the time showed that cuts of 3 per cent. a year for all payments would save about 4.5 billion euros over seven years. Cuts of 3 per cent. in arable payments and 1 per cent. in other sectors would save about 3 billion. In its most extreme form, the reduction could eliminate direct payments over a fixed time period. It would mean that, while the initial costs of enlargement would be high, in time they would be reduced.
      The removal of the price supports would have had the beneficial consequence of solving the export subsidy problem. Not only do export subsidies cost the EU a substantial sum: they have caused the depression of world food prices, which has affected third-world economies particularly severely.
      The second proposed approach to reform has been called co-financing or repatriation, which is sharing the CAP budget costs between EU and national budgets. That would involve removing part of the funding of agriculture from the EU budget and handing it to national Governments. It does not, therefore, necessarily reduce the overall cost and it could increase policing costs. Support for that approach went along the lines of net beneficiaries versus net contributors. Germany proposed it to try to reduce its contributions and the UK opposed it at the time because we felt that it would be likely to distort the single market.
      Additionally, that approach is unpopular with farmers, who expect to get less as a result. It would solve the problem of what to do about enlargement, as it would be up to the countries concerned. Many of the central European countries do not want agricultural subsidies because they want to reduce their agricultural sectors.

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      Repatriation failed as an idea in 1999 and it looks as though it will fail again as the other reforms have failed sufficiently to reduce the level of prices, making the option extremely unattractive to beneficiaries such as France and Ireland.
      The third approach, which again has a nasty Euro name—modulation—is about targeting support to smaller farms and limiting payments to particular farms. The concept is that total aid payable per farm could be capped or compensation above certain thresholds met at less than a full 100 per cent.
      The UK opposed all forms of modulation essentially because of the size profile of our farms. Capping the amount that could go to any individual farm would hit the UK the most. That approach was first proposed in 1992 and again in the early stages of the 1999 reforms, but it was blocked on both occasions. To a lesser extent, under the rural development project, countries could divert a fraction of their receipts to other projects, such as agri-environmental projects and afforestation, but only a handful have taken up that option, including Britain, where it has accounted for only 2.5 per cent. of the money distributed through the CAP.
      In essence, none of those proposals has got anywhere. I mentioned them to put them on the record because that is all that is on the record. It is all very well to talk of the need for CAP reform, but how is the policy to be reformed if the Council decision that we are asked to approve today is to work?
      3.15 pm
      The problem with the CAP is that no one knows any longer what it is for. It has outlived its original intent by many years. It was intended to increase productivity, and to ensure a fair wage for farmers and that the price of food was kept at a fair level. Now, it does almost the contrary on all three counts. Productivity has increased and there is no logic for the CAP's being converted into a social policy. Should intensive farming be encouraged? People tend to argue that, if farmers should receive special treatment, it is as custodians of the environment.
      Fundamental thinking is urgently required on the matter and the UK should lead in that. If we do not undertake that, we are not serious about enlargement and the countries of eastern Europe will end up being badly let down. It is a mistake that repatriation failed as an idea in 1999 because other reforms had not reduced prices sufficiently to make it attractive enough. The present crisis in British farming, for example, needs immediate prescriptive attention, which we could provide much more effectively if we were managing our own agricultural policy rather than being forced into the inappropriate straitjacket of the CAP for British farming. By analogy, the only solution for Poland, Hungary, the Czech Republic and the other potential member countries would be for them to manage their own agricultural support policies and to have the freedom to decide what to do, within some broadly agreed cost guidelines.
      Today, we are faced with the choice of a yes or no on a fundamental clause of two or three lines that concerns an EU decision which is a good decision in terms of how funding has changed but which is inadequate to meet its overall objective, which is to permit enlargement. I repeat the crucial message that, unless we have a major reform of the CAP—potentially along the lines that I suggested—well before 2004, there will be no enlargement then.
      Jim Sheridan: I pay tribute to my predecessor, Mr. Tommy Graham, who, as many hon. Members will remember, was a colourful character both inside and outside the Chamber.
      On behalf of my constituents I welcome the financial reforms to which the Bill commits us. It paves the way for the progressive enlargement of the EU. In doing so, I firmly believe that opportunities for growth, development and prosperity for all my constituents will flow from those reforms. I say that with a note of caution, however, as those objectives will be achieved by the British electorate only if there is a level playing field for worker participation and fair competition for all our businesses.
      West Renfrewshire is experiencing significant job losses in the electronics and defence industries. Established companies such as Compaq and Selectron are making people redundant as we speak. Perhaps that reflects the difficulty that that industry is going through, but that is not the case with ROF Bishopton, where BAE Systems proposes the closure of its ammunition-producing facility. That is not happening because the skilled work force are resistant to change or unproductive. Their only drawback in life is that they belong to a country and are employed by a company in which consultation about factory closures and redundancies is a sham. Such companies can move production to other member and non-member countries of the EU with total impunity, at times exploiting the financial benefits that are offered from Europe. That is unfair and unacceptable to the British electorate.
      I do not wish to ponder on the negatives of belonging to the EU: benefits flow from it. Tangible evidence can be found in my constituency, where European funding has helped to rejuvenate areas such as Port Glasgow, which has a high level of deprivation. Its people have been ignored for too long. The rejuvenation has been achieved without the taxpayers having to pay increased taxes and without any increase in our overall contribution to the EU budget.
      The Labour Government's financial prudence, at home or in Europe, means that many of my constituents enjoy a stable standard of living, with low mortgage rates and even lower levels of unemployment. If we were to accept the Luddite approach to Europe articulated by many in the official Opposition, it would be disastrous for our country, our electorate and, more important, our businesses. Their lack of progress in Europe is consistent with the performance of our countries' national football teams, and let us hope that that will also improve.
      Most of my adult life has been spent in manufacturing industry, and I make no apology for that. I have witnessed at first hand the corrosive effect on communities of needless job losses. The hostility shown by the official Opposition to workers' rights was a significant factor in those job losses and a major reason why I entered the world of politics. It is an extremely frustrating and humbling experience to have to depend on our European colleagues in the trade union movement to argue our case in European works councils simply because our British workers cannot be represented there.
      In conclusion, it would be remiss of me not to mention my party's constructive partnership not only with our European partners but with the Scottish Parliament—a partnership that, unfortunately, the Scottish National party wishes to destroy. It is unfortunate that a party that claims to want independence in Europe is not present to hear this important debate on European finance.

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      Many people have asked me for my assessment of my early days in this House. What has struck me most is the generosity, courtesy and advice offered by my experienced colleagues on both sides of the House. I think that I reflect the views of many of the new Members when I say thank you.
      Mr. Edward Davey: I start by paying tribute to the hon. Member for West Renfrewshire (Jim Sheridan) for his maiden speech. It is clear from his first outing in the House that he will be fighting fiercely on behalf of his constituents and their interests, especially on employment in his constituency. I share concerns about job losses in the electronics sector of our economy. The imbalance in the British economy is a problem. We have regional imbalances and an imbalance between the manufacturing and service sectors. I look forward to future contributions from the hon. Member on that subject. He will bring a great deal of expertise and knowledge to bear on our deliberations.
      On Second Reading we had a long debate on many issues surrounding EU budgetary reform—the cap, the need for greater accountability and the underlying issues of how the budget could develop. Clause 1 applies specifically to the details of the own resources decision. There are three elements to that decision that deserve discussion, one of which I want to focus on. The first is the change in the weightings given to the different elements of own resources and the switch away from the VAT element to the GNP element. That has been welcomed by hon. Members on both sides of the Committee, so there is probably little more to say about it except that we hope that it will continue. It is good that it has been achieved.
      The second element is the ceiling of 1.27 per cent., which was agreed. Hon. Members on both sides of the Committee have generally welcomed that, in the sense that we need to ensure that before the EU takes more of the British taxpayers' hard-earned money it reforms its budget and the way in which it spends it. Therefore, putting a medium-term cap on its size is a necessary discipline, which the Liberal Democrats welcome.
      The third element is the triumph that the United Kingdom Government claim for retaining the United Kingdom abatement. It may be a good thing, but there is no information before the Committee to enable it to know whether it is a good thing in the longer term. That may sound like heresy. We all remember Mrs. Thatcher coming back from Fontainebleau having achieved the abatement and claiming that it was a major success for UK diplomacy. Successive Governments have defended the abatement. It may prove that they were right to do so, but I shall ask the Minister some questions to find out whether the abatement is such a success as we have been told.
      In order to retain the UK abatement, we have had to give up windfall gains that we would otherwise have achieved from the switch from VAT to GNP and other detailed changes behind the own resources decision, so the question for the Committee and the Government is whether what we have had to give up is more than we have gained from keeping the abatement.
      It is clear from the Berlin summit communiqué that the amount that we had to give up was relatively small—the estimate was 220 million euros—but that was not the first
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      time that the UK abatement was retained at the expense of windfall gains. In 1988 the Conservative Government negotiated the retention of the United Kingdom abatement. In 1988 and in 1992, windfall gains that might have accrued to the United Kingdom were given up in order to retain the abatement. The Committee will quickly see what I am implying: if by fighting to retain the abatement in 1988, 1992 and 2000 we gave up cumulatively more in windfall gains than would otherwise have accrued to us, we are losing out. That may or may not be the case because I do not have the figures.
      The Library could not find in the communiqués issued after the 1998 and 1992 Councils a figure that was given in the same way as in the communiqué after the 2000 Berlin summit—in other words, the 222 million euros. There was no figure on record of the windfall gains that the UK gave up by retaining the abatement.
      My question is factual. The Minister may not be able to give me an answer today, although perhaps her officials can help her out. If she cannot give me the figures, perhaps it is a good thing that the Third Reading debate will not be held until 16 October so that we can obtain the figures before we give the Bill its Third Reading. I doubt that there can be precise figures that would enable us to make judgments on the benefit of retaining the UK abatement and the successive amounts that we have forgone because we did not gain from those windfalls.
      3.30 pm
      That equation is necessarily difficult, as is shown by the fact that the benefit from the UK abatement changes every year. In 1991, the abatement was worth £2,497 million at cash prices—£2.5 billion. In 1995, it was worth £1.2 billion, and in 2002 it was worth £2 billion. Its value changes every year because it contains so many variables. No doubt the calculation of what the UK would have retained, if it had kept all those cumulative windfall gains, depends on many other variables such as the base of consumer expenditure underlying the VAT element of the own resources decision or the different rates of duty and levy collected in each country. Those variable factors would be part of the calculation.
      One would not expect the Minister to give precise figures in order for us to make a decision, but one could expect ranges of figures—an indication of the size we are talking about. For example, is the UK rebate worth between £1 billion and £2 billion each year—depending on those factors—and is the amount that we would have gained from the windfalls between £500 million and £1 billion? Such a range of figures would be useful. The Committee could then come to a final decision about whether successive Governments were wise to fight so hard for the UK rebate, not only at Berlin but before that in 1988 and 1992.
      The Minister raises her eyebrows to the ceiling—clearly, the calculation is difficult—but if we are to hold the Government to account for their decisions on negotiations made on behalf of the UK taxpayer we need those figures. Successive Governments may cumulatively—almost unknowingly—have cost the UK taxpayer a lot of money in net terms. By defending that sacred cow of Fontainebleau and by going to the wall and saying that we will fight to retain the UK abatement, we may be doing ourselves an injustice and costing the UK taxpayer more.

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      It is time to examine the matter in detail, because we shall no doubt return to the reform of the EU budget and the own resources decision in five or six years, when another European Communities (Finance) Bill will appear before a successor Parliament. If we do not get the figures right—if the Treasury and the Foreign and Commonwealth Office do not start to work them out—we shall again get it wrong in future negotiations on reform of the EU budget.
      Perhaps we should change our whole negotiating position. Perhaps—I do not know, because I do not have the figures—we would earn an awful lot of prestige and benefit in European diplomacy and in our standing in the European Commission if we said, "Hold on, we are prepared to look at the issue of the UK rebate, but we will only even consider giving it up if all the windfall gains that you previously asked us not to take are given back to us." We might benefit from that approach. Instead of mounting a jingoistic, nationalistic—even prejudiced—defence of the Fontainebleau agreement, we might realise that it was to our benefit to lay a certain sacred cow to rest.
      In some areas of the UK, the rebate has negative effects. Hon. Members may be aware that agriculture suffers from the rebate. The argument is complicated, as European financial discussions always are. The knock-on effect of the green pound and the associated calculations is that UK agriculture does not benefit as substantially as it might from agrimonetary compensation.
      Mr. Flight: I entirely support the point that the hon. Gentleman makes, but is not the reason for those effects that, under Fontainebleau, the UK is obliged to contribute 70 per cent. of the cost of the exchange rate adjustment and that, over the past few years, the Government have failed to do so?
      Mr. Davey rose—
      Angus Robertson (Moray): The Conservatives negotiated that arrangement.
      Mr. Davey: The hon. Member for Arundel and South Downs (Mr. Flight) is right but, as the hon. Member for Moray (Angus Robertson) points out, the negotiations were conducted by a Conservative Government. If the UK Government pay their fair share of agrimonetary compensation under the green pound revaluation compensation mechanisms, the UK loses out in the following year when the rebate is clawed back. Her Majesty's Treasury therefore never wants to pay out as much as it should in agrimonetary compensation and UK farmers are disadvantaged.
      That is a real problem. It is a particularly British problem as more and more countries adopt the euro. We shall be the only country that could receive agrimonetary compensation, so changing the nature of that agreement—only we shall have a real interest in it—will become nigh on impossible. That disbenefit for UK farmers stems from the retention of the UK rebate, so by looking again at the sacred cow of the UK rebate we might obtain a better deal not only for UK taxpayers but for UK farmers.
      All those statements are conditional—we do not have the information before us. Even with the best will in the world, my researches before the Committee sat did not
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      produce the relevant information. During my exchanges with the Minister on Second Reading about the definition of "windfall gain" and in her subsequent, kind letter of 16 July, copies of which were sent to the hon. Member for Arundel and South Downs and to the Library, it has become clear that the point is of some substance.
      We needed those exchanges in order to be sure what a windfall gain was: whether it was a genuine, one-off gain or a cumulative gain. From the hon. Lady's letter, it appears that the gain is cumulative, which is what worries me. We have established that the gain is cumulative, so the UK could have given up an awful lot of money in order to retain its abatement.
      The Economic Secretary will be glad to know that I do not expect her to give me detailed figures today, which would be quite demanding, but on Third Reading on 16 October, when the House will be asked to consider whether such agreements are really in the UK's interest, we will need that information. I hope that my contribution will set minds a-thinking in Her Majesty's Treasury and in the Foreign and Commonwealth Office about whether the UK could adopt a position at future negotiations that might save us money and might also help our farmers.
      Ruth Kelly: I am glad to say that once again we have had an interesting and good-natured debate. I pay tribute to my hon. Friend the Member for West Renfrewshire (Jim Sheridan), who spoke with passion about the employment situation in his constituency, and about the need to consult workers and protect their rights. He spoke from his own experience in manufacturing. He also pointed out the need to engage constructively with Europe. I look forward to hearing from him again on this subject, and I am sure that he has a significant contribution to make to the House.
      The Opposition spokesman, the hon. Member for Arundel and South Downs (Mr. Flight), referred to article 9, which we discussed on Second Reading. I thought that I had dealt with the matter fully at the time and made it absolutely clear that any taxation changes would need to be agreed by unanimity. There is no prospect of the United Kingdom endorsing such an approach. I am, however, glad that he decided to congratulate the Chancellor, and I look forward to his doing more of that.
      The hon. Gentleman referred to the definition of GNP. As he said, we discussed that after Second Reading, and I am glad to be able to give him a little more detail about it. I can assure him that all member states calculate three independent measures of GNP: production, income and expenditure. Those calculations are made in accordance with worldwide guidelines on national accounting. The three measures are balanced using supply-use tables. The balancing process ensures that even though certain illegal production can filter into a measure, it will generally be picked up in one of the calculations. For example, income from selling stolen goods may be spent legally and will therefore be picked up in the expenditure measure. I hope that I have reassured the hon. Gentleman on that point.
      In an interesting contribution to the debate, the hon. Gentleman also talked about the size of the transfer payments in the EU. As yet, there are no signs of economic and monetary union leading to new fiscal powers for the EU. EMU has left decisions on fiscal

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      policy firmly with member states, and those are co-ordinated, in a non-binding way, through the broad economic guidelines.
      Mr. Flight: The specific issue that I raised was not about resisting EU taxation and tax harmonisation, but about whether the euro can succeed as a currency within euroland without adequate transfer payments. I note that the Chancellor has recently attached great importance to being interested in the euro only if it is a success.
      Ruth Kelly: I thank the hon. Gentleman for that clarification, but I repeat that there are no signs of such pressure arising, and fiscal authority remains with member states. The question of the euro's success is implicit in the five economic tests, and no sixth test is being introduced.
      The hon. Gentleman went on to deal with the common agricultural policy and the forces at work due to enlargement. I assure him that the United Kingdom is at the forefront of the nations urging the EU 15 to expand and encouraging other states to join, as long as they meet the criteria, of course. I assure him also that 2004 is a realistic date. Although the Berlin ceiling provides for market support and rural measures, it does not include direct aid measures for farmers in the candidate countries. We hope that the EU will consider that issue in 2002, so clearly there will be pressure for further reform in the years ahead.
      I disagree with the hon. Gentleman's comment that CAP reforms have been watered down by the UK's approach. We are in the vanguard of those pressing for reform of the policy. The agreement that was reached was for the most radical reform of the CAP since its creation. It will provide a benefit to the average family worth £70 a year and achieve significant price cuts for beef and cereals. Of course, we want further, deeper cuts, and we will press for those with our neighbouring countries in Europe. For the first time, funds will be transferred to rural development.
      3.45 pm
      As the hon. Gentleman so rightly pointed out, at the negotiations at least three approaches to reform were set out: co-financing, degressivity and modulation. The UK endorsed progressive price cuts, and we look forward to reconsidering that in the mid-term review of the CAP, Modulation would provide significant flexibility and, for the first time, countries would be able to transfer resources to rural development. The UK intends to take advantage of that facility and transfer up to 4.5 per cent. of CAP spending to rural development by 2006–07.
      I was pleased that the hon. Member for Kingston and Surbiton (Mr. Davey) welcomed the switch to the GNP resource, which is of course a more progressive system. He welcomed also the ceiling of 1.27 per cent. on own resources, which, as he rightly pointed out, imposes the necessary financial discipline on EU countries. He asked detailed questions about the windfall gain and the UK rebate. Those are interesting questions, and I will attempt to answer at least some of them.
      As the hon. Gentleman knows, there are three elements to the windfall gains: that relating to successive shifts from VAT to GNP financing; a new element relating to
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      the switch to GNP as a result of an increase in the amount that member states can retain against collecting the traditional own resources; and a third element that will come into effect only after the next enlargement.
      The first element is eliminated by article 4(d) of the own resources decision. That has the effect of setting our contribution at a level equal to what it would have been if the switch to GNP had not taken place. The second element will be eliminated from 2001 by article 4(e) of the own resources decision. That subtracts from the abatement the UK's net gains resulting from the increase in the percentage of traditional own resources to be retained to cover collection and related costs.
      The calculation needed to eliminate the enlargement windfall gain will not, of course, arise until the year after the next enlargement. It will involve establishing the amount of pre-accession expenditure in the acceding countries in the year immediately before enlargement takes place, and excluding that amount from the expenditure on which the abatement is calculated. In subsequent years, that amount will be indexed using the euro-GNP deflator, and excluded from the expenditure on which the abatement is calculated. That ensures that, in real terms, what was unabated before enlargement will remain unabated afterwards.
      The hon. Gentleman asked whether it would be possible for the Treasury to calculate the cumulative effect of windfall gains forgone. As he rightly pointed out, that is a rather complex calculation of amounts that can vary from year to year. Indeed, it is not at all clear at the moment what will be the value of the windfall gains that will be forgone on enlargement, as that will depend precisely on which countries are eligible for enlargement and on the amount of pre-accession aid that is spent in the year preceding enlargement.
      The EU has come up with its own estimate, although I believe that others may come up with different estimates. It would be even more difficult to go back and calculate a cumulative total, and I can tell the hon. Gentleman that we are not even considering doing so. I assure him, as I have been assured, that the total of the windfall gains forgone is not significant compared with the size of the total UK abatement. I hope that I have reassured him and that he does not spend the recess trying to make his own calculations.
      Mr. Edward Davey: I am grateful for the Minister's assurance, but it would still be useful for Members to see the figures. Even if I do not spend my summer recess calculating them, I hope that someone from Her Majesty's Treasury will. Perhaps she can confirm that they will. We clearly have historical data on the windfall gains that were forgone after the 1988 and 1992 decisions by the Conservative Government, so it would be fairly easy for the intelligent people in the Treasury to calculate the figures. If the brains exist in the Treasury to produce the formula in the first place, surely its officials can make a prediction, or a range of predictions, for the windfall gains forgone because of the 2000 decision.
      Ruth Kelly: I am sure that the Treasury team is extremely flattered by the hon. Gentleman's words, and I shall consider his request. However, it is not a simple calculation and it is not clear whether it would make sense, but I shall heed his words.

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      The hon. Gentleman also mentioned the effect of the Fontainebleau agreement on the green pound. He rightly explained that the Conservatives introduced the system when they were in government. Their Governments did not pay out a penny of the optional money that was available for agrimonetary compensation, whereas this Government have taken advantage of it to support our farmers.
      In conclusion, the deal is good for Britain and Europe. It maintains financial discipline, shifts financing to GNP and retains the UK's abatement. I hope that the arguments made on Second Reading and those that we have pursued extensively today make the clause acceptable to the Committee.
      Question put and agreed to.
      Clause 1 ordered to stand part of the Bill.
      Clause 2 ordered to stand part of the Bill.
      Bill reported, without amendment.
      To be read the Third time tomorrow.

  Northern Ireland
  3.54 pm
  The Minister of State, Northern Ireland Office (Jane Kennedy): I beg to move,
  That the Police (Northern Ireland) Order 2001 (S.I., 2001 No. 2513), dated 18th July 2001, a copy of which was laid before this House on 18th July, be approved.
  I was tempted to move the order formally, but I see that some hon. Members are here to debate it.
  The order, which was made in Privy Council yesterday under the procedure in section 85 of the Northern Ireland Act 1998, makes three essentially technical amendments to policing legislation and comes into effect on 30 July. Before going into those in detail, I want to ensure that hon. Members are in no doubt: the order does not arise from the Weston Park talks. It addresses two issues that have arisen on new police recruits—referred to as police trainees—and takes the opportunity to make a technical amendment on parliamentary procedure, which I hope will be welcome.
  I also want to set out for those not familiar with section 85 of the 1998 Act how it works. In brief, Her Majesty the Queen at Privy Council makes the order. It must then be approved by resolution of both Houses of Parliament within 40 sitting days. If it is not, then it ceases to have effect.
  The order makes two amendments to the Police (Northern Ireland) Act 2000 and a further amendment to the Firearms (Northern Ireland) Order 1981. The main change concerns the appointment and training of the first new recruits to the Police Service of Northern Ireland. The first amendment relates to section 39 of the 2000 Act, which provides for the appointment of police trainees. As recommended by the Patten report and therefore as provided for in the Act, police trainees do not acquire the status and powers of police officers and are not subject to police terms and conditions until they have successfully completed their recruit training. As a consequence, section 41 of the Act provides for the Secretary of State to make regulations setting out the terms and conditions of trainees. It also requires that the Policing Board, among others, be consulted before the regulations are made.
  In spite of the Government's considerable efforts to bring about the necessary agreement on outstanding policing issues to enable the Policing Board to be established, it is not yet in place; nor is it likely to be in time to be consulted before the regulations for the trainees are needed. It is planned that the trainees will be appointed in September. The order accordingly substitutes the Police Authority for Northern Ireland for the board for the purposes of consultation, and to undertake any of the board's functions under the regulations until the board is in place. Although that is not what we would have wanted to do, it is a sensible remedy. Put simply, it enables us to go ahead to set terms and conditions for the trainees.
  On the second issue that affects recruits, the proposed amendment to the Firearms (Northern Ireland) Order 1981 exempts trainees from the requirement to hold firearms certificates. That will avoid the necessity for the Chief Constable to issue individual firearms certificates to trainees for the purposes of firearms training. Again, I hope that that makes sense. Police officers United Kingdom-wide are already exempt.

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  Finally, the order will amend section 76 of the 2000 Act. As it stands, section 76 requires that a draft order to renew the 50:50 recruitment provisions, under section 47(3), and draft regulations on flags and emblems for the new policing service, under section 54, must be laid in Parliament for 40 days before they come into effect, but section 76 does not require that they be debated. The amendment applies the affirmative resolution procedure, which guarantees debates in both Houses, and allows the legislation to come into effect immediately thereafter.
  To be frank, we thought that we had done that in an amendment to the Police (Northern Ireland) Bill in the other place in response to the report by its Delegated Powers and Deregulation Committee which called for the affirmative procedure to be applied to the powers in those clauses. That is what we meant to do at the time and are now doing through the order. With those brief comments, I commend the order to the House.
  3.58 pm
  Mr. John Taylor: I am grateful to the Minister for setting out the provisions of this short but none the less important order. The Conservatives will not oppose it if it is pressed to a Division.
  I do not intend to follow the Minister by going into detail, but the order effectively enables the Secretary of State to consult the Police Authority for Northern Ireland on regulations for new recruits made under section 41 of the Police (Northern Ireland) Act 2000 rather than the new Policing Board that was recommended by Patten and is legislated for in the Act.
  The 2000 Act was, of course, debated at length in the previous Session. Although it was a highly contentious measure, the Opposition welcomed much of it, but there was also a great deal in it that concerned us or that we opposed—the name change; the scrapping of the cap badge; the inclusion on the Policing Board of former terrorists or the representatives of organisations that insisted on keeping their illegal weapons; and the district policing partnerships.
  The House will be relieved to know that now is not the time to go over that territory again, but as with the Northern Ireland Assembly (Elections) Order 2001, which we passed on Monday, it is important that the House understands why we are debating this order. Quite simply, despite all the painful changes to the Royal Ulster Constabulary that have been, or are in the process of being, made—changes that have led to alarmingly low levels of morale among the police—republicans and nationalists still refuse to give their support to the new policing arrangements. As such, they refuse to take up their entitlement to nominate members of the Policing Board—rightly or wrongly, the central element of democratic accountability over policing in Northern Ireland proposed in the Patten report.
  The nationalists' argument is that the legislation that we passed in the House last year does not faithfully implement the Patten report. That is a matter of debate. but I tend to agree with Dr. Maurice Hayes, who served on the Patten commission, that it is better to get 90 per cent. of something than 100 per cent. of nothing. Meanwhile, to the best of my knowledge, republicans have never even endorsed the Patten report—diluted or
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  not. Their attitude seems to be that the Patten report was just a starting point in a process that would lead to their vision of a disbanded RUC.
  The fact is that there was a good deal in the Patten report, or the legislation that followed, that none of us liked, but that is not an argument or an excuse for running away from our responsibilities to get behind the police and give them our backing in their efforts even-handedly and impartially to uphold the rule of law in extremely difficult circumstances. I cannot be alone in finding an inconsistency between politicians exercising ministerial functions in part of the United Kingdom, yet at the same time refusing to support the police.
  Far from softening their stance, however, nationalist and republican demands on policing have merely increased. Despite the Patten report and the legislation passed in the House last year, policing is now placed on a par with decommissioning and so-called demilitarisation as one of the outstanding issues to be resolved before the full implementation of the Belfast agreement. Well, I am sorry if I missed something, but I was under the impression that the issue had been resolved when the Police (Northern Ireland) Act 2000 became law last year. It seems that nothing will satisfy the republicans on the issue until the police have been left completely demoralised, gutted and unable to perform any effective function in Northern Ireland, while the whole paramilitary infrastructure is left untouched.
  Policing formed a central part of the discussions at Weston Park last week, and it will certainly be a key element in the paper that the British and Irish Governments present to the parties in the coming days. May I tell the Minister that the Conservative party continues to have the gravest reservations about giving any more ground on the issue in advance of the clearest evidence that the war really is over, that weapons are being put beyond use and that the structures of terrorism are being dismantled? In particular, we are greatly concerned about any new measure that will compromise the operational independence of the Chief Constable; that removes the bar on independent members with criminal convictions serving on the Policing Board and the DPPs; that allows the DPPs to raise 3p in the pound to spend on additional policing services; that would prematurely phase out the full-time reserve or reduce police numbers; and that would put constraints on the equipment currently available to the police to maintain order.
  In that context, we utterly reject the totally naive comments made yesterday by the chairman of the Human Rights Commission, who called for an end to the availability of plastic baton rounds. I ask for an assurance from the Minister that there can be no question of going down that route, which would put the lives of police officers seriously at risk.
  As we have seen in the past few days and weeks, politically motivated and carefully orchestrated violence from republicans and so-called loyalists continues to scar life in Northern Ireland. It is left to the men and women of the RUC to hold the line. Once again, we pay tribute to the bravery, skill and sheer professionalism of the RUC in serving the whole community in Northern Ireland and to the Chief Constable, Sir Ronnie Flanagan, as he seeks to guide the force through such difficult times.
  Recent violence in Belfast and elsewhere in Northern Ireland, in addition to the prevailing terrorist threat from dissidents or those organisations that have failed to

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  decommission, highlights once again why we need effective policing in Northern Ireland. We need policing based on common sense, rather than a set of politically correct soundbites. We need a police service in Northern Ireland that is able to get on with the job without any operational interference from politicians and that has the capacity to combat terrorism and the resources that it needs to do so. In short, we need the RUC and the RUC is entitled to the support of the House.
  4.6 pm
  Lembit Öpik: It is a matter of regret that article 2 of the order, which substitutes the Police Authority for Northern Ireland with the Policing Board, has been required at all. A year has passed since the Police (Northern Ireland) Act 2000 was introduced in the House, and it is disappointing that the board has not yet been set up.
  To be frank, by declaring that they will not take their seats on the Policing Board, the members of the Social Democratic and Labour party have effectively held up many of the reforms that they wanted. I would counsel the SDLP to think hard about its position in the hope that it might reconsider it. Having said that, given the decisions made by the Northern Ireland parties, the Government can do little else if they want to maintain the effective and regular policing activities necessary across the United Kingdom and, obviously, in the Province, too.
  I seek clarification of the circumstances of individual firearms training. I understand from what the Minister said that the arrangements under the order will bring police firearms training in Northern Ireland into line with the practice in the rest of the United Kingdom. I hope that she will confirm that that is the case in her concluding remarks. She spoke about whether Parliament should debate such orders, and it is very welcome that Parliament can now debate them. That is sensible and it will allow us to cover any outstanding issues.
  We shall reconvene three months from now—a long time in politics and a very long time in the politics of Northern Ireland, and who knows what progress may have been made by then. I hope that we really have reached the endgame. We have to take a couple of steps back from time to time as we move questionably forward in the politics of Northern Ireland and the search for stable peace.
  I remind the Minister of yesterday's exchange in the House on police funding. Without detaining the House too long, I remind her that the police are talking about the need for adequate resourcing. They estimate that there will be a shortfall of about £117 million in the money that they require to carry out fully the work expected of them in the Province. The Minister gave an assurance yesterday, and I hope that we shall spend more time discussing those issues than having to fall back on technical measures such as the order.
  As I look around the Chamber, I see seven of the finest Labour Members and six of the nicest Conservatives that one could hope to meet.
  Mr. John Taylor: Seven.
  Lembit Öpik: There are now seven, and it is only a matter of regret to me that the leadership campaign is not
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  being fought between the Conservative Members who are here. I also see five of the most enjoyable and pleasant Northern Ireland politicians.
  Mr. Eric Forth: Will the hon. Gentleman give way?
  Lembit Öpik: I shall give way to one of the finest Conservatives that one could hope to meet.
  Mr. Forth: I am grateful to the hon. Gentleman and I agree with him. To complete the picture, how many Liberal Democrats does he see as he looks around the Chamber?
  Lembit Öpik: We save the very best for these debates. I should clarify that my comments were about the right hon. Gentleman's personality not his sartorial elegance. [Interruption.] I am talking about his tie.
  Considering the fine quality of politicians present, I hope that common sense will prevail and we shall not be driven to a Division. Such technical orders are an indication of the fact that there is still delay in Northern Ireland politics, as the hon. Member for Solihull (Mr. Taylor) said. There are individuals who could have prevented this order from being required. More to the point, there are those who have it in their capacity to deliver the outstanding issues in the Good Friday agreement.
  No amount of technical discussion in this Chamber about police orders such as this will ultimately deliver the long-standing stability that we seek. I hope that we shall not have to make such coarse corrections too often on the way to such stability. I hope that people in Northern Ireland will recognise that the order puts more pressure on those who can deliver what they must in the Province to do so.
  4.11 pm
  Lady Hermon: I apologise to Members, and particularly to the Minister, for not being present when the debate began. That was because the Police Federation for Northern Ireland has been in touch with me about the order, especially the pensions regulations. I shall mention those to the Minister later.
  I am grateful for the opportunity to speak on this order, which amends the Police (Northern Ireland) Act 2000. As that Act implemented many of what we regard as the deeply flawed recommendations of the Patten report, it comes as no surprise to see it amended so soon. I remind the House that the Patten commission was given terms of reference under the Belfast agreement. The very first paragraph of those terms of reference urged the commissioners to come up with
  "proposals for future policing structures and arrangements, including means of encouraging widespread community support for these arrangements."
  However, and most regrettably, instead of encouraging such essential widespread community support, the Patten commission has managed to discourage it. The order,

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  albeit a short one, serves to highlight two aspects of the Patten report that have greatly alienated Unionist support for police reform in Northern Ireland.
  Mr. John Taylor: Does the hon. Lady agree that the Patten report was an attempt at a vision of policing in Northern Ireland on the far side of the total fulfilment of the Belfast agreement?
  Lady Hermon: It would have been greatly appreciated had the Patten commission endeavoured to encourage widespread community support. Elements of the report have had completely the opposite effect.
  The first aspect of the order to which I shall turn my attention is that concerning new police trainees. When I first read the Patten report, I was most impressed by its emphasis on human rights. However, that initial favourable impression quickly vanished. The Patten commission stated that a human rights based approach should be at the very core of the report. That was a welcome initiative. Despite that aim, new police recruits will be selected on the basis of their religion.
  Since religious liberty and freedom from all forms of discrimination are basic essential human rights, it is totally repugnant that trainees will be selected on the basis of their religion. It will be enormously damaging to good Catholic recruits undergoing the procedure. They will be chosen on merit, but unfortunately, it will be implied that they have been selected on the ground of religion. That is very sad and will be damaging to them in the long run. I dislike reverse discrimination and religious discrimination enormously, and I am deeply concerned for the new trainees.
  I also remind the House that in its third report of 1997–98, the Northern Ireland Affairs Committee noted that
  "the major reason preventing young Roman Catholics coming forward to join the RUC is the fear of violence which would be offered towards them and to members of their family."
  I therefore urge the Minister and her colleagues to ensure that effective measures are quickly implemented to bring an end to the vicious intimidation of young Catholics.
  It is also essential that the Government ensure that the Gaelic Athletic Association repeals its offensive and discriminatory rule 21. That was recommended in the Patten report. The Government want full implementation of the Patten report, so will the Minister assure us that they will ensure that that discriminatory rule is abolished?
  The Patten report also recommended a new purpose-built training college. The police recruits whom we are talking about have been given an extension for firearms training. All recruits need good, new training facilities and I would like the Government to commit themselves to such provision. There are rumours that the former Maze prison would be a good site for a college. I suggest that that recommendation be completely ignored. It would not be good for morale or anything else to put new police recruits on such a site.
  The order makes provision for the Police Authority to carry on in the absence of the new Policing Board. The Patten commission recommended that politics be taken out of policing. Chris Patten said that he wanted "the depoliticisation of policing" in Northern Ireland, but the
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  recipe that he suggested is not a sensible way of achieving that. He recommended a new Policing Board of 19 members, 10 of whom would be politicians—Assembly Members chosen on the same basis as their representation on the Assembly Executive. Consequently, we have given—I hope inadvertently, but it looks deliberate—a huge lever to Sinn Fein and the SDLP to extract even more concessions on police reform. No more concessions can be made on police reform without discouraging the essential widespread support that we need for it to occur.
  The matters brought to my attention this afternoon by the Police Federation are serious, and I should like the Minister to address them in her winding-up speech if she can. During the 26 weeks of their training, the trainees will be a new breed of police officer in the United Kingdom. They will not be covered by the pension regulations that apply to other police recruits. So if officers who currently serve in the Metropolitan police or other English or Scottish police forces, for example, transfer to the new policing service, there will be no continuity of pension rights or any other benefits. That is a huge loophole. The trainees' pay has not been negotiated, either.
  I am sorry to mention this, but when the training centre was in Enniskillen, it was bombed; if any trainees are injured, or worse still, murdered during their 26-week training, according to present arrangements, their families and relatives will not benefit under pension regulations. That issue was raised specifically by the Police Federation and needs urgent attention; I should be grateful if the Minister would comment at the end of our debate, if she can do so at such short notice.
  4.20 pm
  Mr. Gregory Campbell: The proposed Policing Board will experience the same problems that the Police Authority for Northern Ireland has experienced for many years. Many people in Northern Ireland did not give their full undiluted support to the authority. In fact, members of the republican community campaigned against those who would serve on the authority; they picketed their homes and subjected them to attack, both physical and verbal.
  Unfortunately, the political representatives of many people in the republican community were associated with the criminal gangs who attacked members of the authority. People in the nationalist community, including members of the SDLP, would not support the authority, and there were many attempts by previous Governments to get members of the SDLP to give their support to the authority, and, indeed, to join it. There were consistent and prolonged campaigns to try to encourage greater nationalist involvement in the authority.
  Unfortunately, the same effort was not expended in trying to get members of my community—those in the Democratic Unionist party—to join the authority. In fact, our many entreaties to previous Secretaries of State for Northern Ireland seem to have fallen on deaf ears. We were promised that if a position were to become available, a member of the DUP would be looked on favourably, given that other political parties seemed to have several nominees on the authority. In fact, some minute political parties, with no more than 2 per cent. support in Northern Ireland, seemed to have nominees serving on the authority.

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  Moving on to the problems that will be encountered now and in future, it appears that the greater the efforts of the Royal Ulster Constabulary to combat crime, the greater the support given by the community to assist, and the more successful that that all is, the greater the intensity of opposition to the RUC in sections of the republican community. Of course, like the hon. Member for Solihull (Mr. Taylor), I do not want to go back to the Police (Northern Ireland) Act 2000 and its provisions on insignia and symbols; that created many difficulties in the Unionist community and continues to do so.
  The Policing Board will face problems, particularly in relation to 50:50 recruitment. Any recruitment in Northern Ireland that operates according to a quota will be attacked and criticised because the community will infer that people are being selected for service in the police according to their religious denomination rather than on merit and their ability to do the job. That will always create a problem. It should be remembered that in 1920, when the RUC was formed, 20 per cent. of its members were Roman Catholic. That figure diminished in the following decades because of a campaign of intimidation and, latterly in the 1970s and 1980s, a campaign of murder.
  We are now faced with an unsatisfactory 50:50 quota arrangement to try to redress the unacceptably low number of Roman Catholics in the RUC. However, we must accept the rationale behind our present position: it is because of intimidation that only 8 per cent. of RUC police officers are Roman Catholic. It is not because Catholics are not acceptable in the RUC; they are. Last week, on television and in our newspapers, there were pictures of a fine woman police constable who faced up to a mob in Belfast and helped to save the life of a male colleague. She was a Roman Catholic.
  Many constables, both male and female, Protestant and Catholic, have been attacked, and have been subject to attack, for many years in Northern Ireland. The Government and every Member of Parliament ought to give the police force total support. We want an excellent police service to be made even better. My community has problems with the proposed Policing Board because we do not believe that the essential elements for improving a good police service are present.
  There will be other problems with the district policing partnerships. We see grave difficulties concerning possible participation by former terrorists in those partnerships, which will pose exceptionally grave difficulties for members of my community, and will only make the task of the police service in the wider community more difficult, rather than easier.
  I shall close with an appeal to the Minister and the Government for greater resources for the RUC, an excellent police service which we should all strive to make better, more independent and more accountable to the people of Northern Ireland. Rather than attack and criticise the RUC or make life more difficult for them, we should try to improve what is already an exceptionally fine police service in Northern Ireland.
  4.27 pm
  Mr. Nigel Dodds: It is a pleasure to follow my hon. Friend the Member for East Londonderry (Mr. Campbell). I endorse entirely his remarks on the quality of the Royal Ulster Constabulary. As someone
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  who has witnessed at first hand in my constituency the vilest attacks on members of the police force, made as part of an orchestrated plan of violence by republicans, as the Chief Constable himself admitted last week, I believe that everyone in the House should pay tribute to the gallantry and bravery of members of the RUC and the work that they attempt to do protecting decent law-abiding people on all sides of the community.
  One thing that has undermined morale at all levels of the RUC is the prospect that the Northern Ireland Policing Board, established under the Police (Northern Ireland) Act 2000, will, according to the Patten report and the Belfast agreement, comprise members of Sinn Fein-IRA. Many members of the RUC tell me and other elected representatives that when they stand on the front line trying to protect the community, they see members of the republican movement orchestrating violence, yet, in a short while, they could face the prospect of political representatives of that organisation serving on the Policing Board. For them, that is another reason for lack of confidence about the future and a growing concern about morale in the force.
  I note that this is the second time that we have had to deal in the House with legislation relating to the fact that there are problems with the Belfast agreement. Last Monday, we debated elections to the Northern Ireland Assembly. We are approaching 12 August and the six-week period for the election of a First Minister and Deputy First Minister is about to run out, so the Government had to come to the House to rush legislation through to deal with that. We are now dealing with another problem, to do with policing.
  If the House were sitting after tomorrow, we would probably deal with other aspects of the agreement too, but all this proves that the agreement is not working as far as the people in Northern Ireland are concerned. Why is it not working? It is because—hon. Members may not like to hear it—the agreement has the support of virtually 100 per cent. of nationalists and republicans, but not of a majority of the Unionist community. That applies to the broad thrust of the agreement and policing reforms, which are a major part of the Belfast agreement and Patten report.
  The Patten report flows inexorably and inevitably from the Belfast agreement. There are attempts among some people inside and outside the House to say that the Patten report took those who supported the agreement by surprise. The reality is that the terms and remit of Patten were set out in the Belfast agreement. Those of us who predicted that the commission set up to look at policing under the agreement would come up with the sort of proposals that Patten did, indeed, come up with were pooh-poohed and told that we were scaremongering. Our position has been vindicated.
  Lembit Öpik: I understand that the Democratic Unionist party is not happy with the agreement as it stands. I should be grateful if the hon. Gentleman could briefly summarise the alternative agreement that he believes would command the support of all sides of the community.
  Mr. Dodds: I am grateful that someone from one of the major parties in the House is prepared to ask that question. It seems that the Government are not interested

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  in asking what the alternative is. They were not even prepared to invite the Democratic Unionist party and like-minded Unionists who represent the majority of Unionists in the Province to come to discuss an alternative, so I am glad that the hon. Gentleman is showing an openness of mind and a willingness to listen.
  We are saying clearly that we must find a way forward in Northern Ireland, based on the consent and agreement of both communities in Northern Ireland—not just nationalists but Unionists. We are prepared to sit down and play our part in trying to find a way forward, but it is clear from the remarks of the Secretary of State for Northern Ireland that at present he has a closed mind on that. That was witnessed by the fact that other parties were invited to the talks at Weston Park. The Democratic Unionist party has not been invited to take part in any discussions about an alternative way forward in Northern Ireland—so much for democracy.
  To return to the order, as hon. Members have said, there is a crisis of morale among the membership of the Royal Ulster Constabulary. The order adds to the uncertainty about the future of the force and what will happen. There is a question mark about what will happen to the name, the emblems and badges of the RUC.
  What will happen come 1 September? What will happen over the coming months if the agreement is suspended? What will happen to the name of the Royal Ulster Constabulary? What will happen on the issues of the emblems, badges and so on? It would be useful to hear from the Minister what the position is in relation to that particular aspect of the police legislation.
  Lembit Öpik: I am sorry to detain the House further. I am pleased that the hon. Member feels that I am listening. I am receptive to views from all parties. Having accepted that, can he briefly summarise which proposals would have been put forward by the DUP to prevent us having to discuss the order today?
  Mr. Dodds: Again, I am delighted. Our party will be happy to discuss with the hon. Gentleman and other constitutional democratic politicians at any time our proposals on those and a range of other issues, but there is widespread support within the community in Northern Ireland for the Royal Ulster Constabulary as it stands at present. Surveys that have been independently carried out show that the main reason why members of the minority community, the Roman Catholic community, were not joining the RUC was not concern about emblems, badges, names or anything else but fear of intimidation, threats and violence against them and their families. In the last year before the first ceasefire was called by the IRA, almost 25 per cent. of all applicants to the RUC were Roman Catholics. That is an indication of the widespread acceptance of the force.
  The reality is that Patten has got it wrong. The police legislation is not endorsed by the vast majority of the people in Northern Ireland. People look, for example, at the issue of police numbers. As has been pointed out, the police are on the streets virtually every night in Belfast and other parts of the Province keeping the peace and maintaining law and order. What is Patten proposing on police numbers? He is proposing that numbers should be
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  reduced from 13,000 to 7,500. That proposal has been accepted by Her Majesty's Government and is being implemented, even though we still have a crisis in terms of security, even though we have had some of the worst community violence for many years, even though so-called dissidents still pose a grave threat, in the words of the Chief Constable, to security and peace in Northern Ireland and even though the provisional IRA is still fully armed and intact. The proposal, however, is to reduce the number of police in Northern Ireland.
  Rightly, in England, Scotland and Wales, both the major parties are vying with each other as to who can be the most macho in terms of the police and put more policemen and women on the beat. People in Northern Ireland are simply saying, "Why is it that in Northern Ireland for political expediency police numbers will be reduced?" I plead with the Minister and with hon. Members to have a bit of common sense on policing issues and to respond to what ordinary people on the ground are saying. Keep our police force, keep the Royal Ulster Constabulary and let us move forward, increasing the operational capacity of the police to deal with the problems that we have. The Government should not continue with political tinkering for the sake of appeasing IRA-Sinn Fein.
  As the hon. Member for Solihull (Mr. Taylor) rightly said, many of us believe that Sinn Fein republicans will never be satisfied on the issue anyway. No matter what is done to reform the police, they will still come back for more. It is a disgrace that the police should be used as part of a bartering process.
  Some told us that decommissioning would be the only issue on the agenda at Weston Park. Far from it—it is clear that policing, so-called demilitarisation and keeping the institutions in place were very much part of the agenda. People in Northern Ireland are already deeply concerned about the concessions that have been given on policing. If the Government come back and tell the people of Northern Ireland as part of their package of proposals—incidentally, they have told us that we are not even going to see that, even though we have five hon. Members in the House—that in exchange for another fudge on decommissioning more concessions will be given on policing, that will be resisted very strongly indeed.
  4.38 pm
  John McDonnell: I will be brief, Mr. Deputy Speaker. I know that you have given us a great deal of leeway in the debate on this narrow order and I understand why. Some pertinent points have been made beyond the scope of the order, including the point that was made by the hon. Member for North Down (Lady Hermon) about pensions and compensation, which needs to be dealt with urgently.
  The order represents further acceptance, I suppose, that the political process is failing again. The process started with the Good Friday agreement. We had a lengthy debate on the Police (Northern Ireland) Act 2000, but we failed to reach 75 per cent. of the amendments that were tabled to it. A thorough debate on them might have led to greater understanding and could perhaps have obviated the need for today's predicament.
  The order has been presented almost as an emergency measure because of the failure of the political process to resolve matters. It suggests a slide into crisis for the

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  six counties. I fear that our last hope is the package that the Taoiseach and the Prime Minister will produce. It is important that all hon. Members, representing all perspectives, receive information on it. Although the House will be in recess, members of the Select Committee on Northern Ireland Affairs and other hon. Members who have consistently taken an interest in Northern Ireland would readily be brought together to discuss the package in detail, use our best offices in the dialogue about it, and perhaps pursue some of its measures to resolve the problems that arise from the gradual erosion of some of the principles of the Belfast agreement.
  We face a three-month recess, and the position could become very dangerous in August and September. We could almost drift into war-like circumstances. If that happens, the House should be recalled for a full debate on the matter. The general populace on this side of the Irish sea do not understand the seriousness of the situation, and it behoves us to come together in August and September to discuss the matter if the package proposed by the Taoiseach and the Prime Minister does not resolve the problem of implementing and furthering the Belfast agreement and if the political dispensation that the Good Friday agreement created breaks down. My hon. Friend the Minister should consider that and raise it with the Leader of the House to ascertain the measures that can be put in place to effect that.
  4.42 pm
  Mr. Peter Robinson: There may not be many occasions when I can happily follow the hon. Member for Hayes and Harlington (John McDonnell), but I concur at least with his last point. The Leader of the House and his colleagues should seriously consider recalling Parliament to discuss the package that is being drawn up by the Prime Minister and the Prime Minister of the Republic of Ireland, especially if it includes a requirement to suspend the Northern Ireland Assembly. Hon. Members may wish to comment on that.
  The order is a monument to the intransigence of nationalists and republicans and evidence of the Government's inability to move without their consent. That clearly shows that there is a nationalist veto, although the Government are always happy to go ahead without the support of the Democratic Unionist party, which speaks for the overwhelming majority of the Unionist community on the issues that we are discussing.
  My view is different from that of the hon. Member for North Down (Lady Hermon). I believe that the Patten recommendations were in line with the remit that the Belfast agreement gave the commission. It is clear from the detailed terms of reference in the Belfast agreement that the commission was asked to devise proposals on composition, recruitment, training, culture, ethos and symbols. The only restriction was that the outcome should enjoy widespread support from the whole community and the police service should be perceived as an integral part of it.
  I challenged the hon. Member for North Down to say whether she was prepared to support the new police service. Both of us were called to order because we were straying wide of the subject of the debate. Of course, the answer is yes. Even though the hon. Lady does not like much of the Patten report, as an elected representative who supports law and order she could do no other than
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  say that she supported the new police service despite her anxieties about the way in which it was set up and some of the changes.
  The Patten report has therefore fulfilled the recommendations of the Good Friday agreement because the police force enjoys the support of the community. Even from my point of view, I have to say that people should support the police service, no matter how it is set up. That is the responsible position.
  Lady Hermon: Does the hon. Gentleman remember that, on 9 September 1999, the day on which the Patten report was published, the Police Federation issued a public statement, which is in the public domain? The federation said that it was
  "happy to welcome much that is in the Patten Report."
  Does the hon. Gentleman wish to comment on that?
  Mr. Robinson: The hon. Lady knows that any report that contains hundreds of recommendations is bound to include something good. It would be a terrible travesty if not one of the recommendations was in the interests of the police service. I am content with the commission's recommendations on training and the new IT equipment. They are good for policing in Northern Ireland, but we must make a balanced judgment on the recommendations as a whole.
  As the right hon. Member for Upper Bann (Mr. Trimble) said, as a whole the Patten report was "a shoddy job". The hon. Member for North Down recalls the view of the Police Federation clearly; I am therefore surprised that she cannot remember that of her party leader. The Belfast agreement gave the Patten commission a specific remit. The right hon. Member for Upper Bann did a shoddy job in agreeing to a remit that allowed Patten and his team to introduce such proposals.
  The order reveals something further. It shows that although the Patten proposals and the Police (Northern Ireland) Act 2000 made major concessions to nationalism, at the expense of good policing in Northern Ireland, nationalists are still not satisfied. Gaining 90 per cent. or even 99 per cent. of what they want is not enough. They will hold out until they get it all. Nationalists are not prepared to sit on the Policing Board and therefore the order has been introduced to allow the Government more time and the opportunity to make further concessions at the expense of policing.
  The bottom line for ordinary citizens in Northern Ireland is an inferior police service because of Patten and concessions that the Government have yet to make. For example, we are told that the Government will consider whether all police officers, even existing members, should have to take the oath. I remember the Secretary of State telling us that we were not talking about the RUC being disbanded but about policing reforms and a moving on for the police service in Northern Ireland. There could be no clearer signal to policemen in Northern Ireland that the RUC is being disbanded than that they be required to re-take their oath of allegiance. That would be a clear signal to them that a line had been drawn under their past life in the Royal Ulster Constabulary and that a fresh and new start was being made with a new police service.
  I hope that the Minister will address that issue, as it is causing major concern in Northern Ireland's police ranks. It would be greatly beneficial to policemen and

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  policewomen in Northern Ireland if she could scotch that rumour, which started at the Northern Ireland Office, and say that they will definitely not be asked to re-take the oath to which they attested when they went into the job initially. That should certainly not be another concession to Sinn Fein-IRA.
  Like the hon. Member for South Antrim (David Burnside), I tabled a question for oral answer on the future of the full-time RUC reserve, to which I am sure both the hon. Gentleman and I have both received a written answer. In reading that answer, I was very concerned that the clear inference was that there is no turning back on the Government's position on the full-time reserve and that they still intend to wipe it out. That message also will cause real concern in the RUC.
  At this very moment in Northern Ireland, full-time RUC reserve men and women are out there protecting our society. Recently, many of them have been injured, in north Belfast, in east Belfast and elsewhere. They are prepared to put themselves on the line without knowing what their future will be. I really think that the Government have to stand by those men and women in the full-time reserve. I have spoken to the Chief Constable, and he recognises the very real contribution that they have to make to policing in Northern Ireland. They are an essential part of the police service in Northern Ireland, and the Government should not have them destroyed on the altar of political expediency.
  I should like finally to address the issue of the police authority itself. The Secretary of State is required by law to appoint, so far as he can, a police authority that is representative of the community as a whole. That is a legal requirement on the Secretary of State. Repeatedly, however, he has refused to appoint members of the Ulster Democratic Unionist party despite the fact that they belong to one of the four major parties in Northern Ireland. He has appointed representatives of the Alliance party—the 2 per cent. party in Northern Ireland—to the authority, but he has excluded from it a party that is able to obtain 22 per cent. of the vote in Northern Ireland.
  Those people are willing to serve their community on the Police Authority for Northern Ireland, with all the risks that that entails in a society such as Northern Ireland, but the Secretary of State is not prepared to appoint them because they do not share his political views. That is contrary to the legal requirement that has been placed on him. If for a further time we remain with the Police Authority for Northern Ireland rather than going to the Policing Board, as envisaged in the recently passed Police (Northern Ireland) Act 2000, there will remain on the Secretary of State for Northern Ireland a duty to ensure that that board is representative of the community as a whole. He cannot fulfil that legal duty unless he appoints representatives from the Democratic Unionist party to the board.
  4.52 pm
  David Burnside: Following the remarks of the hon. Member for Belfast, East (Mr. Robinson), may I ask the Minister to comment on the position of the Royal Ulster Constabulary's full-time and, potentially, part-time reserve? Currently, 43 per cent. of constables in west Belfast are full-time reserves, and
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  25 per cent. of mobile support units in Northern Ireland are full-time reserves. Surely it is a dereliction of duty for the Government to wind down the full-time reserve and the RUC's operational capability at a time when the Provisional IRA—I stress the Provisional IRA, not Real or Continuity IRA—is engaged in procuring arms from continental Europe and the United States of America to re-arm. As the Minister should know, the IRA army council includes Gerry Adams, president of Sinn Fein; Martin McGuinness, current Minister of Education at the devolved Administration at Stormont; and Pat Doherty. They are procuring arms illegally from continental Europe. How can the Minister preside over the running down of the Royal Ulster Constabulary's manpower and its reserve when crime and the threat of terrorism are increasing? I ask for the Minister's reply.
  4.54 pm
  Mr. Eric Forth: It is interesting to ponder just for a moment the provenance of this order. The Minister slightly glossed over why the order is here and where it came from. There are some clues, of course, even in the instrument itself. It says:
  "Whereas it has been made to appear to Her Majesty that by reason of urgency this Order requires to be made without a draft having been approved by resolution of each House of Parliament."
  So there was some urgency, and we have been given a hint as to why. It states on the Order Paper that the motion has not yet been considered by the Joint Committee on Statutory Instruments.
  Jane Kennedy: I am grateful to the right hon. Gentleman for giving way. The motion was considered by the Joint Committee on Statutory Instruments this morning; I am grateful to its members for calling an extraordinary meeting.
  Mr. Forth: That is extremely helpful. It shows how flexible the House is that even between the printing of the Order Paper and today's debate we can have such an immediate response from the Joint Committee, which no doubt deliberated seriously and considered the matter closely. That leads one to ponder what scope there is for the House, either in full session, as we are now, or through the medium of the Joint Committee, for example, to consider an instrument of this kind given that it has emanated from no less a source than the Court at Buckingham palace.
  We must not take our constitutional role in any way for granted. I shall leave aside for the moment, as you would not want me to digress, Mr. Deputy Speaker, whether we might some day consider how far the House has any proper role to play in matters such as this. Northern Ireland is obviously a serious and sensitive subject and matters such as this, which the Government consider to be urgent, cannot be treated lightly—nor can Orders in Council emanating from the Court at Buckingham palace be dealt with lightly.
  Having said that, and given the speedy response of the Joint Committee and the fact that we are now considering the matter, one is left wondering just what scope there is for proper consideration or indeed flexibility. Although the Minister, quite properly, made some little play on the fact that the Government's generosity was allowing us the affirmative resolution procedure, you know, Mr. Deputy

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  Speaker, I know and everyone here knows that although those procedures look as though they are providing an opportunity for parliamentary scrutiny, they cannot be amended, so they are basically a take it or leave it job. I shall not use this opportunity to complain about that, except to note that we are left without the powers that the House of Commons would normally expect to have.
  Presumably, when the Joint Committee sat in all solemnity this very morning and gave the matter its consideration, it was in the same difficult position. Perhaps some day we might return to this lacuna in our procedures.
  I ask the Minister for some guidance. I am being tentative because I have rarely if ever sought to involve myself in Northern Ireland matters: I am conscious of the fact that those of us who have an imperfect understanding of such matters tread on the ground at our peril. However, I was slightly worried by the exemption of the need to issue individual firearms certificates to trainee police officers.
  If I understood the Minister correctly when she said, very properly but rather briefly, that the measure would be of practical value and would bring the Northern Ireland force into line with those on the mainland, I was left wondering whether the argument was that trainee police officers would have no requirement to, and would not even be allowed to, use firearms during their training, or whether it was deemed acceptable that the safeguard of issuing individual firearms certificates and all that goes with it was now to be put to one side and a bulk certificate issued.
  As a lay person in these matters, that would give me pause for thought, given the sensitivities about firearms generally. Tragically, there have been recent incidents involving the use of firearms by the police, so our mind should be concentrated on the issue, be it in Northern Ireland or on the mainland. Any measure to alter the arrangements for giving police trainees access to firearms should be considered very carefully.
  Are we saying that police trainees are not required to be trained in the use of firearms, or that the existing safeguard of issuing individual licences is no longer necessary? That would worry me, because there must have been a long-standing presumption, which I share, that we should do everything that we can to be satisfied of the suitability of an individual to have access to a firearm, even in the context of all the disciplines of police training.
  I am all in favour of proper measures to make all our police forces as effective as possible, but given the current environment, not only in Northern Ireland but here in London, and the anxieties that have arisen in the light of recent events, we should all show even greater sensitivity than usual.
  I am sure that the motion will be approved, but we must not allow such procedures to happen too often. I would not want the Government to think that all they need to do is to come up with something that emanates from Buckingham palace, say how important it is, convene a meeting of the Joint Committee, have it nodded through and then put it before the House the day before we leave for the summer recess, reassuring Members that everything had been done properly.
  Everything may have been done properly in a strict technical sense, and I am sure that the Minister is about to reassure us in her usual silken way that all is well and
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  that we can go off on the recess without giving it another thought, but I want to put down a marker to say that this should not happen too often. We should not feel that this can become standard procedure. Let us always be aware that matters of such sensitivity and importance must be properly scrutinised.
  In the normal course of events, I hope that such a measure would be allowed more time and that the plea of urgency would never be used to evade proper scrutiny. The presence of the Secretary of State and the Minister, with all their integrity, reassures me that that is not the case, but I want to make the point that this should be treated as an exception, not a rule.
  5.3 pm
  Mr. Jeffrey M. Donaldson: I apologise for not having been here for the opening speeches, because of the collapse of the earlier debate.
  We are having this debate because the Government are unable to proceed in establishing the new Policing Board, the nationalist parties, and the SDLP in particular, having failed to give the board their support. It is interesting that none of the SDLP's representatives is here to explain why the SDLP is not prepared to support it.
  It is fairly clear to observers of such matters that the SDLP has not yet obtained enough concessions from the Government on policing to bring it to the point where it is prepared to support the board. That is most unfortunate, because we need all the political parties in Northern Ireland that have signed up to the democratic process to support the forces of law and order. It is regrettable that one side of the community has so far refused to support policing structures designed specifically to win its support.
  Unionists have encountered many difficulties with the proposals on policing that emanated from the Patten report, as the Secretary of State knows. The Government need to be careful if they are minded to make further concessions to the nationalist community, and especially to the SDLP, to win its support for the new policing arrangements and for the membership of the new Policing Board. The effect of those concessions could be to undermine further the Unionist community's confidence in the new policing structures and arrangements so that we would find it difficult to embrace the changes. We already have significant difficulties, as the Secretary of State will be aware.
  The uncertainty that arises from the refusal of the SDLP to back the new policing arrangements has had an enormous impact on the RUC's morale. Every day, my colleagues and I receive correspondence and telephone calls from police officers who see their position constantly being undermined. In particular, the full-time reserve members do not know what their future is. They hear rumours and read stories in the newspapers, but their future is being negotiated behind their backs, in secret.
  I met the Chief Constable earlier this week. He told me that because of the pressures on his resources he cannot do without the full-time reserve. If we took the full-time reserve out of the equation in the near future, as the SDLP would like, the police could not cope with the present unrest in Northern Ireland, the increasing crime on our streets and the remaining terrorist threat posed by all the paramilitary organisations. I urge the Secretary of State, when he considers how he can win the support of the

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  SDLP for the policing arrangements and the new Policing Board, to be careful not to leave the Chief Constable without the resources to respond to the security threat and the levels of violence on the streets. In that respect, we need the full-time reserve and officers on the streets. My colleagues and I find that the police are unable to cope with the level of crime.
  Patrick Mercer: Surely the most eloquent argument on police numbers is that when there has been a flash of violence, of any size or type, in the constituency of the hon. Member for Belfast, North (Mr. Dodds), the RUC has had to be reinforced with soldiers from the British Army. To my certain knowledge, a policy has been in place in Ulster for the past 10 years for the British Army to step further and further back and for the RUC to move forward. If troops are deployed almost at the first sign of serious violence, it suggests that police numbers are woefully inadequate.
  Mr. Donaldson: The hon. Gentleman is right, and during the talks last week I asked SDLP members whether they wanted the Parachute Regiment drafted into Ardoyne to deal with the riots. More than 100 police officers were injured, some of them seriously, in the riots in Ardoyne. In an earlier riot on the Garvaghy road in Portadown, more than 50 officers were seriously injured. Those injuries occurred because officers were in close-quarters contact with rioters. The rioters were able to get up close to the officers and inflict serious injury. That happened because of the concern in the police command structure that if they fired plastic bullets early in a riot, the police ombudsman would be on their case.
  Plastic bullets are being fired only as a last resort, and after many officers have been seriously injured. That needs to be looked at carefully by the Police Authority for Northern Ireland. I and my colleagues reject yesterday's unrealistic call from the chief commissioner of the Northern Ireland Human Rights Commission for the withdrawal of plastic bullets. Police officers must be able to defend themselves and the communities that they serve from horrific attacks. Plastic bullets are important in that respect.
  I was pleased with what the Chief Constable said yesterday. I hope that the Secretary of State will back up the RUC in regard to the need to retain plastic bullets. I wish that we did not have riots in which plastic bullets had to be deployed, but we have, and the Secretary of State must resist calls to withdraw those bullets from use.
  The Secretary of State must resist the other, unreasonable demands made by nationalists for further reductions in police numbers, especially in the full-time reserve. We need those police officers on the streets of Northern Ireland to deal with crime and riots. They need our support. The present uncertainty must be brought to an end.
  I hope that the Secretary of State will put the needs and security of the people of Northern Ireland before political expediency, and that he will not make concessions—to the SDLP and others—that would undermine the RUC's operational capacity to provide effective policing on the streets of Northern Ireland. That is crucial.
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  In addition, I hope that the Secretary of State will not make concessions at this critical time: to do so would further undermine the morale of the RUC and the confidence in the policing arrangements that is felt by people in the Unionist community.
  My party supports the forces of law and order, but we are very concerned about what is happening. The issue of illegal arms held by terrorist organisations is crucial, and we want it to be resolved, but the issue of policing is equally important to us. We will watch carefully to see what the Government do. The Secretary of State should not expect for one moment that we will simply roll over and accept whatever arrangements and concessions he makes with regard to the SDLP and others.
  5.12 pm
  Jane Kennedy: First, I should like to address some comments to the Joint Committee on Statutory Instruments. I am very grateful to the hon. Member for Bosworth (Mr. Tredinnick) and to the Opposition, who agreed to the meeting that took place this morning, and who allowed us to have this debate.
  The process is already well under way to bring the first new trainees into the police service this autumn. The Police (Northern Ireland) Act 2000 provides for their terms and conditions to be set out in regulations. It also provides for the Policing Board to be consulted on the regulations. I understand why some hon. Members missed my opening remarks, but I said then that the board will not be in place in sufficient time for the necessary consultation to take place. The order amends the 2000 Act to enable the Police Authority for Northern Ireland to fulfil the consultation role and any of the board's functions under the regulations until the board is established.
  In addition, the order provides for trainees to receive firearms training without the administrative burden of issuing them, individually, with firearms certificates. The hon. Member for Montgomeryshire (Lembit Öpik) and the right hon. Member for Bromley and Chislehurst (Mr. Forth) both asked serious questions about these issues.
  The hon. Member for Montgomeryshire made a speech—the elegance of which was second only to the sartorial elegance displayed by the right hon. Member for Bromley and Chislehurst—in which he asked whether the order would bring the training of police officers in Northern Ireland into line with training in England and Wales. I can tell him that police trainees in forces in Great Britain are also exempt from the need to have firearms certificates.
  Mr. Forth: Is it sufficient simply to say that, because something is done on the mainland, it is okay for Northern Ireland? I ask that in the obvious context that, although Northern Ireland is rightly an integral part of the United Kingdom, we all recognise that conditions there vary in many crucial ways, as the Minister knows better than me. I ask also in light of the recent incidents involving the police and firearms. Against that background, are the Minister and Secretary of State happy that this is the time to do away with an administrative burden that may provide safeguards of the kind that people want?
  Jane Kennedy: Let me try to reassure the right hon. Gentleman. Police trainees will not be issued with a

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  service firearm until they have been trained in its safe handling and use, including public safety aspects. The recruitment process is such that suitability is tested in terms of firearms and all other aspects of policing. I take a great interest in this matter, given the tragic shooting in my constituency last Thursday night.
  Lembit Öpik: Will the Minister confirm whether the arrangements are actually changing in Northern Ireland?
  Jane Kennedy: The current arrangements will continue.
  A number of arguments have been advanced. The order is concerned with the provisions on 50:50 recruitment and the regulations on flags and emblems, which have to be laid in Parliament before they take effect. I knew that this matter was bound to raise many of the questions that were debated at length in the House during the passage of the Police (Northern Ireland) Act 2000.
  The hon. Member for North Down (Lady Hermon) asked about the Police Federation's concerns about pension and other arrangements. These concerns are being addressed and discussions are on-going. We are listening carefully to the representations of the federation.
  Members have referred to 50:50 recruitment. Undoubtedly, intimidation is an important factor. We all want it to end immediately and we condemn it unreservedly, but there are other factors. They include, for example, a lack of identity with the RUC; a fear of loss of contact with family, friends and community; and a lack of encouragement from community leaders, which also plays a part. The Government urge all political, religious and community bodies to remove barriers to those wishing to join the police. It is important to remember and place on record that only 8 per cent. of the current police force is drawn from the Catholic community.
  Mr. Donaldson: Why?
  Jane Kennedy: I have explained some of the factors that affect recruitment. There has been a good cross-community response to recruitment to the Police Service of Northern Ireland under the new 50:50 provisions. I am not ideologically opposed to such provisions. In fact, I believe that, on occasion, it is necessary actively to seek to recruit from sections of the community that are not otherwise represented, particularly in such an important public service as the police.
  The Government aim to develop a modern police service that is both effective and representative of the community that it serves, and commands the widespread confidence and support that it needs to be able to operate properly. Members made the point that the community within which the police will operate must support police officers in carrying out their duties. It is in the interests of the people of Northern Ireland and the police service to have that representative service in place.
  The hon. Members for Solihull (Mr. Taylor) and for Belfast, North (Mr. Dodds) and others referred to the talks and to policing. I restate the Government's position.
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  We are committed to implementing the Patten report and we are always prepared to consider matters when parties argue that we have not done enough.
  Mr. John Taylor: I repeat a question that I asked the Minister earlier. Is it not the case that the Patten report was a prescription for policing in Northern Ireland once all aspects of the Belfast agreement had been fulfilled?
  Jane Kennedy: No, I do not accept that. The Chief Constable of Northern Ireland himself said that the vast bulk of the Patten recommendations were about "good and effective policing." The Government and the police are keen to move forward to introduce such modern effective policing in Northern Ireland. [Interruption.] I will not deal with funds as we dealt with them yesterday in oral questions. I refer hon. Members to the comments that my right hon. Friend the Secretary of State and I made then. I have no intention of adding to them today.
  The hon. Member for East Londonderry (Mr. Campbell) raised concerns about Democratic Unionist party membership on the police authority, and other hon. Members raised their involvement in the Weston Park talks. The Prime Minister and the Secretary of State have met the DUP regularly throughout the process. Indeed, I believe that the Secretary of State will meet the hon. Gentleman's party again soon. The talks at Weston Park were aimed at resolving difficulties and implementing the few remaining aspects of the agreement. Consequently, it was natural that those parties that backed the agreement should be invited.
  Mr. Dodds: Will the hon. Lady give way?
  Jane Kennedy: I hope that the hon. Gentleman will forgive me if I do not give way as I have only two minutes left. I will certainly discuss the matter with him afterwards.
  I will not touch on the many questions about other issues that we may deal with in implementing the reforms to the police force in Northern Ireland, because they are not subject to the order.
  My hon. Friend the Member for Hayes and Harlington (John McDonnell) said that the order was an acceptance that the peace process was failing. That is not the case and I hope that he will not use that interpretation. He missed my opening comments, in which I said that, in spite of the Government's considerable efforts to bring about the necessary agreement on the outstanding policing issues, it has not been possible to establish the Policing Board, which we regret.
  I have warm words for the full-time reserve. The hon. Member for Belfast, East (Mr. Robinson) referred to morale in policing, yet he then came out with the unfounded and inaccurate comment that the full-time reserve will be wiped out. The position is as I set it out yesterday. It will be phased out, but only when—[Interruption.] Perhaps the hon. Gentlemen will care to listen to this. It will be phased out only when the prevailing security situation and policing requirements permit. Those will be reviewed in the spring.
  I acknowledge that I have not been able to deal with all the points raised, but I hope that the House will accept the order.
  Question put and agreed to.
  Resolved,
  That the Police (Northern Ireland) Order 2001 (S.I., 2001 No. 2513), dated 18th July 2001, a copy of which was laid before this House on 18th July, be approved.
  Mr. Deputy Speaker (Sir Michael Lord): We now come to the business motion. The Question is as on the Order paper.
  Hon. Members: Aye.
  Mr. Deputy Speaker: We now come to the motion on deferred Divisions. The Question is as on the Order Paper.
  Hon. Members: Aye.

  Business of the House
  5.23 pm
  The Parliamentary Secretary, Privy Council Office (Mr. Stephen Twigg): I beg to move,
  That, at this day's sitting—

  (1) the Motions standing on the Order Paper in the name of the Chairman of the Committee of Selection may be made notwithstanding paragraph (2)(a) of Standing Order No. 121 (Nomination of select committees);

  (2) the Speaker shall put the Questions necessary to dispose of proceedings on any Motion relating to the membership of Select Committees not later than one and a half hours after the commencement of proceedings on the first such motion, and such Questions shall include the questions on any amendments selected by the Speaker which may then he moved;

  (3) the Motions may be proceeded with, though opposed. after Seven o'clock; and

  (4) Standing Order No. 38 (Procedure on divisions) shall apply and the Order [28th June] relating to Deferred divisions shall not apply if, after the time for the interruption of business, the opinion of the Speaker as to the decision on a Question is challenged in respect of any proceedings on the Motions.

  I apologise for my eagerness a moment ago, Mr. Deputy Speaker. I shall briefly outline the purpose of the motion in the name of my right hon. Friend the President of the Council and Leader of the House of Commons. In effect, the House is being asked to approve the timing of today's debates on appointments to Select Committees.
  The motion sets aside paragraph 2(a) of Standing Order No. 121, which provides that motions proposing nomination to departmental Select Committees must have at least two days' notice. Normally, that provision makes perfect sense and works to the advantage of the House as it prevents it from being bounced into nominations and ensures that hon. Members have opportunities to propose amendments. However, if we did not set it aside today, we would be unable, prior to the House rising tomorrow for the recess, to set up the Select Committees in question and make the other changes identified by the Committee of Selection.
  I hope that the House will agree that in those circumstances it is right to consider the new proposals from the Committee of Selection before we rise for the summer. We are allowing up to 90 minutes to debate the appointments to the Select Committees. As I stated earlier in the week, previous Parliaments were only ever given one and a half hours to discuss the appointments to all the Select Committees.
  A number of hon. Members wish to speak to the main motion and I hope that we can move on to it promptly.
  Mrs. Angela Browning: Agreed.
  5.25 pm
  Mr. Eric Forth: That is all very well. The Minister said 90 minutes. He probably thought that that sounded longer than an hour and a half. Here we are yet again being subjected unnecessarily to an arbitrary limitation on time. After all, we are all in relaxed mood. We are about to be off for almost three months. There is no hurry whatever. It is Thursday evening. Looking around the Chamber, I see colleagues smiling

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  and anticipating their buckets and spades. So what is the rush? Why do the Government feel it necessary yet again to impose an arbitrary time limit of 90 minutes on an important debate?
  I judge from the number of hon. Members present that there is going to be quite a lot to be said in that 90 minutes, so I have no intention of detaining the House. [HON. MEMBERS: "Hear, hear."] Well, with encouragement, I could detain the House, but on this occasion I judge that colleagues are ready to get on to the substance of the debate, as indeed am I. I have a few observations to make on one or two of the proposed Committee memberships. I am absolutely determined that we will not let these matters slide by and allow the Government to impose arbitrary time limits on debates without some protest.
  The Government cannot possibly know whether the House is satisfied that 90 minutes to debate the matters before us is remotely sufficient. We shall have to cover such matters as the proposed membership and probe why some of the changes are being made. I want to say a few words about the changes to Committees and the mechanisms whereby they are agreed, or not agreed as the case may be. I have other queries about the membership of other Committees. There is a lot of substance here. It is not a matter that will be skated over lightly. It is not a matter that we will deal with on the nod. It is something that we want to probe, question and query. Whether the House will want to vote on the memberships of individual Committees is something that we will ponder as the debate unwinds. Ninety minutes will almost certainly not be adequate so I record that fact yet again.
  Question put and agreed to

  Select Committees
  Motion made, and Question proposed,
  That Janet Anderson, Mr. Ronnie Campbell, Tony Cunningham, Mrs. Janet Dean, Mr. Lindsay Hoyle, Miss Julie Kirkbride, Mrs. Jacqui Lait, Mr. Simon Thomas and Mr. Dennis Turner be members of the Catering Committee.—[Ms Karen Buck, on behalf of the Committee of Selection.]
  Mr. Deputy Speaker (Sir Michael Lord): With this it will be convenient to debate motions 7 to 17.
  5.27 pm
  Mr. Eric Forth: Well, here we are giving mature consideration to a matter that has caused considerable controversy. This is an opportunity for the House to think again about how we have arrived at this position. We have arrived at it, have we not, because the House woke up rather late in the day to the fact that the way in which proposals were made to us for the membership and chairmanship of Select Committees was less than satisfactory. The reason for that is that, for as long as anyone can remember, and in probably all the political parties, the composition of Select Committees has been dealt with by a process of hon. Members going to the Whips and saying, "Please may I be on this Committee?"
  The Whips then deliberate in their mysterious and sinister way on whether hon. Members should be pleased or not. Then, worse than all of that, the usual channels—the Whips and the so-called party managers on each side of the House—come together and divvy up the membership of Committees. That is all bearing in mind, of course, that every Select Committee must have a clear majority of Government Members. That is the absurdity. That of course sets the whole tone and gives the whole flavour, and was all thought to be very satisfactory—was it not? It meant that the Whips and the party managers were able to please certain Members by giving them a Select Committee position and to punish others by withholding such a position. It is from that situation that the discontent that we have seen in the House recently has arisen.
  The point that worries me even more than that, and where there may even be a slight departure from integrity, is that we are in danger of accepting that a similar mechanism is at work in the allocation of Committee chairmanships. This whole problem arose in relation to chairmanships, although it has now spilled over into the membership of the Committees. The irony is that we are, I suspect, being asked to sanction the position we would have been in had the whole mechanism not worked to the disadvantage of certain Members: we are about to be asked to sanction, or agree to, the carve-up of Select Committee chairmanships in the same way as we were asked to do for the Committee memberships.
  I simply put the question—the next 90 minutes will, I suspect, he the only opportunity for us to do so—are we, as the House of Commons, now satisfied, first, that Select Committee chairmanships should be allocated arbitrarily between Government and Opposition Members and, secondly, that Select Committee members should be expected to accept that as a given? Are they to be told by their respective Whips and the usual channels, "This is the person that we have decided will chair your Committee"?
  David Winnick: When did the right hon. Gentleman become so passionate about this issue?

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  On 13 July 1992, when the hon. Member for Macclesfield (Mr. Winterton) was sacked—when he was not reappointed to the Select Committee on Health—there was a Division on the issue. I know that the right hon. Gentleman was a Minister at the time, but presumably he did not feel so passionately about the issue as to resign and vote with those of us who thought that the then Government's decision was wrong.
  Mr. Forth: That is true. When the hon. Gentleman is a member of the Government, as I am sure he will be shortly when his talents are recognised by the Prime Minister, he knows that he will have to face the same dilemma—[HON. MEMBERS: "Ah!"] I plead guilty to the fact that I was not prepared to forsake a modest—indeed, a minuscule—ministerial career for the principle that now advocate. I plead guilty to that. I further plead guilty to the fact that, yes, my view of the world, of the universe, of the House of Commons and of my role has changed since 1992. That may come as a revelation to the hon. Gentleman—I know that he is a bit slower on the uptake than most of us. However, I remind him that as I have had the privilege and the pleasure of four years in opposition, of which I have enjoyed every minute, and that as I propose to continue enjoying it—[HON. MEMBERS: "Hear, hear!"] —for the next four years, under whichever leader we choose, I see the matter differently. I make no secret of that, nor do I make any apology for it.
  I point out to the House that this will be the only opportunity, possibly for four or five years, for us as a House to express how we feel about the mechanism for deciding, first, who are the members of Select Committees and secondly, and of equal importance, who will chair those Committees. If hon. Members think that they won a great victory during the past two or three days I shall not burst their balloon, but I suggest that we are still sleepwalking through the system. By and large, we accept the system. although in a moment or two I shall have a word to say about the International Development Select Committee which has, rather bizarrely, been an exception to it. In general, it appears that the House and Members are prepared to accept the proposition that the Whips in each party will decide who shall be the Chairman of each Select Committee.
  Ann Clwyd: The right hon. Gentleman and I have known one another for a long time. He was always passionate about things in the European Parliament and has continued to be passionate in this place. I think that we are in agreement that the chairmanship of Select Committees is a matter for the Committees themselves: it is not for the Whips or for the parties to decide between them who should be the Chair of a Select Committee. The rules on Select Committees state clearly that the Committees themselves should choose the Chairman—not a named Chairman, but a Chairman from among the Committee's members. In the debate earlier in the week, my right hon. Friend the Leader of the House made it clear that he wants that to happen. That is one reason why the International Development Committee failed to agree on who should be its Chairman.
  Mr. Forth: That may or may not be the case, and I shall come to that Committee in a moment.
  510
  I want to make a challenge to hon. Members, and I speak as someone who is not a member of a Select Committee, so I have no interest in this matter at all. Although the hon. Lady and I would like the Committees to elect their Chairmen, I hesitate on that point, and I suspect that what I am about to say may lie behind the view of the Leader of the House. As long as the Government have a clear majority of members on Select Committees, the hon. Lady might understand a slight reticence on the part of Opposition Members about freeing up the whole system, as she and I would like, and letting a thousand chairmanships bloom, with Committees able to make their selection. Would there be any protection for Opposition Members in those circumstances? That, I predict, will be the reply from Ministers. The Leader of the House will say that the carve-up that occurs gives protection to Opposition Members.
  Ms Diane Abbott: I do not want to prolong the right hon. Gentleman's remarks, but I must point out that there is a difference between an agreement between the Whips on the principle that certain Committees will have a Chairman from an Opposition party and an agreement between the Whips on a named person. It is the latter that is wrong and objectionable, and the Whips have increasingly been pushing for such agreements in the last two Sessions.
  Mr. Forth: I am grateful to the hon. Lady. That may well be a solution, or at least a partial solution, that we should all consider. It would make a lot of sense to me if Committees were given, perhaps not total choice, but at least a degree of choice. The system could allow the chairmanship of certain Committees to be at the disposal of Opposition Members.
  Madam Deputy Speaker (Sylvia Heal): Order. May I remind the right hon. Gentleman that we are discussing not the Chairmen but the membership of Committees?
  Mr. Forth: I am grateful, Madam Deputy Speaker, and I will say no more about chairmanships per se. I simply believed that the subject flowed naturally from the substance of the membership of the Committees that we are being asked to consider.
  I sense that other Members want to speak—I hope that they do—and I do not want to prevent that, although hon. Members know that I am capable of speaking at length, if I want to. I trust, however, that others want to make a contribution, and this is the opportunity to do so.
  I want to say a few words about the membership of the International Development Committee. We will have to return to the issue on another occasion and at greater length. I suspect that some rather disgraceful things have taken place, and I am sad to see that my hon. Friend the Member for Gainsborough (Mr. Leigh) is to be discharged from the Committee, to be replaced by my hon. Friend the Member for Banbury (Tony Baldry). I suspect that the reasons for that discharge are pretty seedy and will not bear close examination because I do not think that they will reflect any credit on the Whips, the party managers or, I regret to say, the members of that Committee.
  I do not want to air the subject now, but I want to state on the record that what occurred in that Committee was regrettable and unfortunate. I hope that some of the

  511
  Members involved feel ashamed of themselves. I am not sure that it is any sort of guide as to how selection should happen. Those events give occasion for hesitation about whether we should completely free up the system.
  Many issues arise from the motions. I had intended to ask about the to-ings and fro-ings on the Modernisation, Procedure and Public Accounts Committees, but I will leave it to others to do that, if they believe that important issues are involved. Suffice it to say, this is the opportunity for Members to make their points about the membership of Committees. This is the opportunity for the House to express and reinforce its view, not only to the Leader of the House but to my hon. Friends on the Opposition Front Bench, because it affects all of them equally. I hope that right hon. and hon. Members will take that opportunity because it may not arise again for quite some time.
  5.40 pm
  The President of the Council and Leader of the House of Commons (Mr. Robin Cook): I am in full agreement with the right hon. Member for Bromley and Chislehurst (Mr. Forth) on at least one thing—he can continue to enjoy being in opposition. I assure him that all Labour Members will work to ensure that that continues for as long as possible.
  The right hon. Gentleman's observations as a tribune of the people, standing up to the forces of authority and the Whips, would have more moral force if there were evidence that he had done that when he sat on the Government Benches. He may wave his hand dismissively, but that is absolutely the case. My hon. Friend the Member for Walsall, North (David Winnick) referred to the vote in July 1992 when the Government removed the hon. Member for Macclesfield (Mr. Winterton) from the chairmanship of the Select Committee on Health. At that time, the right hon. Member for Bromley and Chislehurst was certainly not sleepwalking because he walked through the Division Lobby to vote him off the Committee.
  The right hon. Gentleman has made a clear and commendably frank admission that the Conservative Government did not allow a genuinely free vote on a House of Commons matter. We allowed a free vote on Monday and are here again today because we have acted to put into place the will of the House, which they tried to frustrate when in office.
  David Winnick: Is there not another aspect to consider? Not only have the Government rightly accepted Monday's decision, but the Modernisation Committee, as my right hon. Friend confirmed in business questions, is rightly examining the way in which we appoint hon. Members to Select Committees. The current system is unsatisfactory. The Tory Government refused to budge on the issue, as they did on so many others while they were in office.
  Mr. Cook: I am happy to agree that the Modernisation Committee has met and considered the matter. I shall return to that topic before I conclude because it is right that the House knows what we intend the timetable to be.
  I hope that this debate will prove less controversial than Monday's debate. The motion on the Order Paper puts my hon. Friend the Member for Crewe and Nantwich
  512
  (Mrs. Dunwoody) on the Transport, Local Government and the Regions Committee and my right hon. Friend the Member for Swansea, East (Donald Anderson) on the Foreign Affairs Committee. My hon. Friend the Member for Denton and Reddish (Andrew Bennett) intervened on me on Monday to ask whether it would be possible for the timetable for those appointments to be made before the House rises for the recess. I agreed that it would be, but that time was tight. I am pleased that this debate allows us to fulfil that commitment and deliver what we agreed on Monday.
  We have also taken the opportunity to bring before the House the members of the Northern Ireland Affairs Committee so that that last departmental Select Committee will be approved before we rise. If the House approves the names, there are contingency plans for all three Committees to meet shortly after the debate to choose a Chairman and work out a programme. We have set up the Select Committees within four weeks of the Queen's Speech, which is in record time. That beats even our previous record of doing it within two months in 1997 and is way ahead of the five months that the Conservative Government took in 1987.
  Over the past week, things have been said about the Whips Office which have not been unmingled pleasure and flattery. I want to balance that. People worked very hard to ensure that the names were brought before the House on Monday and, as a consequence of the vote then, presented today. We should recognise the effort that went into that. The Whips have ensured that 350 places have been filled from a possible 500 candidates. That is not a bad achievement within a space of a week and a half.
  On the question asked by my hon. Friend the Member for Walsall, North, the Modernisation Committee is one of the Committees that has met since Monday. It may help the House if I outline how we intend to proceed. We decided at our meeting on Wednesday that our first priority would be to produce a report on the working of the Select Committees. I would expect that report to be comprehensive and to consider the many recommendations made in the previous Parliament by the Liaison Committee, as well as those that we have received from bodies outside the House.
  There are several issues to consider—for example, the proposal that the Liaison Committee repeatedly made in the previous Parliament to hold a half-hour debate on matters of topical interest suggested by the Select Committees immediately after Question Time once a week. Another contentious suggestion—I heard voices against it on Monday and since then—is the Liaison Committee's proposal to introduce a salary structure for the Chairmen of Select Committees. The Modernisation Committee should examine that matter and report back to the House.
  Another matter, which is recognised universally on both sides of the House, is the presentation and style of Select Committee reports. Leaving aside the excellence and the exciting nature of the contents of those reports, their presentation does not necessarily convey that excitement in an attractive style and format. The reports appear to predate the invention of graphics and colour printing. We should address those issues if we want to ensure that the House exercises its powers of scrutiny in a way that connects with the public and that they find attractive and inviting.

  513
  We have resolved that, to take forward that study, we will take evidence from the members of the Liaison Committee in the previous Parliament; from those who served on the Norton commission, set up by the Opposition; and from those involved in the Hansard Society's recent report. Any report in which all those issues are considered in the round will necessarily take rather longer than is desirable to address the process of appointing Members to Select Committees. That is why it is important that we respond urgently to the need for a report on the nomination process to Select Committees. That is urgent because, in the autumn, we shall be faced with the need to fill vacancies as they arise on Select Committees.
  I understand that it must be the will of the House to try to have in place a new system before such vacancies arise and before the House is asked to fill them. That is why the Modernisation Committee has already resolved to meet in September to discuss the issue. This depends on the agreement of the Committee, but I hope that it will be possible to bring a report on nominating Members to vacancies on Select Committees before the House shortly after we return from the recess.
  Last month, we were faced with a choice—whether we sought to set up the Select Committees by the recess, or whether we first sought to lever into place a new nominations system for Select Committees. If we had done the latter, we should have been unable to proceed with the nominations for the Select Committees until well into the autumn and, possibly, not until November.
  Mr. Dominic Grieve: I accept the point made by the right hon. Gentleman, but I am sure that he will agree that if towards the end of the previous Parliament better recognition had been given to the growing disquiet about the Select Committee selection systems and the opportunities that were presented—only in Opposition time—to debate such issues had been taken, we could have made progress before the general election, which would have prevented the events that have taken place from occurring.
  Mr. Cook: It is always the case that if decisions had been taken beforehand, one would not be faced with the need to take them afterwards. Starting from where we began after the election, we faced the choice that I have mentioned. It is always very nice to think that we can press the fast-rewind button and have a different set of choices, but that option was not available to us.
  The Government are entitled to be given credit for meeting the timetable of setting up the Select Committees by the recess. Since Monday, 26 Select Committees have met and have started the process of appointing a Chairman and choosing a work programme. After this debate, a further three will have met, so by the recess, 29 separate Select Committees will have begun scrutinising the Government.
  I entirely accept, however, that the message of the past few days is that this is not a time for the Government, having set up the Select Committees, to rest on their oars. We now must apply the same urgency that we put into setting up the Select Committees to the task of implementing a fair system of nomination to them. That
  514
  is why I give an undertaking that we will work through the recess and immediately when the House returns in the hope that, by autumn, before there are vacancies on Select Committees, we have implemented a new system that is accepted as transparent, seen by all Members as fair and ensures that this Chamber has the final say in appointments.
  5.50 pm
  Mr. Andrew Stunell: I am delighted that the House is faced with another set of Government motions that cover substantially the points raised in debate and by the results of the votes on Monday. It is fortunate, to say the least, that we have had three opportunities in a fortnight to address the fundamental question of how the House can best hold the Government to account. We welcome the change of heart on nominations to the Select Committees on Transport, Local Government and the Regions and on Foreign Affairs. We shall support those motions unreservedly.
  However, it would be a mistake to suppose that all the problems have been solved and all the difficulties relieved simply by returning to the subject today. I was pleased to hear renewed assurances from the Leader of the House that the processes of examination and reform will go ahead speedily. I say again to him that the House has debated some clear proposals that would go some way to resolving the problems. I hope that the Modernisation Committee, on which I happily serve, will make proposals that will satisfy the demands of the House.
  There are even doubts and reservations among Members about some of today's nominations. The right hon. Member for Bromley and Chislehurst (Mr. Forth) referred to the International Development Committee. Some of us have concerns about the change in its membership and the implication that another Member is to be imposed on it in sequence. Whatever the ins and outs, the appointment has been disputed and difficult. It is to be regretted that revised procedures for nominations will not be established before the Committee appoints a Chairman. The Leader of the House will be well aware, too, of the difficulties over the Information Committee, which was reduced to appointing what it described as a temporary Chairman until October, while difficulties are resolved.
  There is no doubt, therefore, that reform must be pursued vigorously. Nevertheless, on balance it is our view that the motions should be supported because it is of fundamental importance that the Committees be up and functioning in some form or another, even if subsequently they must be reviewed and reformed.
  5.53 pm
  Sir Patrick Cormack: Enoch Powell once said to me that gratitude is a commodity in short supply in politics, and never were truer words spoken. The House owes a debt to the Leader of the House because he has responded with alacrity. He took what could have been interpreted as a defeat on Monday with charm and graciousness, and he has honoured his promise, which augurs well for his time as Leader of the House. I for one am grateful to him, as I hope are Members of all parties.
  It is essential that if the Modernisation Committee is considering the payment of sums of money to Chairmen of Select Committees, those Chairmen are not appointed

  515
  or imposed on Committees by the Whips. It would be wrong if that became another example of patronage. In fact, it would destroy the good effect of the move. I urge the right hon. Gentleman to bear that in mind, and in doing so, to recognise that my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) made one very good point.
  Mr. Forth: Only one?
  Sir Patrick Cormack: Well, I am always a little careful about what I say about my right hon. Friend, for fear of encouraging him to say more. However, he made one very good point, about the appointment of Chairmen, which was taken up and amplified by the hon. Member for Hackney, North and Stoke Newington (Ms Abbott) —
  Madam Deputy Speaker: Order. I have already made the point that we are discussing the membership of Select Committees, not the chairmanship.
  Sir Patrick Cormack: All right, Madam Deputy Speaker; of course I accept your strictures. I urge the Leader of the House to bear those points in rnind and thank him again for what he has done; I hope that we shall see some good proposals early in the autumn.
  5.56 pm
  Ann Clwyd: As a member of the International Development Committee, I should make the situation concerning membership clear. Obviously we accept that the Committee has been allocated to the Opposition, but perhaps we would have liked some discussion of the allocation of various Committees. I hope that in future there will not be a status quo, and there will be more movement in party ownership of particular Select Committees. In this case, the argument is not about who should have the ownership of the Committee; we accept that it is from the Conservative Members allocated to that Committee that we choose a Chairman. We have had two meetings: yesterday the group was split, five Members against five, and again today, so there is obviously deadlock. It is good for Committees to have the opportunity to question candidates for the chairmanship closely, as we did yesterday.
  Mr. Forth: Is the hon. Lady aware of such a process in any other Committee? Did the Modernisation Committee, for example, quiz the Leader of the House closely on his credentials for taking an even-handed approach to the so-called modernisation of the House? I am puzzled why that process has taken place in only one Committee, as far as I know. Can the hon. Lady explain why it should happen in the International Development Committee and not, apparently, in any other Committee?
  Madam Deputy Speaker: Order. Once again, I remind all hon. Members that we are discussing the membership of Committees. Could they please confine their remarks to that?
  Ann Clwyd: Thank you for putting us back on track, Madam Deputy Speaker; I shall keep closely to the path that you have outlined.
  516
  The International Development Committee deals with developing countries, and subjects such as the position of women in those countries, and poverty. The Chairman meets many people throughout the world. It is important that the Committee, on which I have served from the start, should have faith in the person who is going to become Chairman; the membership should therefore be able to decide who should hold that position. I do not want to go over the subject again, but there should not be strong intimations about who the Committee should support. The Select Committee rules say —
  Madam Deputy Speaker: Order. I really must bring the hon. Lady to order. As I have said before, we are discussing the membership of the Committee; we are not here to debate who should chair it.
  Ann Clwyd: Thank you Madam Deputy Speaker. The role of Committee members is important. People who have served on a Select Committee for a number of years should be considered as candidates over and above people who are parachuted in because the Whips have decided who should take the chair. That is why I object to the way things are being done. The Leader of the House has made it clear that he intends to reform all that.
  I think that we were all pleased that the Select Committees got under way very early, but perhaps on reflection we should not have put pressure on our Whips to set up the Committees before the beginning of the recess. On reflection, that was a mistake. We should have had more time to ponder the matter.
  Mr. Tony McWalter: Is my hon. Friend saying that the list of members of Select Committees usually has one member who has been put in, parachuted in or whatever, and that the process of compiling the membership of a Select Committee needs some attention?
  Ann Clwyd: Yes, I am.
  I shall now wrap up my speech, my hon. Friends will be pleased to know. The matter needs a lot more reflection. There should be more transparency. We want to know why some people get on Select Committees and others do not, and why some people who have served on Select Committees are taken off and not given a reason why. I support the proposal by the Leader of the House to make the membership of Select Committees much more transparent in future.
  Question put and agreed to.
  Resolved,
  That Janet Anderson, Mr. Ronnie Campbell, Tony Cunningham, Mrs. Janet Dean, Mr. Lindsay Hoyle, Miss Julie Kirkbride, Mrs. Jacqui Lait, Mr. Simon Thomas and Mr. Dennis Turner be members of the Catering Committee.

  COMMITTEES
  Madam Deputy Speaker: With permission, I shall put together motions 7 and 8.

  517
  Ordered,

  COMMITTEES
    ENVIRONMENT, FOOD AND RURAL AFFAIRS
    That Mr. Bill Olner be discharged from the Environment, Food and Rural Affairs Committee and Mr. Austin Mitchell be added to the Committee.
    FOREIGN AFFAIRS
    That Donald Anderson, Mr. David Chidgey, Sir Patrick Cormack, Mr. Fabian Hamilton, Mr. Eric Illsley, Andrew Mackinlay, Mr. John Maples, Mr. Bill Olner, Mr. Greg Pope, Sir John Stanley and Ms Gisela Stuart be members of the Foreign Affairs Committee. —[Ms Karen Buck, on behalf of the Committee of Selection.]

  INTERNATIONAL DEVELOPMENT
  Motion made, and Question put,
  That Mr. Edward Leigh be discharged from the International Development Committee, and Tony Baldry be added to the Committee. —[Ms Karen Buck, on behalf of the Committee of Selection.]
  The House divided: Ayes 304, Noes 55.

  Division No. 37]

  [6.2 pm

  AYES

  Adams, Mrs Irene (Paisley N)

  Caton, Martin

  Ainger, Nick

  Challen, Colin

  Ainsworth, Bob (Cov'try NE)

  Chapman, Ben (Wirral S)

  Allen, Graham

  Chapman, Sir Sydney (Chipping Barnet)

  Arbuthnot, Rt Hon James

  Armstrong, Rt Hon Ms Hilary

  Chaytor, David

  Atherton, Ms Candy

  Clapham, Michael

  Atkins, Charlotte

  Clappison, James

  Atkinson, Peter (Hexham)

  Clark, Dr Lynda(Edinburgh Pentlands)

  Austin, John

  Bacon, Richard

  Clark, Paul (Gillingham)

  Bailey, Adrian

  Clarke, Charles (Norwich S)

  Baldry, Tony

  Clarke, Rt Hon Kenneth (Rushcliffe)

  Barker, Greg

  Barrett, John

  Clifton-Brown, Geoffrey

  Barron, Kevin

  Coaker, Vernon

  Battle, John

  Coffey, Ms Ann

  Bayley, Hugh

  Cohen, Harry

  Beard, Nigel

  Colman, Tony

  Beggs, Roy

  Cook, Rt Hon Robin (Livingston)

  Bell, Stuart

  Cormack, Sir Patrick

  Benn, Hilary

  Corston, Jean

  Bennett, Andrew

  Cox, Tom

  Benton, Joe

  Cranston, Ross

  Berry, Roger

  Cruddas, Jon

  Betts, Clive

  Cummings, John

  Blizzard, Bob

  Cunningham, Jim (Cov'try S)

  Boateng, Rt Hon Paul

  Cunningham, Tony (Workington)

  Boswell, Tim

  Curtis-Thomas, Mrs Claire

  Bradley, Rt Hon Keith (Withington)

  Darling, Rt Hon Alistair

  Bradley, Peter (The Wrekin)

  David, Wayne

  Brady, Graham

  Davies, Rt Hon Denzil (Llanelli)

  Brennan, Kevin

  Davies, Geraint (Croydon C)

  Brinton, Mrs Helen

  Davies, Quentin (Grantham)

  Brooke, Annette

  Davis, Rt Hon David (Haltemprice)

  Browne, Desmond

  Denham, Rt Hon John

  Bryant, Chris

  Dhanda, Parmjit

  Buck, Ms Karen

  Dismore, Andrew

  Burnham, Andy

  Dobson, Rt Hon Frank

  Burns, Simon

  Dodds, Nigel

  Burnside, David

  Donaldson, Jeffrey M

  Burt, Alistair

  Donohoe, Brian H

  Cairns, David

  Dowd, Jim

  Cameron, David

  Drew, David

  Campbell, Mrs Anne (C'bridge)

  Drown, Ms Julia

  Campbell, Gregory (E Lond'y)

  Eagle, Angela (Wallasey)

  Casale, Roger

  Eagle, Maria (L'pool Garston)

  518

  Effort, Clive

  Lloyd, Tony

  Ellman, Mrs Louise

  Llwyd, Elfyn

  Ewing, Annabelle

  Love, Andrew

  Field, Rt Hon Frank (Birkenhead)

  Lucas, Ian

  Fisher, Mark

  Luff, Peter

  Fitzpatrick, Jim

  Luke, Iain

  Fitzsimons, Mrs Loma

  Lyons, John

  Flint, Caroline

  McAvoy, Thomas

  Foster, Michael Jabez (Hastings)

  McCabe, Stephen

  Francis, Dr Hywel

  McCartney, Rt Hon Ian

  Gardiner, Barry

  McDonagh, Siobhain

  George, Rt Hon Bruce (Walsall S)

  MacDonald, Calum

  Gilroy, Linda

  MacDougall, John

  Grayling, Chris

  McFall, John

  Green, Matthew (Ludlow)

  McGuire, Mrs Anne

  Greenway, John

  McIntosh, Miss Anne

  Grieve, Dominic

  McIsaac, Shona

  Griffiths, Win (Bridgend)

  McKechin, Ann

  Grogan, John

  McLoughlin, Patrick

  Hain, Peter

  McNulty, Tony

  Hamilton, David (Midlothian)

  Mactaggart, Fiona

  Hanson, David

  Mahmood, Khalid

  Harris, Dr Evan (Oxford W)

  Mallaber, Judy

  Harris, Tom (Glasgow Cathcart)

  Mandelson, Rt Hon Peter

  Havard, Dai

  Mann, John

  Healey, John

  Marris, Rob

  Henderson, Ivan (Harwich)

  Marsden, Gordon (Blackpool S)

  Heppell, John

  Marsden, Paul (Shrewsbury)

  Hermon, Lady

  Merron, Gillian

  Hill, Keith

  Michael, Rt Hon Alun

  Holmes, Paul

  Miller, Andrew

  Hood, Jimmy

  Moffatt, Laura

  Hope, Phil

  Moonie, Dr Lewis

  Howarth, Rt Hon Alan (Newport E)

  Moran, Margaret

  Howarth, George (Knowsley N)

  Mountford, Kali

  Howarth, Gerald (Aldershot)

  Mudie, George

  Howells, Dr Kim

  Munn, Ms Meg

  Hughes, Beverley (Stretford)

  Murphy, Jim (Eastwood)

  Hughes, Kevin (Doncaster N)

  Murphy, Rt Hon Paul (Torfaen)

  Hughes, Simon (Southwark N)

  Murrison, Dr Andrew

  Hutton, John

  Naysmith, Dr Doug

  Iddon, Dr Brian

  Norris, Dan

  Illsley, Eric

  O'Brien, Mike (N Warks)

  Jackson, Helen (Hillsborough)

  Olner, Bill

  Jamieson, David

  Organ, Diana

  Jenkins, Brian

  Owen, Albert

  Johnson, Alan (Hull W & Hessle)

  Palmer, Dr Nick

  Johnson, Miss Melanie(Welwyn Hatfield)

  Pearson, Ian

  Perham, Linda

  Jones, Helen (Warrington N)

  Picking, Anne

  Jones, Kevan (N Durham)

  Pickthall, Colin

  Jones, Lynne (Selly Oak)

  Pike, Peter

  Jones, Martyn (Clwyd S)

  Plaskitt, James

  Jowell, Rt Hon Tessa

  Pollard, Kerry

  Joyce, Eric

  Pope, Greg

  Keeble, Ms Sally

  Pound, Stephen

  Keen, Alan (Feltham & Heston)

  Prentice, Ms Bridget (Lewisham E)

  Keen, Ann (Brentford & Isleworth)

  Prentice, Gordon (Pendle)

  Keetch, Paul

  Prisk, Mark

  Kemp, Fraser

  Prosser, Gwyn

  Khabra, Piara S

  Pugh, Dr John

  Kidney, David

  Purchase, Ken

  Kilfoyle, Peter

  Purnell, James

  King, Andy (Rugby & Kenilworth)

  Quin, Rt Hon Joyce

  Knight, Jim (S Dorset)

  Quinn, Lawrie

  Kumar, Dr Ashok

  Rammell, Bill

  Ladyman, Dr Stephen

  Randall, John

  Lamb, Norman

  Rapson, Syd

  Lammy, David

  Raynsford, Rt Hon Nick

  Laxton, Bob

  Reid, Alan (Argyll & Bute)

  Lazarowicz, Mark

  Robertson, Angus (Moray)

  Lepper, David

  Robertson, Hugh (Faversham)

  Leslie, Christopher

  Robertson, John(Glasgow Anniesland)

  Levitt, Tom

  Liddell, Rt Hon Mrs Helen

  Robinson, Geoffrey (Cov'try NW)

  Liddell-Grainger, Ian

  Robinson, Iris (Strangford)

  519

  Robinson, Peter (Belfast E)

  Tipping, Paddy

  Ross, Ernie

  Todd, Mark

  Roy, Frank

  Touhig, Don

  Ruddock, Joan

  Turner, Dennis (Wolverh'ton SE)

  Russell, Bob (Colchester)

  Turner, Dr Desmond (Kemptown)

  Russell, Ms Christine (Chester)

  Turner, Neil (Wigan)

  Ryan, Joan

  Twigg, Derek (Halton)

  Salmond, Alex

  Twigg, Stephen (Enfield)

  Salter, Martin

  Tynan, Bill

  Savidge Malcolm

  Vis, Dr Rudi

  Sawford, Phil

  Walley, Ms Joan

  Shaw, Jonathan

  Walter, Robert

  Sheridan Jim

  Ward, Ms Claire

  Simon, Siôn

  Watson, Tom

  Simpson, Alan (Nottingham S)

  Watts, David

  Smith Rt Hon Andrew (Oxford E)

  Weir, Michael

  Smith, Angela (Basildon)

  White, Brian

  Smith, John (Glamorgan)

  Whittingdale, John

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

  Wicks, Malcolm

  Southworth, Helen

  Wiggin, Bill

  Spellar, John

  Wilkinson, John

  Squire, Rachel

  Wills, Michael

  Stinchcombe, Paul

  Winterton, Mrs Ann (Congleton)

  Stoate, Dr Howard

  Winterton, Nicholas (Macclesfield)

  Winterton, Ms Rosie (Doncaster C)

  Strang, Rt Hon Dr Gavin

  Woolas, Phil

  Stunell, Andrew

  Worthington, Tony

  Sutcliffe, Gerry

  Wright, Anthony D (Gt Yarmouth)

  Tami, Mark

  Wright, David (Telford)

  Taylor, Ms Dari (Stockton S)

  Wright, Tony (Cannock)

  Taylor, David (NW Leics)

  Thomas, Gareth (Clwyd W)

  Tellers for the Ayes:

  Thomas, Gareth R (Harrow W)

  Mr. Ivor Caplin and

  Timms, Stephen

  Mr. Graham Stringer.

  NOES

  Abbott, Ms Diane

  Hoban, Mark

  Austin, John

  Hopkins, Kelvin

  Barnes, Harry

  Laws, David

  Beith, Rt Hon A J

  McCafferty, Chris

  Blunt, Crispin

  Mackinlay, Andrew

  Brazier, Julian

  McWalter, Tony

  Burgon, Colin

  Mahon, Mrs Alice

  Cable, Dr Vincent

  Marshall-Andrews, Robert

  Calton, Patsy

  Morgan, Julie

  Campbell, Rt Hon Menzies(NE Fife)

  Öpik, Lembit

  Price, Adam

  Carmichael, Alistair

  Reed, Andy (Loughborough)

  Clarke, Tony (Northampton S)

  Rendel, David

  Clwyd, Ann

  Robathan, Andrew

  Cryer, Mrs Ann (Keighley)

  Sanders, Adrian

  Davidson, Ian

  Skinner, Dennis

  Doughty, Sue

  Thomas, Simon (Ceredigion)

  Duncan, Peter

  Tonge, Dr Jenny

  Evans, Nigel

  Tyler, Paul

  Field, Mark (Cities of London)

  Wareing, Robert N

  Flynn, Paul

  Watkinson, Angela

  Forth, Rt Hon Eric

  Wiggin, Bill

  Foster, Don (Bath)

  Williams, Hywel (Caemarfon)

  Francois, Mark

  Winnick, David

  Gerrard, Neil

  Wood, Mike

  Goodman, Paul

  Wyatt, Derek

  Griffiths, Jane (Reading E)

  Hancock, Mike

  Tellers for the Noes:

  Hayes, John

  Jeremy Corbyn and

  Heath, David

  John McDonnell.

  Question accordingly agreed to.

  COMMITTEES
  Madam Deputy Speaker: With the leave of the House, I shall take motions 10 and 11 together.
  Ordered,

  COMMITTEES
    NORTHERN IRELAND AFFAIRS
    That Mr. Adrian Bailey, Mr. Harry Barnes, Mr. Roy Beggs, Mr. Henry Bellingham, Mr. Tony Clarke, Mr. Stephen McCabe, Mr. Eddie McGrady, Mr. Michael Mates, Mr. Stephen Pound, Mr. Peter Robinson, the Reverend Martin Smyth, Mark Tami and Mr. Bill Tynan be members of the Northern Ireland Affairs Committee.
    SCOTTISH AFFAIRS
    That Mr. David Marshall be discharged from the Scottish Affairs Committee, and Mrs. Irene Adams be added to the Committee. —[Ms Karen Buck, on behalf of the Committee of Selection.]

  TRANSPORT, LOCAL GOVERNMENT AND THE REGIONS
  Ordered,
  That Andrew Bennett, Sir Paul Beresford, Mr. Clive Betts, Mr. Gregory Campbell, Mr. John Cummings, Mr. Brian H. Donohoe, Mrs. Gwyneth Dunwoody, Mrs. Louise Ellman, Chris Grayling, Helen Jackson, Ms Oona King, Miss Anne McIntosh, Mr. Bill O'Brien, Dr. John Pugh, Christine Russell, Mr. George Stevenson and Mr. Bill Wiggin be members of the Transport, Local Government and the Regions Committee. —[Ms Karen Buck, on behalf of the Committee of Selection.]

  Madam Deputy Speaker: With permission, I shall put together the further motions relating to Committees.
  Ordered,

  COMMITTEES
    ENVIRONMENTAL AUDIT
    That Dr. Brian Iddon be discharged from the Environmental Audit Committee and Mr. Colin Challen be added to the Committee.
    HUMAN RIGHTS (JOINT COMMITTEE)
    That Tony Cunningham be discharged from the Human Rights (Joint Committee) and Mr. Kevin McNamara be added to the Committee.
    MODERNISATION
    That Helen Jackson and Julie Morgan be discharged from the Modernisation Committee and Mr. David Kidney, Mr. Greg Knight and Anne Picking be added to the Committee.
    That Mr. John Lyons be discharged from the Procedure Committee.
    PUBLIC ACCOUNTS
    That Mr. Edward Leigh be a member of the Committee of Public Accounts. —[Ms Karen Buck, on behalf of the Committee of Selection.]

  Wolverhampton and Dudley Brewery
  Motion made, and Question proposed, That this House do now adjourn. —[Phil Woolas.]
  6.16 pm
  Sir Patrick Cormack: I am delighted that so many hon. Members are in the House to hear the opening of the debate. I am particularly grateful to Mr. Speaker, who is of course a renowned teetotaller, for choosing the subject of this evening's Adjournment debate, because it is, of course, Mr. Speaker's choice on a Thursday.
  I raise a subject of great importance, particularly to those of us who live in the west midlands, and I am delighted to see the three hon. Members representing Wolverhampton in their places. I hope that the hon. Member for Wolverhampton, South-West (Rob Marris) will be able to make a brief contribution to the debate because the main brewery to which I shall refer is in his constituency.
  This is really a story of capitalism. I am a great believer in capitalism, but I believe in responsible capitalism, and in people who are in a position to control others' lives because of what they own doing it responsibly. The Wolverhampton and Dudley brewery is an excellent example of responsible capitalism. The company is in the top 300 in the country; it is the country's leading regional brewer. It has pubs as far apart as Alnwick in the north, Weston-super-Mare in the south-west, Corby in the east and Aberystwyth in Wales in the west. It owns Marston's in Burton, the Mansfield brewery and Camerons in Hartlepool, but the heart of the company is in the heart of England, in the black country in the west midlands. It is a thriving, well-run company and has been a cornerstone of local community life since 1890.
  The present managing director is the fifth generation of Thompsons to have had a prominent position in the Wolverhampton and Dudley brewery. The company has contributed greatly to the life of the local community. There are two charitable trusts which have education as their particular objective. It has grown over the years, but its growth by acquisition has been based on success and a sense of responsibility. It is a fiercely independent company in an industry that is increasingly dominated by a few big breweries. It has 1,800 pubs spread around the country, most of them concentrated in the west midlands.
  In my constituency there are pubs like the Dudley Arms in Himley, the White Hart in Kinver, the Greyhound in Swindon and the Plough in Trysull—all wonderful English names for good English pubs, each one of them different from the others, each with its own distinctive character and ambience. That is what we mean by an English pub. The plastic uniformity of the theme pub is not for any true Englishman. I would resist to the end the development of pubs in that direction.
  The company is now threatened by a hostile and aggressive takeover by Pubmaster, a company that is entirely foreign-financed. I am not a little Englander—I am a great believer in our place in Europe—but that does not diminish my fierce local pride and patriotism, and I do not want the Wolverhampton and Dudley brewery to fall into the hands of foreigners who neither know nor care about the English pub.
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  What is worse, we know that if Pubmaster acquires the company, it will sell off the breweries and keep the pubs. The ales that people enjoy would then be at risk. There is no guarantee that the breweries would all survive, and if they did, they would certainly be swallowed up by one of the big conglomerates. That is where the Minister comes in. I am most grateful to her for being here. She should carefully consider referring the matter to the Monopolies and Mergers Commission.
  Mr. Dennis Turner: The hon. Gentleman has spoken eloquently about the uniqueness of the pubs associated with the Wolverhampton and Dudley brewery, and they are indeed wonderful pubs, but I declare my interest as a dedicated Banks's boozer drinker. It is not the pub but the booze that attracts me. The beer is wonderful. The uniqueness of the beer brewed at the Park brewery at Wolverhampton is at great risk. Not only the beer and the pubs but 1,700 or 1,800 jobs at the breweries are at risk. We really must keep our beer—Banks's beer, Marston's beer—brewed where it has always traditionally been brewed.
  Sir Patrick Cormack: That seems to have been a mini-speech in the middle of mine. I have a great affection for the hon. Gentleman and I agree with every word that he says, even though he has stolen some of my best lines. He probably knows more about beer than anyone else in the House, and I hope he will soon be reincarnated as Chairman of the Catering Committee.
  If the hostile bid succeeded, there would be asset stripping of the worst sort. Furthermore, the pubs themselves, which Pubmaster says it wants to keep, would be threatened by the plastic uniformity of the theme pub, with everything, including the menu, the same in every one. That is the negation of the English pub, which is unique to this country and is already under threat. There are far too many villages and parts of towns where the pub is at risk or has closed. The figures are frightening.
  We are talking about a thriving company, not one that needs bailing out, yet it is at risk. The hon. Member for Wolverhampton, South-East (Mr. Turner) talked about jobs. The total number of jobs involved is 17,000, and the number of jobs at risk in our part of the world—I checked the figures this afternoon—is 4,500, if we take into account the drivers and all the others involved.
  Pubmaster's unscrupulous approach was seen this week when the brewery had to take legal action over Pubmaster's divulging of information to potential buyers of breweries when it has bought the pubs.
  We are dealing with a real human story that is repeated in many homes in my constituency and those of all the hon. Gentlemen attending this debate. A cloud of uncertainty hangs over many lives. In some cases, we are talking about families who have given two, three, four or five generations of service to this local company and have been well treated, showing a wonderful corporate spirit in return. I spoke about the charitable doings of the trusts established by the family, but the workers give enormous sums of money to the Compton hospice. They have a corporate and community identity and spirit, and it is at risk.
  I appeal to the Minister to consider a reference to the Monopolies and Mergers Commission, because of the threat to the breweries. I also wish to appeal through the

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  Minister to the institutional shareholders. There is no doubt that if the individual shareholders had their say, the sale would never take place. However, the final outcome of the hostile bid will be determined not in the homes of Wolverhampton or south Staffordshire but in a few boardrooms in the City of London. I wish to say to those institutional shareholders, "You have a thriving company here in which many people take great pride. You have jobs that are secure and a product that is appreciated and enjoyed. You have pubs that are visited by people who regard them as their locals and who enjoy going there. Do not put all that at risk for the sake of a quick buck".
  Mr. Ken Purchase: The hon. Gentleman speaks well. He said that he supports the notion of capitalist means of production, which has indeed brought great wealth across the world. However, he speaks like a socialist and that is welcome. On a serious note, the danger of international capitalism of the type that he has eloquently described is that it can be completely disconnected from its localities and become hostile to the very people who ensure results for the shareholders. Will the hon. Gentleman make a personal appeal to the institutional and other shareholders to recognise that their profits are at risk if they continue with that folly?
  Sir Patrick Cormack: The hon. Gentleman is being a little mischievous. I am not a socialist. As he well knows, I am an unrepentant capitalist, as I made plain earlier. However, I believe in responsible capitalism, which has done so much to help the countries of western Europe, including ours, enjoy our present standard of living. In fact, I am involved in an annual award for responsible capitalism, which was presented last year by no less a person than the Chancellor of the Exchequer. We made common cause on that issue and we will continue to do so.
  The company is a good example of responsible capitalism, but it is in danger from an avaricious, inhuman capitalism—there is good and bad in everything—and I repudiate that. I hope that those who have the ultimate say will also repudiate it, so that the people whose lives have been so clouded by uncertainty will be able to relax this summer. The bid is not in the best interests of the industry, of the midlands, of those who work for the company or of the consumers who enjoy the products that are produced.
  6.28 pm
  Rob Marris: I should declare a slight non-pecuniary interest, in that my constituency office is rented at a commercial rate from the brewery and I am currently negotiating a new lease. I find it surprising but pleasing that the hon. Member for South Staffordshire (Sir Patrick Cormack) is coming around to the views of Labour Members about responsible capitalism and, if his current trajectory continues, he may even cross the Floor.
  On a more serious note, the hon. Gentleman and I are at one on this issue. The breweries are local institutions and they support other local institutions, namely the pubs of which he spoke so eloquently. Pubs are a fine British, as well as English, tradition.
  I am especially concerned about the jobs in Wolverhampton, South-West, as the Park brewery is in my constituency. I may not be as big a beer drinker as
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  my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner)—few hon. Members are—but I do drink beer and am concerned about the brands made by the Wolverhampton and Dudley brewery.
  The Campaign for Real Ale has always been very clear that that company—Britain's largest independent regional brewer—does a great job. We must protect the brands that it makes, and the fear is that the pubs will be sold off if the takeover goes through. The brands would then also be sold off, with the result that they would not be brewed in the original breweries. That would be a loss to the nation's taste buds.
  I thank the hon. Member for South Staffordshire for raising the matter in this Adjournment debate.
  6.30 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): I join in congratulating the hon. Member for South Staffordshire (Sir P. Cormack) on securing this debate. He and my hon. Friends the Members for Wolverhampton, South-East (Mr. Turner), for Wolverhampton, North-East (Mr. Purchase), for Wolverhampton, South-West (Rob Marris), for West Bromwich, East (Mr. Watson) and for Dudley, South (Mr. Pearson) clearly all feel passionately about the subject of the debate.
  When I realised that I was to reply to the debate, I did not appreciate that it would also be about socialism and capitalism, and about good and bad. Wide new horizons have opened up of which we were unaware when we began. I fully recognise that this is a key concern to the hon. Member for South Staffordshire, and to other hon. Members whose constituents also work for the brewery concerned. I accept that the hon. Gentleman is a passionate consumer.
  I am sure that the hon. Member for South Staffordshire will appreciate that I cannot comment in detail on Pubmaster's proposed acquisition of Wolverhampton and Dudley, as the merger is being considered by the Office of Fair Trading under the Fair Trading Act 1973. In due course, the Director General of Fair Trading will advise my right hon. Friend the Secretary of State on whether the merger should be referred to the Competition Commission for further investigation.
  What I can do, however, is set out some background to the Government's overall approach to competition policy. I can also sketch out the process for examining mergers such as this, the wider position within the beer market as a whole and the future direction of merger control.
  On competition policy, my right hon. Friends the Chancellor of the Exchequer and the Secretary of State for Trade and Industry made it clear when they announced proposals for an enterprise Bill last month that the Government intend to tackle the challenge of enterprise and productivity in the UK economy, of which an effective competition policy is a key part. It is at the heart of the Government's strategy to close the productivity gap between the UK and our industrial competitors. Competition is a key driver for innovation, productivity and growth.
  Competitive markets provide the best means of ensuring that the economy's resources are put to their best use by encouraging enterprise and efficiency and

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  widening choice. Competition policy is used to ensure the efficient workings of markets, and to prevent abuses of markets that lead to less innovation, higher prices, lower choice and lower quality than would result from efficient competition. That may link up with the points made earlier about what capital at its best—as represented by the hon. Member for South Staffordshire—might consist of.
  Part of the Government's competition policy is the regulation of mergers. The principal provisions for the control of merger in the UK are contained in the Fair Trading Act 1973.
  Mergers qualify for investigation under the Fair Trading Act if they either pass an assets test—if more than £70 million of assets are being acquired—or a share-of-supply test. The latter applies if a share of 25 per cent. or more in the supply of a particular good or service in the United Kingdom is created or enhanced.
  Under the Act, the independent Director General of Fair Trading advises the Secretary of State for Trade and Industry whether qualifying mergers should be referred to the Competition Commission for full investigation; the Secretary of State then decides whether to refer or not. The Commission investigates whether a merger is against the public interest and reports its conclusions to the Secretary of State. If the commission concludes that a merger may be expected to operate against the public interest, the Secretary of State may prohibit the merger, allow it to proceed subject to conditions or allow it to proceed unconditionally. There are no powers to block or impose conditions on non-newspaper mergers unless the commission reaches an adverse finding.
  As I said earlier, the proposed acquisition of Wolverhampton and Dudley is being considered by the Office of Fair Trading. It might be useful, therefore, if I explain in a little more detail the analysis that the OFT undertakes. Where a merger qualifies for investigation under the Fair Trading Act, in the first instance it is the officials of the DGFT who undertake an analysis of the merger. The main aim of their evaluation of a merger is to establish its potential effect on competition, although other possible public interest issues are assessed where they may be relevant.
  Ever since the monitoring process was first introduced in 1965, a primary concern of the reference policy of successive Governments, Conservative or Labour, has been the control of mergers that would have an adverse effect on competition in the United Kingdom. It is the policy of this Government to refer merger cases to the Competition Commission for further investigation primarily on competition grounds.
  It is open to the DGFT and to Ministers to consider other issues, which can be broadly categorised as public interest issues and could include, for example, the effect on employment, regional development, or national security. As the DGFT's own published guidance states, however, it would only be in exceptional circumstances that such considerations might be a decisive factor. The primary purpose of our merger control policies is to consider and, if necessary, block or amend those mergers that are identified as having adverse effects on competition in markets.
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  As I am sure the hon. Member for South Staffordshire will appreciate, no two merger cases are identical, but the DGFT's assessment follows a similar pattern. In the first place, he will identify the markets in which the parties to the merger are involved. Where markets directly overlap, there is the most obvious possibility that there might be a reduction in competition, but competition issues may also arise where the merger involves markets that are linked vertically—where the parties are involved in different stages of the production or supply of the same goods or services.
  Secondly, the structure of the markets affected by the merger is analysed so that the likely effects of the merger on the nature and degree of competition in those markets that are relevant can be assessed. Factors that may be taken into consideration include the extent and impact of any barriers to market entry and the buying power of customers. The judgment that the DGFT then makes is whether the merger would give rise to a degree of market power that would allow the merged company to raise prices or reduce quality to the detriment of its customers, or to operate in some other way that could be against the public interest.
  Once the OFT has assessed the merger, the DGFT advises the Secretary of State whether the merger should be referred to the Competition Commission for further investigation. I listened to what the hon. Member for South Staffordshire and my hon. Friend the Member for Wolverhampton, South-West said in this regard. In October last year, my right hon. Friend the Member for Tyneside, North (Mr. Byers)—the then Secretary of State—announced that he had decided to accept the DGFT's advice on reference in all but exceptional cases. This remains the Government's policy.
  Such exceptional cases are not expected to arise often. It may be appropriate for Ministers to intervene, for example, where a merger raises national security issues or where there is a material change after the submission of the DGFT's advice, or where the advice of the DGFT conflicts with the views of sectoral regulators.
  Should the Secretary of State decide, in the light of the DGFT's advice on a merger case, to refer it to the Competition Commission, the commission will assess whether the merger will operate against the public interest. The Fair Trading Act requires it to take into account all matters that appear to it to be relevant in the circumstances in determining whether a merger operates or may be expected to operate against the public interest.
  With that background in mind, I will deal briefly with the case raised by the hon. Gentleman. Pubmaster is a pub landlord with about 2,000 pubs throughout England and Wales. Its proposed acquisition of the Wolverhampton and Dudley was notified to the OFT in June. The merger is still being assessed by the OFT and the DGFT has not yet advised Ministers whether it should be referred to the Competition Commission for further investigation. In view of the Secretary of State's role as statutory decision maker, I am sure that the hon. Gentleman will appreciate that I cannot comment on the substance of the case.
  The OFT has issued a public invitation for third party comments on the merger. I will, of course, ensure that the OFT is aware of the views that the hon. Gentleman and my hon. Friends have expressed today. If anyone has any comments that they wish to make, they should contact the OFT directly as soon as possible so that their views may

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  be taken into account in the consideration of the case and so that the DGFT can reflect them in his advice to the Secretary of State.
  Mr. David Drew (Stroud): May I remind my hon. Friend of the history? Pubmaster came into being because of Whitbread's divestment under the 2,000 tied houses rule. Is it not worth reconsidering that issue? In my area, pubs were handed over haphazardly, which led to much disagreement in the intervening time. It may be worth looking at the history to find out whether the business can be managed better in future.
  Miss Johnson: I am grateful to my hon. Friend for that intervention. I have listened carefully. I cannot respond on the particular, but it may be helpful if I set out some more general observations on the brewing industry as a whole and on competition within the sector.
  Historically, the beer sector was and remains the most important alcoholic drink industry in terms of UK production. Both consumption and production of beer have fallen in the past 10 years. Since 1989, the beer sector has seen considerable restructuring in the wake of the beer orders of 1989. The number of national brewers has reduced from six to three and the break-up of large, national brewer-owned pub estates has given rise to independent pub companies such as Pubmaster.
  The UK brewing industry was referred to the Monopolies and Mergers Commission for investigation in 1986. That investigation resulted in measures, known as the beer orders, being taken to weaken the links between brewers, especially large national brewers, and pubs. The orders are the Supply of Beer (Tied Estate) Order 1989 and the Supply of Beer (Loan Ties, Licensed Premises and Wholesale Prices) Order 1989.
  The tied estate order required national brewers owning more than 2,000 pubs to release from tie half the pubs they owned in excess of that number by 1 November 1992. It also gave the national brewers' tied tenants the right to serve a guest beer and source wines, spirits and soft drinks from any supplier of their choice from 1 May 1990. The loan ties order enabled recipients of brewers' loans to terminate them without penalty on giving three months' notice, required brewers to publish wholesale price lists for their beers and prohibited brewers from imposing restrictions on the future use of licensed premises when they are sold.
  The Office of Fair Trading monitors the brewing and pub industries closely and investigates any suspected anti-competitive practices, but structural changes in the industry such as the closure of breweries, or contractual matters such as the treatment of tied tenants by breweries and pub chains, cannot be dealt with under competition law.
  There have been major developments in the industry since 1989, including the growth of pub chains as a counterweight to the market power of the large national brewers. The DGFT announced a review of the beer orders on 14 January 2000 and submitted his report to the Department last summer. He recommended the retention of some parts of the beer orders: the provisions relating to loan tie agreements, the prohibition on refusing to supply beer for resale and the requirement to publish wholesale prices. He recommended the removal of the remainder—the cap on the size of brewers' tied estates,
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  the requirement on large brewers not to tie drinks other than beer, the guest beer provision and the ban on brewers preventing a pub from continuing to be used as a pub when sold—because they were no longer needed.
  In his response to the DGFT's recommendations, the then Secretary of State said that the beer orders were radical and necessary in their time but that, more than 10 years on, the market had changed and some of them had now served their purpose. He agreed, in particular, with the DGFT's recommendation that the 2,000 cap on the number of pubs that a brewer can own should be revoked.
  There is no doubt that the introduction of the cap in 1989 encouraged the subsequent major growth and development of retail pub chains by forcing on to the market 11,000 divested brewers' pubs. In that sense, the beer orders have served their purpose in that the cap has been instrumental in creating the market power of the retail pub companies, which is now ranged against the national brewers. Moreover, it is right that the cap should go because, as the DGFT said in his report, it is restricting the growth of those larger regional brewers that want to continue to brew.
  Competitive changes in the beer industry are also affected by individual decisions on merger cases. Such cases are considered on their merits. On occasions, mergers raise competition concerns that justify a reference to the Competition Commission—for example, Bass and Carlsberg-Tetley in 1997, Whitbread and Allied Domecq in 1999 and Interbrew and Bass last year. On other occasions, competition concerns can be remedied by undertakings in lieu of a reference, as was the case for Scottish and Newcastle and Greenalls, and the Punch Group and Allied Domecq in 1999. Other transactions raise no competition concerns and are cleared, such as the merger between Grand Pub, Inntrepreneur and Spring Inns in 1997, or Wolverhampton and Dudley's acquisitions of Marston, Thompson and Evershed and of Mansfield Brewery in 1999.
  As with all these cases, I can assure hon. Members that the merger that we are discussing today will be considered on its merits by the Secretary of State in the light of the advice of the Director General of Fair Trading and, in undertaking this consideration, the competition effects of the merger will be the key issue.
  Sir Patrick Cormack: I intervene because we are not so time-constrained as usual in Adjournment debates. I am grateful for what the Minister has said. Will she give an absolute assurance that the social impact will be taken most seriously into account, as well as all the other factors?
  Miss Johnson: I have already indicated some of the factors that can be taken into consideration, including employment issues. I cannot give him an on-the-spot undertaking on the points that he has raised, but I can assure him that these things will be properly considered. Perhaps that is the assurance that he seeks. I cannot comment further on these matters due to the nature of the consideration that Ministers need to give to them. I am sure that the hon. Gentleman will accept that. However, I hope that what I have said has shed some further light on the situation.
  Question put and agreed to.
  Adjourned accordingly at twelve minutes to Seven o'clock.