Commons Sitting of 10 June 2002

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  HOME DEPARTMENT
  The Secretary of State was asked—
  HOME DEPARTMENT

    Parenting
    Mr. David Kidney: What steps his Department is taking to establish local schemes for the promotion of positive parenting. [57044]
    The Parliamentary Under-Secretary of State for the Home Department (Hilary Benn): As well as supporting parents through Government initiatives such as sure start, the Home Office is currently funding a wide range of projects across the country by means of the family support grant. We are also funding parentline plus, a national 24-hour telephone service that gives advice and support. To date it has helped some 400,000 parents.
    Mr. Kidney: I thank my hon. Friend, and congratulate him on his new position in the Government.
    Does my hon. Friend accept that if all parents raised all children with love, giving warm and responsive care and setting clear boundaries, future generations would be more emotionally mature, responsible and self-confident? Are there not also great financial gains to be made from additional educational needs provision, health and social services and law enforcement? Is there not a case for universal provision of information, advice and classes for all parents, from a range of providers, promoting positive parenting?
    Hilary Benn: I very much agree with my hon. Friend's comments about the basis of good and effective parenting, and particularly with what he said about love, support and encouragement. Those are the most important things that we, as parents, can give our children. I also entirely accept the need to ensure that there are places throughout the country to which parents can go for help and advice. That need not be seen as a mark of failure; there are times when we may all need some support and encouragement. We must put across the idea that asking for help and advice is something that all parents may need to do at some time during their lives as parents.
    Peter Bottomley: I, too, congratulate the Minister on his new duties.
    578
    Given that a third of all male children will be convicted of a serious criminal offence at some stage, that more than that will become teenage smokers, and that about 40 per cent. will be involved in a conception ending in a termination—all those being issues of family confidence and competence—will the Minister try to encourage broadcasters to devote as much attention to family functioning as they give to cooking, cars and gardens?
    Hilary Benn: I can only agree with the hon. Gentleman. Indeed, I will go so far as to suggest that Members on both sides of the House would welcome a little less focusing by broadcasters on dysfunctional families and a bit more encouragement for functional families.
    Mr. Hilton Dawson: I welcome my hon. Friend to his post, and wish him well.
    Is not positive parenting—through parents being given the tools with which to manage their children positively and effectively, without physical punishment—the key to dealing with so many problems in society, especially delinquency and antisocial behaviour? Should we not do far more of that, rather than locking up children in prison?
    Hilary Benn: My hon. Friend has raised an important point about the need for positive encouragement for children. As he will know, and as I can attest from my experience as a constituency Member, there are occasions when the behaviour of young people causes great distress and havoc to local communities. My constituents come to me in distress, and ask what we will do to protect them from the consequences. We also know, however, that such behaviour is strongly associated with problems in family upbringing and poor literacy skills. Those are the issues that we must address if we are to reduce the likelihood of reoffending by those young people.
    Mr. Oliver Letwin: I join others in congratulating the Minister, who certainly suffered no lack of positive parenting.
    Is the Minister aware of the work of Dr. Stephen Scott of the department of child psychiatry at King's college London, which suggests that 80 per cent. of children who show behavioural problems by the age of five go on to develop more serious antisocial behaviour? Does the Minister know of the enormously important work being done by groups such as Befrienders—whom I recently visited—the Parent Network, the child development programme, and the child and adolescent psychiatry unit at the Maudsley hospital?
    Is it not very sad that despite the sure start initiative, which the Minister mentioned, there is generally no response whatever in the United Kingdom to a child who shows behavioural problems at the age of five, and that all too often we wait until criminality emerges before we do anything?
    Hilary Benn: I thank the hon. Gentleman, and my hon. Friend the Member for Stafford (Mr. Kidney) and the hon. Member for Worthing, West (Peter Bottomley), for their kind references to my appointment.

    579
    I was not aware of the research mentioned by the hon. Member for West Dorset (Mr. Letwin) until I read a very good speech given to a conference recently by my right hon. Friend the Home Secretary, in which he too referred to it.
    I agree with what the hon. Gentleman said about the need to provide support and help when children are at an early age, and we can identify those who are at risk. That is the purpose of sure start, which applies to children from birth until the age of three; but the hon. Gentleman is right to say that we must do more, and intervene early to prevent small problems from becoming larger problems later.
    Mr. Letwin: I must read the Home Secretary's speech, as I am about to make one myself on the same subject. I wonder whether he mentioned the conclusions of the Rowntree Trust's study, which I think is called "Prevention through Family and Parenting Programmes". It concluded that successful programmes were those based on United States examples. Is it not a national disgrace that we have nothing remotely comparable to the Headstart programme, which has taken care of 15 million children with early behavioural problems and has mobilised vast resources in the voluntary sector and local communities as well as nationally? Does the Minister agree that we need to emulate that if we are to begin to tackle youth crime?
    Hilary Benn: Yes, I do. As the hon. Gentleman knows, the sure start programme is modelled on the American Headstart programme, which was initiated by the Johnson Administration in the United States in the 1960s. Long-term studies of the Headstart programme demonstrate the benefits of such intervention. I have not read the research to which the hon. Gentleman refers. I shall add it to the very large pile of reading on which I am currently engaged in my new responsibilities.

    Asylum Accommodation Centres
    Mr. Mark Lazarowicz: If he will consult Scottish Ministers on the provision of services within accommodation centres for asylum seekers which may be located in Scotland. [57045]
    The Minister for Citizenship and Immigration (Beverley Hughes): As my hon. Friend knows, the operation of accommodation centres is a reserved matter. However, my officials are working closely with the Scottish Executive. My hon. Friend will also know that clause 34(1) of the Nationality, Immigration and Asylum Bill requires us to consult Scottish Ministers prior to establishing an accommodation centre in Scotland.
    Mr. Lazarowicz: I congratulate my hon. Friend on her new post in Government and thank her for her answer, which is helpful. As she pointed out, the proposals going through Parliament specifically provide for consultation with the Scottish Executive on the provision of accommodation centres, but there is no requirement for consultation with the Scottish Executive on education. Given that asylum matters are reserved to this Parliament but that education is a devolved matter, does my hon. Friend accept that it may be more consistent to make
    580
    specific provision for consultation with the Scottish Executive on education, not just on the provision of centres?
    Beverley Hughes: The Scottish Executive have agreed that education in accommodation centres is part of a specific regime for asylum seekers and that it is therefore properly a reserved matter, but we recognise that to achieve our objectives—good quality education on-site, and consistent education for children in accommodation centres, wherever they are in the United Kingdom—we need to work with the grain of the practicalities and structure of education in Scotland. That is why officials have been working closely with colleagues in Scotland, especially on education matters. Those discussions will continue. Although there will not be a specific requirement to consult on education, we accept that in the provision of accommodation centres we need to consult specifically on education provision as we go forward.
    John Barrett: I, too, congratulate the Minister on her new post. Does she agree that, as well as consulting Scottish Parliament Ministers, it is important that the Home Office has discussions with the local authority, the wider community and organisations with experience in the sector, such as the Refugee Council, before any final decisions are made on locations in Scotland?
    Beverley Hughes: I thank the hon. Gentleman and also my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) for their welcome.
    If a planning notification in relation to the proposal is eventually made, we will want the widest consultation possible. We have already made that clear. We will be taking the advice of the planning authority about how that should best be done, but wherever planning notifications are laid, we intend to consult local people as well as the local authority and others.
    Mr. Tam Dalyell: Given that the Minister wants to work with the grain, as she put it, of Scottish education, is there any pressure on Scottish education to act in the same way as the Home Secretary would wish to act in England?
    Beverley Hughes: As I have already made clear, we want to ensure that children who are in accommodation centres, wherever those centres may be, have the same standard of education as children elsewhere, and that there is a consistent standard in accommodation centres across the UK. We will work with whoever is providing those services in accommodation centres in Scotland or elsewhere to ensure that that happens.
    Mr. Humfrey Malins: May I congratulate the Minister on her new post and wish her well? I recall that we had some happy times together on the Home Affairs Committee.
    As the Minister discusses with Scottish Ministers key issues such as educating children in or outside accommodation centres, the size and location of such centres, and the need for a statutory duty to provide legal help on-site, does she think that those Ministers will agree with the Government's proposals, or with the dozens of

    581
    her own Back-Bench colleagues and all the respected non-governmental organisations, who oppose her totally on many of these matters?
    Beverley Hughes: I thank the hon. Gentleman for his words of welcome. He is widening the issue, and as he knows, in the next two days some of the matters that he raises will be debated more fully during the remaining stages of the Nationality, Immigration and Asylum Bill.
    We welcome the fact that the hon. Gentleman and his colleagues have in no way objected to the principle of accommodation centres. It is clear that a range of views exists on size, location and so on. A full debate took place in Committee, and in the past week I have studied Hansard and read all the points of view that were expressed in Committee. They make riveting reading, and those debates will continue tomorrow. As we move forward and establish accommodation centres, we want to ensure that we can trial a number of variables, and the Home Secretary has already given a commitment to do that in respect of size. If such variables prove to be the way forward, we want to ensure that we can learn from the trials about the best way to implement them.

    Police Resources (Greater Manchester)
    Mr. Graham Brady: If he will make a statement on police resources in Greater Manchester. [57046]
    The Secretary of State for the Home Department (Mr. David Blunkett): It is good to be back, Mr. Speaker. [HON. MEMBERS: "Where have you been?"] To the Palace and the Mall. The increase in the policing grant for Greater Manchester is £9.5 million higher this year, and a further £5 million has been allocated for the security and policing of the Commonwealth games. There has been an increase of £2.7 million in available capital spending for equipment and technology—an increase of more than 40 per cent. on the previous year. Following the Budget, I am today announcing an increase of £2.4 million for policing and security in Greater Manchester, as part of a wider announcement nationally. Taken together with the crime fighting fund, the overall increase for this year is 6.9 per cent.
    Mr. Brady: It would be wrong for me to take too much credit for the announcement that the Home Secretary has just made. However, he will be aware that the additional cost of policing next month's Commonwealth games in Manchester will be in excess of £8 million. The £5 million that has already been announced accounts for less than two thirds of the cost, and even if we take into account the £2.4 million that he kindly announced in advance of my question, we are still some way adrift of the additional cost. Which other budgets does he expect Greater Manchester police to cut as a result of his refusal to fund in full the policing of the games?
    Mr. Blunkett: It is certainly true that the estimate provided by Greater Manchester police is higher than the 63 per cent. of the cost that we envisage finding, but that figure is £1 million higher than the formula that we inherited in 1997. On the hon. Gentleman's specific
    582
    question about which budget will be cut, we expect Greater Manchester police to find the additional £3 million from the £7 million that it has in reserve.
    Mr. Tony Lloyd: I refer my right hon. Friend to the situation in my constituency and in other inner-city constituencies. We have a combination of low-level but extremely aggravating crime that destroys the quality of life in those communities, and—as he knows—a serious problem with murder. In considering future funding, will he take into account the fact that each murder costs about £1 million to investigate, and that peculiar circumstances apply in Greater Manchester? Perhaps he can also say whether he will ensure that we get value for money from Greater Manchester police and the chief constable, so that we can be certain that Greater Manchester gets the policing that it deserves.
    Mr. Blunkett: I have been interested in the initiative taken in Greater Manchester and in the display of public disquiet and the commitment by the people of Manchester—particularly in the south of Manchester—to joining the police in tackling this serious issue. I was pleased to discuss with my hon. Friend how best to invest in, first, preventing and then overcoming the difficulties faced. We need to take into account the size of the challenge faced in Greater Manchester. On a slightly lighter note, I am sure that my hon. Friend would not wish us to allocate funds according to the number of homicides committed. I shall have to consider how best to balance those two factors.

    Violent Crime
    Mr. George Osborne: What targets he has for reducing levels of violent crime. [57049]
    The Minister for Policing, Crime Reduction and Community Safety (Mr. John Denham): The Government are working to reduce all violent crime. The 2001 British crime survey showed that violent crime overall was down by 19 per cent. in 2000 as against 1999. Last year, street crime rose in some of our large towns and cities. We are working with 10 police forces and other agencies in those 10 areas to tackle street crime. The earlier announcement of resources from my right hon. Friend the Home Secretary includes details of an allocation of £27 million across those 10 forces today to enable them to tackle street crime.
    Mr. Osborne: I noticed that the Minister did not repeat the Prime Minister's target of reducing street crime by the end of September. To clear up the confusion that has followed since the Prime Minister blurted that out at Prime Minister's questions seven weeks ago, will the Minister confirm that the Government expect street crime to fall in absolute terms by the end of September?
    Mr. Denham: I have made it clear what we want to achieve. Street crime rose last year. First, we must reverse that increase, and then we must deliver long-term and sustainable reductions in street crime.
    Ms Julia Drown: What plans are there to tackle the violent crime of rape? It is nearly two years since the publication of the sex offences review,

    583
    which suggested changes to the current defence of an honest but unreasonable belief in consent. When can we expect legislation to get that wholly outrageous defence off the statute book?
    Mr. Denham: A number of aspects of the matter are currently under consideration, and in the near future we hope to make announcements that will be of interest to my hon. Friend. At the last Home Office questions, my right hon. Friend the Home Secretary was asked about the joint report into the prosecution of rape. He said then that the Home Office would be leading a review by officials across Government Departments of how to respond to the low level of successful rape prosecutions. That work will be completed within the month.
    Dr. Vincent Cable: Is it not the case that a growing amount of violent street crime involves guns? How can the Minister justify a situation in which an armed police officer who opens fire—even in self-defence—at an armed criminal is automatically suspended from all police operational duties for a long period of time, usually a minimum of 18 months? Is that not enormously wasteful and demoralising to some of the most highly trained and courageous officers in the police?
    Mr. Denham: The hon. Gentleman raises an important point. Thankfully, it is still the case that the use of firearms by the police in this country occurs on a relatively limited number of occasions each year. It has always been accepted by the police service that there should be proper procedures when someone is injured as a result. The hon. Gentleman's important point is how long it should take to satisfactorily conclude any investigation. That is a matter that I shall look into.
    Mr. Andrew Miller: I welcome my right hon. Friend's response to the question. Does he agree that violent crime on the roads needs to be looked at carefully? We must drive forward our targets in that regard. I welcome also the speech of my noble Friend Lord Falconer last Thursday at the RoadPeace conference. Victims were at the heart of that speech. When are we likely to see a response to the sentencing review in that respect?
    Mr. Denham: I shall write to my hon. Friend. I do not know precisely when the sentencing review will be completed. I am sure that everybody acknowledges the underlying point that he raises, as many of those maimed by dangerous drivers—and the relatives of those killed in road incidents—feel unfairly treated by the present system.
    Mr. Dominic Grieve: May I take the Minister back to his reply to my hon. Friend the Member for Tatton (Mr. Osborne)? Is the Minister unwilling to endorse the Prime Minister's comments? Less than 48 hours later the Lord Chief Justice said:
    "you can have initiative after initiative … but if you don't touch the basic problems, you will never achieve public confidence".
    Is not that a better approach? Part of the problem is that the Government have contributed to making the police's task of tackling violent crime more difficult by introducing such restrictions as best value, which has led to greater bureaucracy, and the new stop-and-search procedures,
    584
    which will also add considerably to bureaucracy. Would it not be better to give adequate support to the police to carry out that task and leave alone the sort of gimmicks that the Prime Minister came up with?
    Mr. Denham: I presume that the hon. Gentleman includes in his attack on gimmicks the actions taken by the Metropolitan police in their safer streets campaign which, in its eighth week, has already delivered a fall in street crime in the target boroughs of 21 per cent. compared with last year. In those areas that we have targeted across the country we will stop the rise in street crime, then cause levels to fall and take the measures necessary to sustain that fall. We will do that through practical support for the police—first, by delivering record and rising numbers of police officers; secondly, by ensuring that they are supported by the rest of the criminal justice system; and thirdly, by introducing, as we have done in the past few weeks, video identity parades to cut bureaucracy and time-wasting. It is those practical measures and others, undertaken in partnership with the police, the criminal justice agencies, education and local communities, that will enable this country to get on top of street crime.

    Crime Reduction (Devon and Cornwall)
    Linda Gilroy: If he will make a statement about crime reduction in Devon and Cornwall in the last 12 months. [57051]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Michael Wills): In the most recently published recorded crime figures, in the 12 months to March 2001, crime in Devon and Cornwall fell by 7 per cent.
    Linda Gilroy: I thank my hon. Friend for that answer and welcome him to his new position. If he is not already aware of the role that crime and disorder partnerships have played in the drop in crime figures, I recommend that he investigates them. Does he share my concern that the advent of crack cocaine to the streets of Plymouth in the past year threatens to reverse all that good work? Will he pay early attention to the bid for a pilot project for a seamless health-based approach to tackling drug crime and give us his opinion sooner rather than later?
    Mr. Wills: I thank my hon. Friend for her kind words of welcome. Crack cocaine is a problem in Plymouth and we share her concerns. We guaranteed funding of nearly £500,000 from the communities against drugs programme in 2002–03 to tackle drug-related crime. As she is aware, the Devon and Cornwall constabulary has initiated Operation Ovidian in response to the emerging crack cocaine problem in Plymouth and throughout the area covered by the force.
    We are aware of the funding bids that have been submitted to the criminal justice reserve fund and the recovered assets fund. The Under-Secretary who has responsibility for drugs policy, my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth), stated in his letter to Superintendent Isaac that Home Office officials have made an initial assessment of the bid, but

    585
    no formal decision has yet been made. Bids are being considered by a Cabinet Committee and we expect to announce the successful bids shortly.
    Mr. Gary Streeter: Given the undoubted link between drugs and crime and the vital need for those who feed their heroin habit by committing crime to have access to treatment as soon as they wish, what does the Minister propose to do about the waiting time for access to detox and rehabilitation treatment in Plymouth, which is currently 65 weeks?
    Mr. Wills: The hon. Gentleman makes some valid points. Until 15 months ago, no treatment was possible, but we now have a national treatment agency and waiting times are falling. He is right to say that we must take action to tackle the problem, and that is what we are doing. We must deal with the problem across the range and choke off the supply, which is what my hon. Friend the Under-Secretary is doing. He is liaising with the Jamaican authorities to make sure that we tackle the problem of crack cocaine.
    The hon. Gentleman is right about the need to treat addicts, which we are doing. We must also educate our young people about these matters, which is why we have drugs education programmes in schools. Some 93 per cent. of secondary schools now have such programmes in place.

    Street Crime
    Mr. Win Griffiths: If he will make a statement on the steps he is taking to reduce crime on the streets. [57052]
    The Secretary of State for the Home Department (Mr. David Blunkett): We are undertaking an end-to-end review of the criminal justice process, including the development of more training, more police officers, the introduction of community support and street warden provision to back that up. We have provided extra resources this year for police technology and investment in closed circuit television. Other measures taken include the premium Crown Prosecution Service, the establishment of 67 specialist street crime courts, the availability of the video ID system referred to earlier, the extension of electronic tagging and the use of intensive supervision, including bail conditions. In addition, we have introduced the Mobile Telephones(Re-Programming) Bill. All these measures are enabling us to bring down the street crime figures, which worried everyone earlier this year.
    Mr. Griffiths: I thank my right hon. Friend for that reply. However, I am sure that he is aware that old people in particular still fear going to their local shopping centres, especially at night, because of the youths who wander about aimlessly and sometimes threaten them. Will my right hon. Friend ensure that even more CCTV cameras are made available? The residents of the Wildmill estate in Bridgend greatly appreciate that the number of officers patrolling the streets has doubled, but they would still like to see CCTV cameras in the shopping precincts.
    Mr. Blunkett: I thank my hon. Friend for welcoming the doubling of the number of officers doing the job out there on the street.
    586
    The use of CCTV has proved extremely popular against the predictions that were made when the programme started. There is no doubt that the quality and use of CCTV are crucial, so that the reassurance that it provides can in turn ensure a conviction when people are captured on the video screen. The combination of the use of CCTV and video ID parades, the emphasis that we are placing on pressing down on antisocial behaviour by giving it a focus at national policy level, and the encouragement that we have been giving the police to respond positively to any kind of intervention at that level will provide people, young or old, with the reassurance that they need. It is a fact of life that although elderly people are the least likely to be attacked in the street, they are the most likely to fear such an attack.
    Simon Hughes: I am sure that the Home Secretary agrees that to reduce crime, we need to deal with the causes of crime, as well as with the criminals. After the highly successful past few days in which the country has seen success in the cricket test against Sri Lanka, in the world heavyweight title match in the United States, and against Argentina on Friday, does the Home Secretary accept that bringing youngsters from primary school age upwards into sport—not just as participants, but as competitors—is as likely as any other activity to prevent them from getting into crime? Can the Home Office work with the Departments for Education and Skills and for Culture, Media and Sport to ensure that we give young people, from the age of five to 25, constructive alternatives to crime so that they can do positive things instead of being told only what they cannot do, which too often appears to be the Government's message?
    Mr. Blunkett: "All Our Futures", the work of the Department for Culture, Media and Sport, the splash schemes that we are introducing and the social cohesion programme for the summer are all very valuable, but I accept what the hon. Gentleman says: a win against Nigeria on Wednesday would do wonders for street crime, social cohesion and youth offending.
    Glenda Jackson: I welcome the measures that the Government have already introduced to reduce street crime, but I feel sure that my right hon. Friend would agree with many of my constituents who welcome technological advances but put their faith, as I do, in the deterrent power of a uniform. I sincerely hope that both he and the police will accept that bobbies on the beat can do a great deal to reduce crime and, more importantly, the fear of crime.
    Mr. Blunkett: We are all very pleased to see my hon. Friend back in the Chamber and we wish her well. I agree with her entirely: 4,500 extra uniformed police on our streets over the past two years, more than 1,100 of them in London, have been very welcome. That visible presence, combined with intelligent and community-based policing, will make the difference.
    Mr. Nick Gibb: Given the success in reducing street crime of the

    587
    experiment in Lambeth in which police resources were diverted from traffic control to patrolling the streets, is it not time to extend the policy nationwide?
    Mr. Blunkett: It is important to get the balance right between the various hot spots and difficulties at any one time, but the hon. Gentleman will realise that it is an operational decision, for the Commissioner in the case of the Metropolitan police, and for chief constables elsewhere. I respect that fact and know that they carry responsibility as well as power, and I answer the questions at the Dispatch Box every month. The honest truth is that if we can manage to get people focused where the greatest danger is we will not only provide reassurance but ensure that the police get the respect and support that they need, in the end, in order to drive down crime.
    Andy Burnham: Will my right hon. Friend join me in congratulating Greater Manchester police and Wigan council on last week's successful introduction of a drinking ban in Leigh town centre, which I believe will reduce street crime in Leigh? Is he aware of the belief of that force and others that, under the wording of the Criminal Justice and Police Act 2001, they are unable to seize unopened bottles and cans from under-age drinkers? Will he consider amending the wording to enable the police to bear down effectively on under-age drinking and youth crime?
    Mr. Blunkett: I do indeed congratulate Greater Manchester police on that initiative, and I hope that it works well over the summer, not least in the few weeks ahead during the World cup. There is a real issue here, and we have asked the police to provide us with chapter and verse on the extent of the problem with unopened alcohol containers. If there is a problem, we will be prepared to include measures to put it right in the sentencing and criminal justice Bill for next Session. We all want to ensure—I am sure that this goes across political parties—that we reverse as quickly as possible, at the request of those on the ground, any anomalies that have been built in.
    Mr. James Paice: I pay tribute to the Metropolitan police for the way in which they rose to the immense challenge of maintaining the security of the streets of central London during the jubilee celebrations.
    The Home Secretary's desire to reduce street crime will be shared by everyone in the House and outside, but does not he understand that there is widespread concern in the police that the powers that he is seeking to be able to dictate precisely the contents of any action plan for improvement will mean that Ministers in Whitehall will be usurping the local knowledge of chief constables in their task of reducing street crime? The objective may be shared by everyone, but the method of achieving it should be the responsibility of chief constables and police authorities, and not interfered with by any Minister of any political party in government. There is wide concern in the police force and police authorities that he is seeking to reintroduce centralising powers.
    Mr. Blunkett: I agree with the beginning of the hon. Gentleman's contribution: there was exemplary, light-touch, sensitive and good policing.
    588
    On the hon. Gentleman's second point, there would be great, justified fears if his statements this afternoon were correct. We are asking police chiefs to draw up action plans—we make no apology for that, nor for the fact that we shall be able to comment on the plans. We make no apology for asking the police to consider readjusting their plans in the context of the overall national plan—for instance, if they are giving only low-level attention to antisocial behaviour, which most Members regard as a scourge that we want to be tackled.
    We are not seeking powers to dictate the action plans, to overturn them or in any way to take hold of operational policing. The sooner we debate what we really disagree on, the more we shall be respected by the public.
    Fiona Mactaggart: My police service experiences real difficulties in ensuring that we get enough police officers on the streets, because it trains everybody else's police officers. Thames Valley has provided officers to every other force in the United Kingdom. Will my right hon. Friend think about a system of transfer fees for police officers, so that police authorities that train young officers have the resources to train new officers, because everyone else has nicked the ones that we have trained?
    Mr. Blunkett: I have a lot of sympathy with my hon. Friend. The level of crime and the difficulties experienced in Slough and some other parts of Thames Valley cause problems and the force has been vulnerable as a result of officers moving out of the area owing to the provision for recruitment in the Metropolitan police area. However, I am pleased to say that, as part of the provision of extra resources, Thames Valley will receive an extra £1.5 million this year. Taken with the flexibility in the new police negotiating powers, such as the use of priority payments, Thames Valley will be able to build on its success and to hold on to the trained police officers who are so crucial in my hon. Friend's area.

    Police (Early Retirement)
    Miss Anne McIntosh: If he will make a statement on early retirement from the police force. [57053]
    The Minister for Policing, Crime Reduction and Community Safety (Mr. John Denham): We want to ensure that the skills and expertise of experienced police officers are retained by forces for as long as is practicable. The level of ill-health early retirement has fallen under the Government, but it is still important to ensure that we resort to it only where necessary. We therefore welcome the fact that the Police Negotiating Board has agreed in principle a fairer and more consistent approach towards early retirement due to ill health.
    Miss McIntosh: Will the Minister join me in congratulating North Yorkshire police, especially the chief constable, on reducing the number of officers applying for early retirement through ill health? Does he agree, however, that a pensions timebomb is ticking? North Yorkshire police cannot be unique in having more retired officers being paid out of the police budget than active operational officers. Earlier this year, the Home

    589
    Secretary promised a statement and proposals on the funding of police pensions. When might we have that statement?
    Mr. Denham: I hope that we shall introduce proposals on pensions, in line with those set out in the White Paper, as soon as possible. One of our aims was to try to ensure that police forces are more insulated from the fluctuating cost of ordinary retirements. However, it would probably be a step in the wrong direction to insulate police forces entirely from the costs of poor management or mismanagement of, for example, ill-health retirement. I welcome any moves to improve the situation in North Yorkshire, but it is a matter of fact that in the last full year—to 2001–58 per cent. of its officers retired due to ill health. That is a very high proportion indeed and one that has inevitably put a pensions cost on the people of North Yorkshire.
    Mr. Graham Allen: Does my right hon. Friend agree that many officers approaching retirement age, and indeed many women police officers, are exactly those most suited to community policing and to being bobbies on the beat? Will he therefore consider what has happened recently in the city of Nottingham? On 2 April, a community beat officers system was introduced, yet within seven weeks that decision was reversed. Will my right hon. Friend make some inquiries into why certain chief constables are not living up to the Government's rhetoric?
    Mr. Denham: As my hon. Friend has raised the matter, I shall certainly familiarise myself with the situation in Nottingham, but I have to say that the decision about exactly how to deploy the rising number of police officers is an operational one for chief constables. My hon. Friend is right to say that we want to ensure that, as the number of police officers rises, one of the key roles that they fulfil is to be visible in local communities, identifying and solving problems and tackling and reducing the fear of crime, as well as tackling crime itself.
    Tim Loughton: In the year to the end of March 2002, 82 Sussex police officers retired at the normal retirement age, yet almost as many 77—resigned early, let alone those who retired early through ill health. Why does the Minister think that is?
    Mr. Denham: The level of wastage from the police service in England and Wales has remained remarkably unchanged for a number of years at under 5 per cent. It is true that a small number of forces have shown a much higher rate of early retirement than the vast majority of police forces. That is why officials from our Department are working with those police forces to identify the reasons why and to make sure that everything is done to ensure that their performance on retention is in line with that of the rest of the police service.

    Air Weapons
    Mr. Chris Mullin: What plans he has to review the regulation of air weapons; and if he will make a statement. [57054]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): All aspects of firearms law are kept under continual review. We are determined to tackle the problems caused by the misuse of air weapons and believe that much can be done through the enforcement of existing legislation and public education. At present, we are considering advice from the Firearms Consultative Committee on how that might be taken forward. We shall also examine ways to tackle those who misuse air weapons, as we move forward with measures to combat antisocial behaviour and street crime.
    Mr. Mullin: Scarcely a week goes by in Sunderland without an incident involving an out-of-control youth and an air weapon. May I put it to the Minister that, if the bureaucratic obstacles to some form of licensing are too great, we could at least significantly raise the age limit for using those weapons? Will he think about that, please?
    Mr. Ainsworth: My hon. Friend is fully familiar with these issues. He knows that the Select Committee on Home Affairs reported on them not so long ago, and I am aware of the incidents that have been recently reported in his local press. As I have said, my response is not dogmatic; it is about being practical and proportionate to the problem. The issue is kept under review, and if we can find a way to be more effective, I am more than happy to consider it. Yes, of course I shall examine my hon. Friend's proposal, as we examined the Home Affairs Committee's proposals, but we need to be effective and to use resources as effectively as possible, and I ask him to consider the fact that those problems also need to be overcome.
    David Burnside: Could not the Minister learn from the positive experience in Northern Ireland on the registration of air rifles? Air rifles are used by parents to train children in a disciplined, secure and safe way to shoot for sporting purposes. The legislation in Northern Ireland is simple: air rifles' serial numbers and the amount of ammunition bought are listed on firearms certificates. The system is well disciplined and well policed, and it causes no problem to sportsmen and women who want to see greater regulation and secure and safe shooting for young people as they make progress through life.
    Mr. Ainsworth: I will be honest with the hon. Gentleman: I was not aware of the regulatory system as it exists in Northern Ireland. If there are lessons to be learned, we shall be more than happy to consider them. The issue has been debated a great deal, and we all understand that there is a very real problem, but we should consider how best to tackle it without unnecessarily wasting resources, while being as effective as we can in bearing down on the misuse of those weapons.
    Ms Claire Ward: My constituents are becoming increasingly concerned about young people having access to firearms. A 13-year-old boy in my constituency was shot in the face just three weeks ago, and almost lost his sight. We have had at least two exclusions from school of children found carrying these weapons into school. An urgent review is needed. Will my hon. Friend consider what controls and enforcement mechanisms exist to stop local shopkeepers selling these

    591
    weapons to young children, not just to those who are under-age but to those who clearly are not entitled and will not have a sensible use for the weapons?
    Mr. Ainsworth: In response to my hon. Friend and other Members who have raised this issue, I say that I shall consider it again and talk to the police about how we can be as effective as possible in bearing down on the misuse of these weapons. I give that guarantee; I do not dismiss the concern. Clearly, we want to be as effective as we can, and I assure her that I will consider again the issue of age. This is not the first time, however, that these issues have been examined. There are barriers, but we should give constant consideration to whether we can improve in this area, precisely because of the points that she raises about the distressing and dangerous circumstances that arise repeatedly up and down the country.
    Bob Russell: The Minister has just referred to instances up and down the country, and I urge him to follow the recommendations of the Home Affairs Committee, which have been repeated today. These incidents do not happen only in Sunderland. On Friday, in Colchester, which has a relatively low crime rate and is normally a peaceful town, a 12-year-old boy was attacked in the street, robbed, and shot with an airgun. Will the Minister explain what possible justification there is for teenagers roaming streets in urban neighbourhoods with airguns?
    Mr. Ainsworth: There cannot be a justification for teenagers roaming the streets with airguns. There is no justification, and it is illegal for them to do so. The hon. Gentleman should be aware of that. The main thrust of the Home Affairs Committee report was a desire to introduce a registration scheme. That is not opposed by Ministers, but there are questions about the practicalities, and the police have raised issues about the effective use of resources and the burden that running an effective registration scheme would place on them. I assure the House that those issues can be considered and that they ought to be kept under review. The hon. Gentleman should not pretend to the House or anyone else, however, that the kind of behaviour to which he has just referred is legal in this country, and that action should not and cannot be taken against people who behave in that way.
    Joyce Quin: May I support the point made by my hon. Friend the Member for Sunderland, South (Mr. Mullin), and draw the Minister's attention to the case of my constituent, Nicola Diston, who has permanently lost the sight of one eye as a result of being attacked with an air weapon? I urge the Minister to consider the definition of weapons that should come under a licensing scheme. At the moment, many air weapons that are capable of causing permanent damage are outside controls, should not be outside controls, and should be brought under regulation as soon as possible.
    Mr. Ainsworth: I am aware of the case. Indeed, my right hon. Friend has spoken to me, and seeks a meeting with me on this issue. She is not right to say that these weapons are outside controls, but she is absolutely right that they are outside the more stringent controls that are placed on more powerful weapons. We can consider and
    592
    discuss those issues, which have been raised before, and there are problems that we would need to overcome. I am happy to talk to her about how we can be more effective in this area.

    Retail Crime
    Barbara Follett: What representations his Department has received from the British Retail Consortium about tackling crime against retailers. [57055]
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): We appreciate the input that the British Retail Consortium makes to tackling retail crime. We have received a number of representations from the consortium in the past year and we are in regular touch with it at both ministerial and official level.
    My hon. Friend does a lot of work for and on behalf of the consortium, so she will know that the Home Office is providing £170 million for closed circuit television initiatives, £50 million for communities against drugs and £15 million in grants to retailers in deprived areas to enhance security. Other measures will inform retailers of how better to protect themselves against crime.
    Barbara Follett: I thank my hon. Friend for that reply and for all the work that he is doing on behalf of retailers. However, given the importance of the reduction of retail crime in Government programmes for social cohesion and urban regeneration, why is the reduction in retail crime not yet one of the official police force performance indicators?
    Mr. Ainsworth: I think that my hon. Friend knows that, after consultation with the Association of Chief Police Officers and the Association of Police Authorities, we cut the number of performance indicators. We would be loth to add to them. I think that she also appreciates that there is a problem of under-reporting of crime in this sector, and that might undermine the value of a performance indicator. However, she is right about the importance of tackling retail crime and about its connection with social exclusion and community cohesion. I assure her that we will continue to work with the consortium to bear down on the problem.
    Mr. Mark Field: My constituency contains the west end of London, one of the largest retail areas in the UK. Retailers to whom I have spoken and Westminster city council have welcomed the idea of working in partnership with the police force so that street wardens ensure that, as far as possible, retail crime is kept to an absolute minimum. Will the Minister be looking to drive that initiative forward not only in the centre of London but in other centres that are important in terms of their retail excellence?
    Mr. Ainsworth: We have found a Conservative in favour of street wardens, and I am quite surprised by that. We are looking at all kinds of issues and I hope that the hon. Gentleman will be able to support those covered by the Police Reform Bill. We are also constantly talking to the British Retail Consortium about specific issues and are keeping them under review to see how we can help.

    593
    However, there is much that retailers can do themselves, so responsibility for bearing down on retail crime does not lie all on the Government's side.

    Neighbourhood Wardens
    Martin Linton: What plans he has to give neighbourhood wardens powers to demand names and addresses and detain suspects. [57056]
    The Minister for Policing, Crime Reduction and Community Safety (Mr. John Denham): Members of street warden schemes, such as the one being set up in Wandsworth, are already able to be given local authority enforcement powers. Subject to the wish of Parliament, we intend that the Police Reform Bill will enable limited police powers, including the right to require a name and address in respect of certain offences, to be extended to wardens and others who are part of community safety accreditation schemes.
    Martin Linton: May I tell my right hon. Friend how much I welcome the fact that neighbourhood wardens started working in Clapham Junction last month? When I spoke to them on their first day at work, they said that they could certainly do with the additional powers proposed for community safety officers. If neighbourhood wardens catch a fly tipper red-handed and the alleged offender refuses to give a name or gives a false name, there is very little that they can do at the moment. If they witness an arrestable offence, they have to rely on the powers of citizens arrest. Would it not be better for all concerned if neighbourhood wardens had the same powers as community safety officers?
    Mr. Denham: I understand my hon. Friend's point. Although the important power to detain with reasonable
    594
    force that we have proposed for CSOs has currently been removed from the Police Reform Bill by the other place, it is the Government's judgment that that power should be exercised only by someone who is directly an employee of the police service rather than by someone who is an employee of a local authority. If local authorities wish to work in partnership in, for example, London with the Metropolitan police, it is open to them to provide funding for the CSOs who would be directly deployed in their local government area. I believe that the important power to detain with reasonable force should be exercised by and under the auspices of the police service, but I welcome my hon. Friend's positive comments about the impact of street wardens. They perform an important role in its own right.
    Mrs. Angela Browning: There is a further problem concerning the identity of suspects. Last week, in Exeter court, there was a case involving a paedophile who had served a custodial sentence, then, on the expiry of his licence period, changed his name by deed poll and reoffended. That caused huge problems to the police in identifying him as a suspect for the second crime that he committed. Will the Minister ensure that that loophole is closed, so that paedophiles who have served sentences cannot change their names by deed poll?
    Mr. Denham: The hon. Lady raises a very important matter. I have not read the details of the case, but it is not immediately obvious why fingerprinting and other evidence would not have identified the individual. It is essential that something as simple as a deed poll change of name should not be used to evade the proper powers of the law or of the police. If the hon. Lady would like to give me the details of the case, I shall look into it as a matter of urgency.

India/Pakistan
3.31 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw): With permission, Mr. Speaker, I wish to make a statement about the situation in India and Pakistan.
Intense diplomatic efforts and decisions made in recent days by the Governments of India and Pakistan give grounds for some optimism, and tensions have eased a little. None the less, with 1 million men under arms on either side of the line of control in a high state of readiness, the risks of a conflict remain significant. As both countries are in possession of nuclear weapons, the potential consequences for the region and for the wider world are devastating.
Let me give some brief background, then set out the action that has been taken by Her Majesty's Government, working particularly with the Government of the United States.
The territory of Kashmir has been the subject of dispute since independence in 1947. Three major wars have been fought between India and Pakistan—in 1948 to 1949, 1965 and 1971—and in 1999 there was a particularly bloody battle in Kargil on the Indian side of the line of control. The people of Kashmir have been caught in the middle of that, at a cost of tens of thousands of lives and even more people displaced. There has long been serious concern in the international community about the human rights deficit in Jammu and Kashmir and about the conduct of some elections there.
During the last decade or so, the character of the conflict has changed as a result of the incursion of armed militants across the line of control into India from the Pakistani side. A number of terrorist organisations—including Laskhar-e-Toiba, Jaish-e-Mohammed and Harakat Mujahideen, each of which I proscribed when I was Home Secretary—have been at the forefront of violent activity in the region. India has long charged that such terrorism has had the covert support of successive Pakistani Governments and, in particular, of the main intelligence agency in Pakistan, the Inter-Services Intelligence Directorate—ISID. Her Majesty's Government accept that there is a clear link between the ISID and those groups.
Towards the end of last year, India suffered two serious terrorist outrages. On 1 October, more than 40 people died in an assault on the state assembly in Srinagar, the capital of Jammu and Kashmir. On 13 December, the Indian Parliament building in New Delhi was attacked, leaving 14 people dead. In response to intensive diplomatic pressure, including the visit to the region by my right hon. Friend the Prime Minister, President Musharraf delivered a speech on 12 January in which he pledged:
"No organisation will be allowed to indulge in terrorism in the name of Kashmir".
From early May, when the heavy winter snows began to melt, there was nevertheless an increase in terrorist activity in Jammu and Kashmir and a rise in levels of infiltration across the line of control. That renewed violence included an attack on 14 May on a passenger bus and residential quarters of the Indian army base at Kaluchak, killing 34 people, mainly women and children. A week later, the prominent moderate Kashmiri politician, Abdul Ghani Lone, was assassinated.
596
The dispute between India and Pakistan is at root a bilateral matter which can only be resolved by direct dialogue between the parties. But it is a dispute with potent international implications, both because of the potential scale of any military action, including the possible use of nuclear weapons, and because, post-11 September, new imperatives have been imposed on all member states by United Nations Security Council resolution 1373 to take effective action to counter terrorism.
Since last autumn and particularly since the resurgence of violence in recent weeks, the conflict has been high on the international community's agenda. There has been intensive diplomatic activity from the United States and the United Kingdom Governments, Russia, China, other European Union and G8 countries and, of course, from countries in the region. As part of this co-ordinated diplomatic effort, I visited Pakistan and India on 28 and 29 May. I had discussions in Pakistan with President Musharraf and Foreign Minister Sattar, and in India with Prime Minister Vajpayee, External Affairs Minister Jaswant Singh, Home Minister Advani, Defence Minister George Fernandes and the Leader of the Opposition, Sonia Gandhi.
In Islamabad, I underlined to President Musharraf the need for Pakistan to take visible, decisive and verifiable steps to seal the line of control; to stop supplies to militant groups; to help restrain the violent activities of those groups; and to close the militant training camps on Pakistan's side of the line of control.
In my meetings in Delhi with Prime Minster Vajpayee and Jaswant Singh, I stressed that as Pakistan had demonstrated that it was taking the necessary steps to clamp down on terrorism, India should respond positively. A number of possible steps to reduce tension were discussed with both sides. I also underlined to the Indian Government once again the need for them to take steps to improve the human rights situation in Jammu and Kashmir and to ensure free, fair and inclusive elections in Jammu and Kashmir this autumn.
Before my visit, Commissioner Patten of the EU visited the region and held discussions with both sides. Last week at a regional conference in Almaty, both Russian President Putin and Chinese President Jiang Zemin met separately with President Musharraf and Prime Minister Vajpayee. My right hon. Friend the Prime Minister has spoken at length to both sides, and to Presidents Bush and Putin, about the situation.
Following my trip, US Deputy Secretary of State Richard Armitage visited both countries last week. Mr. Armitage was given a categorical undertaking by President Musharraf that sealing the line of control would be "permanent". The Government of India described that as a "step forward'" and said that they would respond "appropriately and positively." Separately, the US and UK Governments have assessed that there appears to have been a significant reduction in incursions across the line of control since towards the end of May.
I am pleased to tell the House that when I spoke this morning to my Indian counterpart, Jaswant Singh, he told me that India was announcing today that restrictions on overflights from Pakistan over India were to be lifted, and that the name of the next Indian high commissioner to Pakistan was being made public. I also understand that the western and eastern Indian fleets are returning to port.

597
We have, therefore, seen both sides take first steps in the right direction, but the position is still precarious. Terrorism is still a threat and the situation will continue for some time to require the engagement of the international community.
Like my right hon. Friend the Prime Minister and President Putin, President Bush has made it clear that he intends to remain personally involved. I should like to express my thanks and appreciation to US Secretary of State Colin Powell and his deputy Richard Armitage for their indefatigable work in trying to help to resolve the crisis.
US Defence Secretary Donald Rumsfeld will be visiting India and Pakistan this week. The international efforts against terrorism and the Kashmir crisis will be an important agenda item for the meeting of G8 Foreign Ministers in Whistler, western Canada, which I shall be attending later this week. Fellow EU Foreign Ministers are discussing the matter today.
The present crisis has, of course, had direct consequences for many UK citizens and their families. The UK has up to 3 million citizens who are of south Asian origin. As Secretary of State, I have to balance our wider foreign policy interests with my direct duty of care for all UK citizens in the region and for all British Government staff and their families, whether UK based or locally engaged. In response to specific terrorists threats, I decided on 22 May to reduce the level of staffing at British Government posts in Pakistan. At the same time, our travel advice was amended to advise against all but essential travel to Pakistan. As the House was about to rise, there was no opportunity for me to make a statement. I wrote to all colleagues in this House and the other place to set out the changes that had been made and set out in a separate letter what we are seeking to do on the issue of Kashmir.
As tensions increased between the two countries, I announced during the recess, on 31 May, a drawdown of less essential British staff and their families from all posts in Pakistan and from New Delhi and Mumbai in India, and also issued new travel advice for India. Last Wednesday, 5 June, I announced further strengthening of our travel advice in respect of both countries.
We have been working hard to keep the south Asian communities here properly informed of what we are doing and to understand and respond to their anxieties. My right hon. Friend the Home Secretary therefore met representatives of those communities on 29 May to listen to their concerns. As soon as I returned from the sub-continent on 30 May, I held similar meetings, including some with a number of colleagues from this House, to explain what I had been doing in New Delhi and Islamabad.
As every hon. Member knows, our high commissions in New Delhi and Islamabad are among the busiest visa and consular operations in the world. Throughout this difficult period, we have maintained a service in India, albeit at a reduced level. Visa and consular operations in Pakistan had to be temporarily suspended, but I am pleased to tell the House that a limited service resumed last Thursday, 6 June.
Notwithstanding the more hopeful signs, the situation in the region remains dangerous. The problems between India and Pakistan cannot satisfactorily be resolved by military means. That would only lead to more suffering
598
and potentially have devastating consequences for everyone. Working with our international partners, particularly the United States, our diplomatic efforts are there to encourage both sides to take the necessary steps to end terrorism, reduce tensions and enter into effective dialogue. Only then can we hope to break the cycle of crises and secure a permanent peaceful settlement to the issue of Kashmir.
Mr. Richard Spring: In thanking the Foreign Secretary, may I first congratulate the Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North Warwickshire (Mr. O'Brien), on his return to the Front Bench, and wish him well in his new role?
This is clearly a period of the greatest anxiety for the people of the sub-continent. However, there are millions of our own fellow British citizens in this country whose family origins lie in the sub-continent, in India, Pakistan and Kashmir itself. This is a time of special concern for them in respect of their friends and loved ones in the region, and our thoughts are very much with them. I hope that the most recent reports saying that there is some easing of tensions will provide some comfort.
Shortly after the events of 11 September, my right hon. Friend the shadow Foreign Secretary warned that any instability between India and Pakistan was one of the greatest threats that the world might face in future. Sadly, it appears that that warning has now been realised. I welcome the Foreign Secretary's steps to withdraw staff and advise British citizens and those holding dual passports to leave India and Pakistan. What estimate has his Department made of the number of those warned who have taken the Foreign Office advice? What ongoing measures is his Department taking to ensure that British citizens abroad are kept informed of the unfolding situation?
There have been press reports over the weekend saying that the Government are making contingency plans for a considerable number of refugees coming to this country in the event of war. Will the Foreign Secretary confirm that; indicate what arrangements are being made and for how many people; and tell us where such refugee camps would be established?
We have heard the threat of clashes and skirmishes and the rhetoric of "no first strike". Surely, the only acceptable language is that of "no war." The lack of a nuclear doctrine was raised before the Foreign Secretary's visit to the region. What progress did he make in establishing such a doctrine between the two countries?
During the cold war, there were direct communications links between the Kremlin and Washington at the highest level. If, as we understand, they do not exist in this case, surely every encouragement should be given to the two countries to establish a hotline without delay. Does the Foreign Secretary agree that the risk of nuclear conflagration means that the matter is now no longer purely domestic, or even bilateral, but has been effectively internationalised? As we know from Chernobyl, terrible consequences will be felt well beyond the sub-continent.
Last week, the Secretary of State for Defence did not explicitly rule out UK troops being part of an international force to patrol the disputed line of control, the aim being to reassure India that serious attempts are being made to bring to an end guerrilla infiltration. Is the Foreign

599
Secretary aware of estimates of how many troops would be required to patrol the line effectively? The Indian Government have proposed a joint patrol force only. What discussions has the Foreign Secretary had with the Secretary of State for Defence about the possibility of internationalising the force, and has he received any understanding of what British forces might be available, especially given the extent to which our armed forces are already committed abroad? What is the current state of discussions with the Indian and Pakistani Governments about that possibility?
The UK Government were signatories to the United Nations resolutions of 1948 and 1950 which, inter alia, called for Kashmiri opinion to be tested. What is the British Government's present view of that matter?
Those are important issues which the Foreign Secretary needs to clarify. We welcome his involvement in encouraging both sides to take a step back from conflict and his visit to the region, but it is of the utmost significance that the US Deputy Secretary of State Richard Armitage has been in the region, followed by Donald Rumsfeld, whose visit took place this week. The US has a crucial role to play. Equally, we welcome President's Putin leadership and involvement, and note the role that the other regional power, China, is playing, given its relationships with Pakistan and India.
Following the terrible events of 11 September, President Musharraf won many admirers by his statesmanlike response to those events and subsequent events in Afghanistan, despite intense domestic pressures and difficulties. Equally, the people of India have every reason to feel affronted by terrorist attacks on their own territory and especially on their own Parliament. For more than 50 years, India has been the world's greatest democracy. It therefore seems tragic that Kashmir, the most beautiful corner of the sub-continent, continues to act as the catalyst for mistrust, conflict and war.
With the apparent easing of tensions, it is to be hoped that high-level diplomatic representation can be re-established quickly in situ in Delhi and Islamabad, leading to a direct dialogue. We shall of course support any genuine attempt to broker a peaceful settlement of the dispute. In their endeavours to achieve that, with our allies and friends, the Government have our full support.
Mr. Straw: I am grateful to the hon. Gentleman for his comments and for the support he offers. On a personal level, I am also grateful for his welcome back to the Front Bench to the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for North Warwickshire (Mr. O'Brien). Since he, too, is sitting on the Front Bench, I should like to express my appreciation to the Parliamentary Secretary, Privy Council Office, my hon. Friend the Member for Exeter (Mr. Bradshaw), for the way in which he dealt with his portfolio as a Foreign and Commonwealth Office Minister.
The hon. Gentleman asked several specific questions, each of which I shall endeavour to answer. I cannot say precisely how many British citizens have returned. We have given clear advice which has been relayed not only in the United Kingdom, where it will have been heard by relatives and friends of those who are in India and
600
Pakistan, but in the media in both India and Pakistan. The advice is also available worldwide on the Foreign and Commonwealth Office website. Advice in respect of Pakistan has been issued not once, not twice, but three times, and has been upgraded each time; and advice in respect of India has been issued not once but twice. I think that no potential visitor to India or Pakistan or British citizen in either country can be unaware of the advice that we have given.
The hon. Gentleman asked about contingency plans. The Foreign and Commonwealth Office, in association with the Home Office and other relevant Departments, maintains contingency plans on evacuation for about 100 countries. Obviously, countries in the sub-continent are among them; the hon. Gentleman will forgive me if I do not go into details, except to say that if and when we judge it appropriate to make those contingency plans active and public, of course the House will be the first to know. At the moment, while we obviously have to prepare for all contingencies, we live in hope that maybe—maybe—the better news over the weekend can be sustained.
The hon. Gentleman asked whether there has been a well-developed nuclear doctrine between India and Pakistan. While each side is developing what it describes as a nuclear doctrine, there is nothing like the level of sophistication nor anything like the failsafe measures that were developed by the Warsaw pact and NATO countries during the cold war. One lesson to be drawn from the history of east and west Europe is that as a result of the raising of the bar against the use of nuclear weapons by either side, east and west—the Warsaw pact and NATO—eventually decided to resolve their intense disputes and arguments not by resorting to nuclear weapons but by peaceful means. Who would have thought, even 15 years ago, that Russia would now be effectively part of NATO? That is what we have achieved by peaceful means; we could never have done so by nuclear exchange.
The hon. Gentleman asked about the number of troops patrolling the line of control. In all our discussions, the main proposition has been for joint patrols of Indian and Pakistani troops. Given the dangers on the line of control, its length and the terrain, that is effectively the only candidate for patrolling that difficult territory. If we were asked to provide military advisers, not infantry to patrol the line of control, of course my right hon. Friend the Secretary of State for Defence would consider that but, as he has made clear on a number of occasions, no request has been made, still less have any decisions been taken.
The hon. Gentleman's last point was about the status of the United Nations Security Council resolutions passed in 1948, 1949, 1950 and 1951. For the benefit of hon. Members, I shall arrange for those to be placed in the Library in a single form. It is worth while right hon. and hon. Members on both sides reading the original texts, because there are myths around them which are not sustained by the texts themselves. Suffice it to say that Pakistan believes that the Security Council resolutions should still be implemented; India says that the Simla agreement of 1972 superseded them. As for the British Government, we think that there is not a huge amount of point in getting involved in a historiographical exercise about which position is correct. We have to deal with the here and now and how we can best resolve the dispute,

601
which is bilateral, but has obvious international implications. It is therefore right that the international community has been engaged in the way that it has.
Mr. Menzies Campbell: May I tell the Foreign Secretary that neither in his analysis nor in his cautiously optimistic conclusions do I find anything with which to disagree? I commend him too for his sure-footedness in recent weeks in circumstances in which, as his predecessor found out, it is not difficult to become embroiled in controversy. He was right to underline to both Governments, as he did again today, the apocalyptic consequences of a nuclear exchange between them, which would not—indeed, could not—be contained within their own borders. Do not those events underline the pressing urgency to bring both India and Pakistan into the nuclear non-proliferation regime and, in particular, to persuade both of them to sign the comprehensive test ban treaty?
Finally, does the Foreign Secretary understand that in recent weeks the policy of Her Majesty's Government on arms sales has, to put it mildly, seemed to lack coherence? When the crisis began to reach critical levels, why did the Government not announce an immediate suspension of arms sales both to India and to Pakistan, and seek to persuade others to do the same?
Mr. Straw: First, I thank the right hon. and learned Gentleman for his welcome for the actions that have been taken. That is much appreciated. On such a sensitive and difficult issue, it is extremely important for any Foreign Secretary to have the support of those on his own side of the Chamber, which I hope may be forthcoming, as well as the support that has been forthcoming from the hon. Member for West Suffolk (Mr. Spring), the official Opposition spokesman, and from the Liberal Democrats.
The right hon. and learned Gentleman asked about the comprehensive test ban treaty. I hope that from this terrible and potentially devastating situation we may be able to get some good. We want to encourage both sides by bilateral dialogue to seek to resolve the long-standing dispute. In the past, there have been discussions that failed in the end, as they did in Agra last year, but came quite close to agreement. We hope that the parties will agree among themselves on the appropriate forum for such bilateral discussion and, in the end, resolution of the issue.
We hope, too, that both parties will consider joining the various international treaties, which in turn have helped to make the signatories much safer from the risks of nuclear war than they were before.
On the issue of arms sales, the then Under-Secretary, my hon. Friend the Member for Exeter (Mr. Bradshaw) in a detailed written answer of 15 March, set out that we were further restricting the sales of any sort of obvious nuclear material, or dual-use material, that could be used in the manufacture of nuclear weapons and delivery systems in respect of both India and Pakistan. There was widespread approbation for that decision.
On the wider issue, the consolidated criteria that have been approved by the House, which are European Union and national criteria, contain sufficient flexibility, in our view, not to require there to be imposed a blanket arms embargo. There is every coherence in these criteria. For that reason, we have resisted such an embargo.
Given the potential conflict, I fully understand those who ask why there is not a blanket arms embargo. I have heard no argument that demonstrates how an embargo by
602
the UK, or even by the European Union, will be different from what is set out in the consolidated criteria, and could help to resolve the crisis. I sense that the way in which we resolve the crisis will be, I hope, the way in which we have been seeking to resolve it, which is by intensive diplomatic measures.
Mr. Piara S. Khabra: I welcome my right hon. Friend's statement, which sets out a positive and sensible approach. I have genuine concerns because my village, where I was born and educated, is only about 60 miles from the border with Pakistan.
May I ask my right hon. Friend to comment on the recent reports regarding the Kashmir international relief fund and the Regent's Park mosque, which have been collecting funds for Islamic fundamentalists, and reports that President Musharraf is unable to prevent incursions into Kashmir by fundamentalists? What are the prospects of peace between India and Pakistan?
Mr. Straw: I understand my hon. Friend's huge knowledge and experience of the area from which he comes, which is so close to the border. If any hon. Member, or anyone else, has evidence that anybody resident or in this country is raising funds for causes that are banned by the Terrorism Act 2000 or by the Anti-terrorism, Crime and Security Act 2001, I know that my right hon. Friend the Home Secretary and the Metropolitan police will be pleased to hear from them. Such evidence will be fully investigated.
As for President Musharraf's position, I said in my statement that he set out clearly in his speech of 12 January that no organisation would be allowed to indulge in terrorism in the name of Kashmir. He has taken a series of actions since then to bear down on terrorist organisations, three of which I personally proscribedbanned—when I was Home Secretary. That proscription was endorsed by an overwhelming majority in the House.
Mr. Paul Goodman: Does the Foreign Secretary agree with my constituents of Pakistani and Kashmiri origin that there will be no just and lasting final settlement in Kashmir until the people who are caught in the tragic situation there are allowed to determine their own future, and that that cannot be a matter for India and Pakistan alone?
Mr. Straw: The resolution of this dispute does lie in the hands of Pakistan and India alone. How they resolve it is another matter, and of course we hope that in seeking to resolve it they will take full account of the wishes of the people in Kashmir. One of the reasons why we have sought to encourage the Government of India to ensure that there is a climate in which free and fair elections can take place in Jammu and Kashmir is our wish to ensure the provision of a democratic outlet for people's concerns in those regions.
Mr. Khalid Mahmood: In this conflict, the people who are being used as table tennis balls in a game of power politics are the Kashmiri people. It is time that India and Pakistan stopped using them in that way and messing around with people's lives.
We have lost more than 70,000 people in Kashmir. Others have been lost through acts of terrorism. I condemn all the acts of terrorism, and all the human

603
rights abuses and violations, that have taken place. Unless and until we move to secure international action, we will not resolve the issue. Will the Home Secretary—[interruption]—consider resolving it by means of third-party negotiation, and pressing both Governments to do something?
Mr. Straw: I am grateful to my hon. Friend for the compliment, but I assume he was addressing me in my current rather than my previous capacity.
My hon. Friend is right to say that more than 70,000 people have lost their lives in this terrible conflict. Those people were members of all religions—Sikhs, Hindus and Muslims. I am grateful to my hon. Friend for the statesmanlike position he has taken in saying that it is the Kashmiri people who have been caught up in the conflict; but because it is a dispute between two sovereign nations, it can only be resolved through direct dialogue between those two sovereign nations.
Obviously the dispute has substantial implications for the international community, which is why we have been taking the action we have been taking. As I have said, however, it is a direct territorial dispute, and it is through direct dialogue that a resolution is possible. If the two nations seek outside intervention or conciliation of any kind, of course the international community will stand ready to offer it; but it must be a decision that they take.
Sir Brian Mawhinney: May I ask a question arising from the Foreign Secretary's helpful statement? What is the Government's policy on the continued existence of terrorist training camps? What will be their approach should President Musharraf not respond positively to urgent representations made to him by the Foreign Secretary for the camps to be closed immediately?
Mr. Straw: United Nations Security Council resolution 1373 imposes clear obligations on all United Nations member states to take action in respect of terrorism in their territories. That plainly includes the operation of training camps in which terrorists are trained. We look to the Government of Pakistan to take effective action in respect of those camps, and we are monitoring the situation.
The right hon. Gentleman will forgive me if I do not speculate on what action may or may not be taken if—and we do not think this will happen—President Musharraf does not follow through the undertakings he has given.
Mrs. Alice Mahon: While I welcome some reduction in the tensions in the area, I think my right hon. Friend will agree that we cannot walk away and ignore the situation again, or we will be brought to the brink of a nuclear war in just a few months' or years' time.
Many of my constituents are Kashmiris. Over the years, I have not heard one of them say anything other than that they want the right to determine their own future, and they want it through the United Nations resolution of 1948. Is it not time we all started to ensure that this goes back to
604
the UN, that the international community remains involved, and that the Kashmiris have the right to a plebiscite?
Mr. Straw: My hon. Friend is correct to say that we cannot walk away and ignore the situation. During the earlier part of this year, there was intense diplomatic activity to try to resolve the immediate crisis over Christmas and the new year. Then crises elsewhere in the world, particularly in the middle east, tended to take over the headlines and to consume the immediate concerns of Foreign Ministries around the world. It is extremely important that the international community stays engaged in this matter.
I understand what my hon. Friend's constituents feel because I have a great many constituents of Kashmiri origin, but we have to deal with the world as it is. To suggest or imply that the dispute can be resolved by an argument about the history is to suggest to the people who have been the victims of all this conflict that it is through the history that a solution lies. May I give a parallel example? If we put the adversaries in Northern Ireland in a room, they will argue until the cows come home about the history. My right hon. Friend the Prime Minister and his predecessor sought to get people to look forward rather than looking back. If there is to be a resolution of the Kashmiri dispute, it can only be by looking forward and by a direct dialogue between those two sovereign nations, India and Pakistan—with international encouragement, of course, but that is what has to happen.
Mr. Alex Salmond: Does the Foreign Secretary accept that the capacity for direct diplomatic intervention by the United Kingdom is somewhat restricted by the fact that all sides in the conflict allocate to the UK, the ex-colonial power, a certain responsibility for the conflict in which they are engaged? Given that he thinks that the United Nations resolutions are unclear on the question of self-determination for the people of Kashmir, will he give his interpretation of what those UN resolutions mean? In that respect, he might find that the history of this matter is rather more important than he thinks.
Can the Foreign Secretary point the way forward in the current situation? He asks why it might be important not to sell conventional arms to either side in the conflict. May not our arguments for peace carry more moral force if we were not simultaneously selling people weapons of war? Might not that moral force be a factor in increasing the right hon. Gentleman's persuasiveness in these matters? If he does not think that, I fear the moral compass on the basis of which he has acted.
Mr. Straw: Neither in India nor in Pakistan were my hosts impolite enough to mention Britain's less than entirely glorious role in the initiation of this dispute. The hon. Gentleman is right to acknowledge it, but it has not so far affected our capacity to encourage both parties to resolve the matter peacefully.
On the UN Security Council resolutions, I think the best service I can provide the hon. Gentleman and the House is to make those available in the Library of the House, and I shall do so. They extend, particularly one of the key ones, to a great many pages and hundreds if not thousands of words.

605
On the issue of arms sales, I may be wrong but I do not recall approving a single arms control licence in the past two months—neither does my hon. Friend the Member for Exeter, so the assumption that the hon. Gentleman makes is inaccurate. Since we have agreed robust national and EU criteria for arms control, it seems that that is the appropriate way in which to run our arms control system, rather than by some ad hoc process. The simple truth is that we have one of the most effective and thorough systems of arms control of any country in the world.
Mr. Gerald Kaufman: Having visited Jammu and Kashmir on a number of occasions been to both sides of the line of control and seen the festering misery in the refugee camps of Kashmiri Muslims in Azad Kashmir and of Hindu Pandits in Jammu, may I put it to my right hon. Friend that whatever force India is capable of deploying, there is no chance whatever of the dispute being settled until the Kashmiris' problem is settled? There is no more chance of its being solved by leaving it to India and Pakistan alone than there is of the middle east problem being solved by leaving that to Israel and Palestine alone.
Will my right hon. Friend confirm the policy of his predecessor, whereby the United Nations Security Council resolutions would remain valid? Will he also make it clear that until India is ready to negotiate, there is no possibility of its becoming a permanent member of the Security Council?
I further ask my right hon. Friend to take note of what Adya Rajkotia-Luthra, a seven-year-old Hindu girl, reportedly said a few days ago:
"I wish I could go to Vajpayee's house and ask him not to have a nuclear war over Kashmir. I would also tell him to settle Kashmir and stop all talk of war".
Are those not the most sensible and wise words to come out of Delhi for a long time?
Mr. Straw: As I have already said, I accept that the conflict has caused the death and suffering of thousands of Muslims and Hindus, and of thousands of Sikhs as well. My right hon. Friend has a particular criticism of the Government of India, and that is his privilege, but I should point out that there is a great deal to be said on both sides about the history of this conflict. For example, the fact cannot be avoided that over a period of years, successive Governments of Pakistan have, through their Inter-Services Intelligence Directorate, encouraged and funded terrorists—otherwise known as freedom fighters—to make incursions across the line of control as outsiders in that dispute, and to engage in mayhem and terrorism. I understand why many people of Kashmiri origin—including some of my own constituents—do not like to acknowledge that reality, but this House must acknowledge it, as the international community does.
As to the Government of India's becoming a permanent member of the Security Council of the United Nations, that has long been the position of Her Majesty's Government; indeed, it was the position of my predecessor.
Mr. Andrew MacKay: I strongly commend the Foreign Secretary's statement, but I should point out that it is only in the most serious situations that a Government
606
should ask their citizens to leave another country. If that is done in any other circumstances, it devalues the product to such an extent that in future dangerous situations, people might not leave the country concerned, and some might even travel to it. Given that we have seen on our television screens expatriates in Delhi and elsewhere suggesting that there is no need to leave, is the right hon. Gentleman totally satisfied that such recommendations are right in respect of all of India? Will he give the House a guarantee that if the situation continues to improve, he will keep his decision under constant review?
Mr. Straw: These decisions have been very difficult. We are caught between trying not to raise the anxiety of people in the region unnecessarily or "devalue"—to use the right hon. Gentleman's description—the currency of advice, and recognising our clear duty of care to British citizens and to our staff. Today's news could have been very different, as could tomorrow's. My judgment was that the changes to travel advice were appropriate and calibrated, and in a sense I am comforted by the fact that similar judgments were made by the American Secretary of State, Colin Powell, by the United Nations Secretary-General in respect of his staff, and by many other Governments around the world. Of course, the last thing that we wish to see is any restriction on travel to Pakistan or India, or—following on from that—any restriction on trade. Trade with India has taken off, and with our active support trade with Pakistan has expanded, following a change in the EU-Pakistan textile agreement that was reached at the beginning of this year.
The right hon. Gentleman asked whether we would keep the matter under review and change the travel advice when we think it safe to do so, and the answer to that question is yes.
Mr. Ben Chapman: I share my right hon. Friend's pleasure at the optimistic signs that are emerging, not least because my daughter is currently in Madras and is seeking to fly home. Needless to say, I make no special plea for my daughter, concerned about her though I am; I know that she will work to find a solution to her own problem. However, her experience of going to the airline with which she is travelling was to find, at the end of last week, that all flights this week were full and waiting lists were closed. If Governments are to issue advice that their citizens should leave a particular country, it follows that matching provision should be made for airline capacity to carry those individual citizens out of that country. What steps are being taken to ensure that seats will be available to those who seek to travel?
Mr. Straw: I know that my hon. Friend is not seeking to make a special plea for his daughter, but such an example is a useful way of illuminating what may be a problem. Our general information is that although there are heavy bookings for flights out of the main airports in India and Pakistan, flights are not fully booked. I hope to follow up the matter that my hon. Friend has raised, and I will let him and the House know the result.
On the wider issue, we have made contingency arrangements to charter a number of flights if we judge that the news is going the wrong way, and we ourselves have to organise an evacuation of British citizens from the sub-continent—but I hope that that does not happen.
Hugh Robertson: Is there any evidence to support the Indian Government's claims

607
that the terrorists have direct links to al-Qaeda? If so, what are the implications of that for our relations with the Pakistani Government, given our position in the war against terrorism?
Mr. Straw: The hon. Gentleman will forgive me if I do not go into detail—but I have seen the speculation as well.
Jeremy Corbyn: Will my right hon. Friend return to the points raised by the right hon. and learned Member for North-East Fife (Mr. Campbell) and the hon. Member for Banff and Buchan (Mr. Salmond) about the sale of arms to both India and Pakistan? They are both countries with enormous structural problems and tremendous poverty—huge problems that could be resolved with better attention, shall we say, to internal issues. However, the west, and Britain in particular, has been very happy to do enormous arms deals with both countries. There must be an increased danger of war between them the longer these arms sales go on. Will my right hon. Friend impose an arms embargo on both sides and encourage the rest of Europe and the western world to do exactly the same?
Mr. Straw: My hon. Friend is right to say that those countries have devoted to military expenditure considerable resources that otherwise could have gone to civilian expenditure. That is why we in the international community—including the UK Government, myself not least—have been working so hard to encourage the parties to the dispute to reach their own solution to the dispute. As I said at the end of my statement, the problems between India and Pakistan cannot satisfactorily be resolved by military means. However, I have seen no evidence that a unilateral arms embargo by the UK, or even by the EU, would help to resolve this issue or lead to less defence expenditure by these countries. I simply do not believe that that would happen.
Mr. John Redwood: I compliment the Foreign Secretary on his diplomatic efforts, but will he tell us what applications for arms sales in the last two months, if any, have been blocked by the Government? Could he give guidance to UK companies that are perhaps thinking of trying to sell arms to India or Pakistan as to which licence applications would be blocked in future? We need more information about what the Government will and will not allow.
Mr. Straw: So far as I am aware, no applications have been blocked; they have been subject to processing in the normal way. However, I shall be happy to set the record straight for the right hon. Gentleman and for the House if my recollection is inaccurate.
The criteria were clearly laid out in the consolidated criteria that were put before the House on 26 October 2000 by my right hon. Friend who is now the Minister for Europe. The criteria on which we make decisions, which are the consolidation of national criteria and mainly EU criteria, are clearly set out. They are criteria that the defence industries themselves properly understand. I have had no request from the defence industries for us to provide a gloss on the criteria, as it were. The best way
608
that we can provide certainty is by saying to the defence industries that we will apply these criteria, which are sufficiently flexible to take account, for example, of changes in the level of conflicts and potential conflicts between different parties.
Mr. George Mudie: I am slightly disconcerted by the Foreign Secretary's approach in his statement, which seemed to view the Kashmir problem only in the context of the US war against terrorism. I am also slightly disconcerted by his apparent dismissal of past UN resolutions as historic and not worth arguing about. However, I am totally disconcerted by his view that this 50-year-old dispute can be settled only by the two parties concerned. It is 50 years of such advice from the Foreign Office that has led to the present situation. Is there not a case for the Foreign Secretary, on behalf of the Government, to approach the US Government and the other two regional powers involved to see whether the two parties to the dispute can be brought to the table, so that the issue of Kashmir can be settled? Clearly, after 50 years, it cannot be left to the two parties alone.
Mr. Straw: It is simply not the case that I have approached the issue solely in terms of the fight against terrorism. I have a fair knowledge of the dispute, not least after 25 years of representing people from both India and Pakistan who live in my constituency. I could turn my hon. Friend's argument back on him and suggest that if United Nations resolutions could have solved the matter, it would have been solved more than 50 years ago. I am happy to talk about the UN resolutions, but while Pakistan adopts them. India claims that they were superseded by the Simla agreement between the two countries in 1972. I shall put the terms of that agreement on the table for hon. Members to discuss.
I accept that the dispute is a bilateral one, but—as I said in my statement and have said on many previous occasions—it has serious international implications, both because of the potential consequences if war breaks out and because of wider humanitarian concerns for the benighted people of Kashmir on both sides of the line of control. That is why the Government have been so heavily engaged in seeking to encourage the parties to resolve the dispute by peaceful means. So too, have the US, Russia and China, to which my hon. Friend referred. However, external parties can do all that they can, with the best will in the world—President Putin and President Jiang Zemin both held meetings separately with President Musharraf and Prime Minister Vajpayee in Almaty some 10 days ago—but in the end the matter can be resolved only by the two key parties who are arguing about territory. We do not have the international law behind us, or the military might—even with the US, Russia, China and the UK combined—to police an agreement that has not been made by the two parties.
Mr. David Chidgey: The Foreign Secretary has already confirmed that there are contingency plans for British military advisers to be sent to help to seal the line of control if asked to do so. Are there contingency plans, or any extended contingency planning, to provide a helicopter fleet to assist with sealing the line of control? Will we send any other assets to assist, either on our own or with the help of the US?
Mr. Straw: No, although I cannot rule out what might happen in the future. The hon. Gentleman may be

609
referring to reports suggesting that some 300 helicopters might be provided, but the point that I was making to my Pakistani interlocutor was that to do as we have been requested and insert monitors along the line of control would require 300 helicopters and a large contingent of external forces. Such forces are not available, and the British Army does not have 300 spare helicopters—nor has even the US. That was my point.
Patrick Mercer: The Foreign Secretary has already alluded to the number of people in this country who have direct and personal involvement with affairs in India and Pakistan. What interdepartmental talks have there been about deterring and containing any outbreak of violence that might spill over from the sub-continent on to the streets of this country?
Mr. Straw: I understand the burden of the hon. Gentleman's question, but I do not believe that anyone has that idea in mind. However, my right hon. Friend the Home Secretary and I, along with other colleagues, are well aware of the anxieties and strong passions, some of which have been expressed this afternoon, that are felt on the issue. As I said in my statement, my right hon. Friend deemed it appropriate to hold a meeting with representatives of south Asian groups, including Hindus, Muslims and Sikhs, on 29 May. I met a similar group the next day to talk about community relations in this country, along with colleagues from both sides of the House and Lord Filkin, the new Home Office Minister with responsibility for race and community relations. We intend to stay very closely in touch with the communities in this country.
Glenda Jackson: I welcome the relaxation of tension to which my right hon. Friend referred in his statement. However, given the apocalyptic nature of the weapons available to India and Pakistan, despite the answers that he has given this afternoon and that his Department has given in the past, many of my constituents were, and remain, deeply concerned that the Government will not impose an absolute ban on arms sales from this country to that region at a time of such tension. Will my right hon. Friend look at the issue again, as the Government's approach seems to do little or nothing to contribute to what everyone in this country, regardless of nationality or creed, wishes for—that is, that there should be no war in that part of the world?
Mr. Straw: I understand the deep concerns of my hon. Friend's constituents, and I do not dismiss them for a second. However, some of the supplies that I have approved in the past, such as de-mining equipment, have been extremely benign, albeit that they are classified as arms sales. A blanket ban would involve a complete ban on any kind of material at all. I have already said that to the best of my recollection—I will correct this if I am wrong—I have neither seen nor approved any arms control licence in respect of India or Pakistan in the past two months.
The criteria that I mentioned earlier are applied very carefully. Moreover, the decisions that Ministers make are the subject of retrospective scrutiny by the so-called Quadripartite Committee. Although I know that there has been a separate discussion, led by my hon. Friend
610
the Member for Cynon Valley (Ann Clwyd), about strengthening that machinery, ours is among the most thorough parliamentary scrutiny of arms control licences anywhere in the world. When I gave evidence on behalf of the Government before the Quadripartite Committee about five weeks ago I was, quite properly, given a very thorough cross-examination by the right hon. and hon. Members present.
Mr. Barry Gardiner: I thank my right hon. Friend not only for the consistent attention that he has given this issue but for meeting many community leaders on his return from the sub-continent, including many of my constituents and those of colleagues throughout the House. We appreciated that.
Does my right hon. Friend agree that Abdul Ghani Lone's fatal error was to commit himself exclusively to following the democratic process in the state legislative elections coming up later this year, for which reason he was then, as a leader of the Hurriyat conference—and no friend of the Indian Government—targeted by the ISI and assassinated? Does my right hon. Friend also agree that when Donald Rumsfeld is in both capitals this week, he could do a lot worse than come away with a commitment from the leadership of Pakistan matching that already given by India that there will be no nuclear first use by that country? Such a level of equality in the nuclear relationship would greatly defuse the situation.
Mr. Straw: I am grateful to my hon. Friend for his remarks. He is right to draw attention to the great bravery of Mr. Lone and the fact that he—as no friend whatever of the Indian Government—paid for his moderation with his life. There are some extremely unpleasant people operating in Jammu and Kashmir in the name of freedom. This country, too, has had experience of people operating in the name of freedom committing the most outrageous terrorist acts, and we should bear that experience in mind. I should say for the record, however, that I have no evidence about the provenance of the murderers.
On my hon. Friend's last point, we want both sides to say that they simply will not use nuclear weapons to resolve the conflict, and that they will resolve it by other means.
Mr. Peter Luff: I declare an interest as chairman of the parliamentary friends of India. The Foreign Secretary will understand the importance that I attach to strengthening and deepening the historic trade and economic ties between our two nations. I want to reinforce the concerns of my right hon. Friend the Member for Bracknell (Mr. MacKay) about the impact that unnecessarily severe travel advice could have on economic and trade relations. Does the Foreign Secretary understand that there is concern in India that travel advice may have been issued in order to be even-handed between India and Pakistan rather than on the merits of the case, and will he ensure that the advice is kept under constant review and can be relaxed at the earliest possible moment?
Mr. Straw: It is worth repeating that I have every interest in and commitment to encouraging trade and commercial, business and tourist intercourse between the United Kingdom and Pakistan, India and all the other countries of that region. To reassure the hon. Gentleman,

611
I can say that the advice issued in respect of India was not issued in order to appear even-handed. I took quite separate decisions, which I spelled out in a letter to all colleagues—as the House was not sitting—giving reasons for the travel advice and the drawing down of our staff in Pakistan, which was to do with extant terrorist threats there. I held off from issuing travel advice in respect of India until I had been to the region and discussed my experiences, in particular with United States Secretary of State Colin Powell and European Union colleagues. I judged it appropriate, and it was required by my duty of care towards United Kingdom citizens, to issue the advice that I did on 31 May, and then to strengthen it on 5 June.
I promise the hon. Gentleman and the House that we will change the travel advice as soon as it is prudent to do so—back to normality, we hope, but that remains to be seen. Meanwhile, our albeit limited staffs in both India and Pakistan are making every effort to run as near normal a visa service as possible.
Mr. Keith Vaz: I, too, commend my right hon. Friend for his worthy efforts on the matter. He is walking a tightrope in respect not only of what is happening on the sub-continent but of the communities here. He has been assiduous in trying to secure a peaceful settlement. However, let me take him back to his statement about the entry clearance operation. I know that it is to be increased in New Delhi, but I have had complaints over the past few days from constituents who simply cannot make applications. That involves not only visitor visa cases but compassionate cases. I know that my right hon. Friend has an interest, because of the number of his constituents in Blackburn who will be affected. Unless we consider how to tackle the problem now, there will be a backlog of cases. Perhaps we can consider an alternative method by which people can make applications.
Mr. Straw: I thank my hon. Friend for his kind remarks. I understand what he says about the entry clearance operation. I was reluctant to make any changes in the visa processes or to draw down staff until I thought that it was absolutely necessary—but it had to be done. We have arranged a drop-box system in Delhi. As of this morning, I understand that our processing of applications across India as a whole is running at 65 per cent. of the level at June 2001, and 80 per cent. in Delhi. We will do everything that we can to get back to as near normal a level as possible. If my hon. Friend has specific constituency complaints or concerns, I hope that he will draw them to my attention or to that of the Under-Secretary of State, my hon. Friend the Member for Warwickshire, North.
Tony Baldry: Does the Foreign Secretary agree that part of the continuing tragedy is that millions of the poorest of the world's poor live in India and Pakistan, as is evidenced by the fact that India is the largest recipient of bilateral aid from the UK? Does he also agree that every penny spent on armaments and nuclear devices by India and Pakistan could better be spent on primary education and health care in those two
612
countries? What realistic prospect is there that India and Pakistan would actually be willing to try to resolve the difficulties between them bilaterally?
Mr. Straw: India is a huge country and contains about one third of the world's poor, according to figures from the Department for International Development. Per head of population, India and Pakistan are significant recipients of aid from this country and from around the world.
As for the hon. Gentleman's question about realistic prospects, I have given an explanation why the matter has to be resolved by the parties, albeit with encouragement from others—[Interruption.] I am neither an optimist or a pessimist in such situations. We have to work hard for a peaceful solution to be agreed between the parties, and we shall continue to do that. However, it is also crucial that although the issue may fall away from the front pages, it should not fall away from the concerns of the House; it is not least a consequence of the international community's having moved on to something else that the issue blew up into a crisis and then festered without being resolved.
Mr. Peter Pike: I support everything that my right hon. Friend has done to achieve an easing back from the crisis that we face. He will know that I went right up to the line of control just before Easter. May I urge him to ensure, in the short term, that the United Nations has equal access to both sides of the line of control and that its reports on incursions and shelling across the line are made public, so that we have a neutral view of the position? In the long term, although I realise that the issue can be resolved only when Pakistan and India are willing to resolve it, we must take account of what people on both sides in Kashmir want. We must ensure that the problem is kept on the agenda; 54 years is far too long, and the problem must be solved.
Mr. Straw: I am grateful to my hon. Friend. He is right to say that 54 years is far too long. As regards the specific issue of the UN monitors, I shall take up the points that he raised and will write to him.
Mr. Mark Francois: In the Foreign Secretary's remarks this afternoon, he appeared to rule out the formal deployment of British military units to Kashmir, but he has posited a scenario in which individual military advisers could be sent. Will he tell the House whether any British military personnel have been given warning orders or otherwise put on notice of possible service in Kashmir?
Mr. Straw: Although, as the hon. Gentleman will understand, I am not directly responsible for military forces—that is a matter for my right hon. Friend the Secretary of State for Defence—I am tolerably certain that no warning notices have been given.
Mike Gapes: Earlier today I had a meeting with the leadership of the Ilford mosque that my right hon. Friend visited a few years ago. Concern was expressed to me that nothing that happens in the conflict should be used in any way by extremists of any kind to damage community relations in this country. Given that the period from the Hiroshima and Nagasaki bombs to the Cuban missile crisis was 16 years, how confident can we

613
be that it will not be 16 years from the inception of Indian and Pakistani nuclear weapons before those countries realise the need for a hotline and a proper relationship to control and manage the fact that there are two nuclear states in that region?
Mr. Straw: First, I commend the very responsible approach taken by my hon. Friend's constituents as represented by the mosque in Ilford, which I well remember visiting.
Secondly, I cannot give a time line, but with good fortune, one better consequence of the current crisis and the international attention being paid to it may be that both sides understand the need better to develop a sophisticated nuclear doctrine, and above all, the need to improve their back-channel methods of communication so as to avoid a nuclear war starting by accident or misunderstanding.
Several hon. Members rose—
Mr. Speaker: Order. We must move on.

Point of Order
4.40 pm
Dr. Julian Lewis: On a point of order, Mr. Speaker. My point of order arises from a report in The Mail on Sunday yesterday, to which I have drawn your office's attention, by that newspaper's political editor. You will recall that, throughout the last Parliament and at various times during this Parliament, various hon. Members have complained that Government announcements have been made to the media before being made to the House. The political editor of The Mail on Sunday claims to have documentary evidence that that practice dates from a meeting at No. 10 Downing street during the last Parliament, called by the communications director at No. 10, Alastair Campbell, in which he stated:
"We have got to think up new ways of communicating our message and be less tied by parliamentary rules."
That seems to suggest a pattern, and a hand behind that pattern, of flouting parliamentary convention. I should be most grateful to you, as I am sure many other hon. Members would be, if you would endeavour to investigate this matter.
Mr. Speaker: I will not comment on media articles—it is not for me to do so—but I reiterate that I want Ministers to come to the House when any important matter has to be announced, rather than releasing a statement to the press. I hope that that helps the hon. Gentleman.

Orders of the Day

  National Insurance Contributions Bill
  Considered in Committee.
  [SIR MICHAEL LORD in the Chair]

  National Insurance Contributions Bill
    Clause 1

      PRIMARY CLASS 1 CONTRIBUTIONS
      4.41 pm
      Dr. Evan Harris: I beg to move amendment No. 1, in clause 1, page 2, line 4, leave out—
      'the current upper earnings limit'
      and insert "£100,000".
      The Second Deputy Chairman of Ways and Means (Sir Michael Lord): With this it will be convenient to discuss the following amendments: No. 2, in clause 1, page 2, line 8, leave out "1 per cent." and insert—
      '10 per cent. on earnings over £100,000'.
      No. 4, in clause 1, page 2, line 30, leave out—
      'the current upper earnings limit'
      and insert "£100,000".
      No. 5, in clause 1, page 2, line 34, leave out "1 per cent." and insert—
      '10 per cent. on earnings over £100,000'.
      Dr. Harris: These amendments were tabled by myself and my hon. Friend the Member for Truro and St. Austell (Matthew Taylor), whom I am pleased to see in his place. I had imagined that we might be joined at some point in our proceedings by the Chief Secretary to the Treasury, the right hon. Member for Brent, South (Mr. Boateng), who deserves to be congratulated on his new position. Indeed, I hope that he will join us in today's debates.
      It needs to be said at the outset of this debate that the Liberal Democrats welcome the resources for the national health service that will be provided under the Bill. However, we have four very clear concerns. First, the resources have come five years too late. Secondly, in the sense that they were not advertised at the last election, they have been introduced by stealth. Thirdly, we do not believe that the Bill represents the fairest way to act. Fourthly, we believe that significant difficulties will be created for business— in particular, but not only, manufacturing business. These amendments represent an attempt to resolve the last of those problems.
      Significant difficulties will be created for those who run and work in businesses by the Government's decision to use a rise in employers' contributions to fund the health service. For that reason, we propose in the amendments a 10 per cent. national insurance contribution rate above the current upper earnings limit—indeed, above earnings of £100,000 a year. That is as close as we can get, using the vehicle of this Bill, to a selectable amendment that reproduces our policy to fund public services in the fairest possible way and to do so progressively and by avoiding placing extra burdens on business.
      616
      Taken together, these amendments—especially if considered with amendment No. 3, which has not been selected for debate—would provide an alternative approach to funding the health service, instead of raising employers' contributions. There may be disagreements between those on the Treasury Bench and ourselves; they may consider that our proposal would be too fair and too good for business because they want to penalise business. I hope that they will accept, at least, that it is a statement of our position. When we say that we want improvements in the health service, it is right that we are asked how we will pay for them, just as the Government have said how they will pay for them. We have set out the ways in which we shall do so, as I am doing now. In contrast, Conservative Front-Bench Members are on much more difficult ground, as I suspect, for reasons that we may share, that they will express their concerns about the impact on business of the rise in the employers' national insurance contribution. They will have to answer—the hon. Member for Buckingham (Mr. Bercow) is perhaps eager to address this now—how they would pay for improvements in the health service if they are not going to support some of the measures in the Bill.
      4.45 pm
      Mr. John Bercow: The hon. Gentleman will not be surprised to know that I await the explanation of his arguments with eager anticipation, bated breath and beads of sweat on my brow. Given that he has just referred to an amendment whose purpose and effect would be to limit the size of national insurance contributions paid by employers, will he confirm whether an amendment that has been tabled by Liberal Democrats will confine the limit on national insurance contributions by employers to those in Great Britain? The Liberals appear to have neglected to consider the situation in Northern Ireland.
      Dr. Harris: If that is the best that the hon. Gentleman can do on this key issue—I believe that the amendment to which he refers has not even been selected in this group—it shows the weakness of his position. The Chairman of Ways and Means has made his selection, and my intention is to make the general point that the funding of the health service should be progressive. For preference, that should be done without putting extra burdens on business, but, in the end, the health service needs to be funded.
      I had hoped that the hon. Gentleman would answer the point that I put to him, and I hope that he will do so. If he opposes some of the resources of this Bill—I share some of the concerns that he may express later about some measures—he must state which parts of the health service he wants to cut, which parts he will not allow to grow, or what other taxes he would increase. That is important. However imperfect the drafting of our amendments, they are a genuine attempt to explore why the Government have chosen to go down this path.
      Our approach to raising the resources that are needed for the health service is progressive. We made it clear in our alternative Budget that we wanted a 50 per cent. rate of income tax for those earning more than £100,000—the very well-off and those best able to afford such a rise—to pay for this vital public service. Clearly, it is not possible to frame amendments to propose such a rise in income tax. As the next best thing—given that the

      617
      Government have sold the pass on the upper earnings limit—we would have liked a much better method than this tax on jobs, which is a much more second-rate option.
      The Government must say why they are opposed to the proposal set out in these amendments. They must have considered it, given that the upper earnings limit is no longer sacrosanct. Given the 1 per cent. increase in the upper earnings limit, the Government have conceded that it is not absolute, regardless of what they failed to say about it before the election. The drawbacks must therefore be addressed. It does not appear that it is unfair, because we would be asking high earners to pay more. It does not appear that it is the sort of tax that can easily be avoided—clearly, that will be an issue in relation to taxing high earners. Given all the evidence that a 50 per cent. rate on incomes over £100,000 is about the going rate worldwide, it is difficult to envisage how people will move their earnings abroad, especially when, in this context, we are talking about a payroll tax that is much more difficult to avoid. In New York, for example, when taken together with local taxes, the tax on salaries equivalent to £100,000 is about equivalent to the rate under our proposal.
      Are the Government concerned that our proposals are not explicit enough? I do not see how one could be more explicit than saying before the election that we wanted to ask the better-off to pay more tax in a fair way for the health service. We restated that proposal in our alternative Budget and we are seeking to make that case in Committee today.
      The Government cannot argue that our proposals are not a transparent way of raising money. The complexities that the Government have already introduced into the national insurance contributions system do not give them strong grounds on which to attack the transparency of our approach.
      There are strong reasons for seeking to make the changes proposed by the amendments. They would raise approximately the same amount of resources as the Government intend to raise from their tax on employers that will result from the Bill's proposals for employers' national insurance contributions. We weighed up whether we would prefer the money to be raised via our approach or from employers' national insurance contributions. Because of the significant drawbacks on business that will result from the tax that the Government propose, we believe that our approach is preferable.
      It is peculiar that the Government should seek to raise so much of the money for the health service from a tax on business. In previous debates such as that on the 1999 measures to deal with pollution, the Government have said that they did not want to tax jobs. They said that that would be bad and that employers' national insurance contributions would be reduced when other taxes on pollution went up. However, the bad tax that the Government have previously opposed is now being used as a vehicle.
      We believe that the top priority is extra money for the health service, but we do not believe that the Government's approach, as set out in the detail of the Bill, is the right one. Raising the employers' contribution will cause problems for employers, manufacturing and the businesses facing difficulties in exporting because of the strong pound. In addition, public service employers, including those within the health service, will lose money as they gain. It is not clear that the Government have taken that point into account.
      618
      It is clear that the amendments would be fairer and would not have such a severe impact on business. Our proposals are transparent and it would not be possible to avoid them. Those are strong reasons for supporting the amendments, and I ask, Sir Michael, that we be allowed to vote on amendment No. 2, which expresses the bulk of what we are trying to say. The Conservatives must also explain where they would get the money from if not from a tax on business.
      Mr. Mark Hendrick: Will the hon. Gentleman tell us why, when the Government's proposal was introduced in the Budget, the Liberal Democrat Front-Bench spokesman described the 1 per cent. increase on employees' national insurance contributions as not being a tax? In fact, he asserted that income tax should have been raised by 1 per cent. However, when it comes to employers, the Liberal Democrats describe the increase as a tax. Why is it a tax on employers when it is not a tax on employees?
      Dr. Harris: I regret that the hon. Gentleman was not able to provide me with the direct quotation, but I shall set out again the position of those on the Liberal Democrat Front Bench. We recognise that national insurance contributions are a form of payroll taxation. Our position is clear in that we believe that income tax is a preferable way of raising money for the health service, and we said that to the electorate at the last election. We were clear about introducing a top rate of 50 per cent. on income of more than £100,000, and that would cover unearned income and wealthy pensioners. The Government's proposal excludes the wealthiest third of pensioners from contributing to the extra money that the health service needs.
      We must now decide how we want the money for the health service to be raised. Five years ago, we would have supported such a measure and we still want money to go into the health service. However, because the Government will put extra burdens on business through the national insurance contributions paid by employers, the amendments reflect our disappointment that the Government did not take the alternative open to them and apply a top rate equivalent to income tax through national insurance contributions on incomes of more than £100,000.
      Mr. Hendrick rose—
      Dr. Harris: I thought that I had answered the hon. Gentleman's question.
      Mr. Hendrick: Is the hon. Gentleman saying that the Liberal Democrats would much rather that pensioners paid income tax at an extra 1 per cent. than businesses paid 1 per cent. towards the health costs of their employees?
      Dr. Harris: We have been clear that wealthy pensioners who can afford it—
      Matthew Taylor: Rupert Murdoch.
      Dr. Harris: Not only Rupert Murdoch, but other newspaper magnates, should, when they become

      619
      pensioners, contribute to vital public services according to their ability to pay. I have answered the hon. Gentleman's question. He is saying that people such as Baroness Thatcher and Rupert Murdoch should not pay for the health service. Given that one of them was partly responsible for reducing it to its present state, that is charitable of him.
      Matthew Taylor: My hon. Friend may want to go a little further and point out that the Labour party's policy is not only that Rupert Murdoch and Baroness Thatcher should not contribute extra tax to the NHS, but that low-paid employees on as little as a few thousand pounds a year should pay extra. So those on very high incomes do not pay extra, but those on very low incomes do. That is an odd policy for the Labour party to pursue.
      Dr. Harris: I direct the hon. Member for Preston (Mr. Hendrick) to page 46 of the Library research paper on the Bill, which shows the curve of the percentage of income paid in national insurance contributions according to gross income. Under the Government's plans, those earning £600 a week will pay 9 per cent. and those on £2,000 will pay around half that. That is no one's definition of progressive. People on around that earnings limit should make a significantly increased contribution to public services.
      Labour Members may be embarrassed that they do not have as progressive a policy as they might and will end up supporting a tax on businesses in their communities in preference to asking the better-off to pay more. That is hard to defend. We have clearly stated our position. A progressive form of taxation through asking the better-off to contribute is far preferable to asking business to do it, as are the Government.
      Mr. Christopher Chope: I say at the outset that we shall oppose the amendments. They position the Liberal Democrats to the left of Labour, and if they want to establish those credentials there are better ways of doing it than by tabling such amendments.
      I am confused about how the amendments fit in with the Liberal Democrats' alternative Budget. When that was published on 8 April, they pledged to increase the rate of income tax by 1 per cent. for all income up to £100,000. As I understand it, the amendments would not increase by 1 per cent. national insurance contributions for employees in the range of earnings between £35,000 and £100,000, but increase to 50 per cent. the burden on employees earning more than £100,000.
      Matthew Taylor: I do not know if the hon. Gentleman did his own research or got someone else to do it, but it was pretty poor. We proposed 1p on the basic rate plus a new 50 per cent. rate—a 10 per cent. increase—on earnings of more than £100,000. Combined with the Government's 1p national insurance rise, the amendment would replicate that, and that is its purpose.
      Mr. Chope: I am grateful to the hon. Gentleman for explaining that. The Paymaster General and I were under the impression that the alternative Budget was expressed in terms that would cause a lot of confusion.
      620
      5 pm
      The idea of imposing a 50 per cent. marginal rate of tax on individuals earning in excess of £100,000 is obscene these days. Political parties on the continent—most recently in France—are campaigning to reduce the burden of taxation. They realise that it directly affects the willingness of individuals to participate in the economy and, in particular, their ability to attract the most able employees. It will be very damaging for our economy if we burden employees with penal tax rates of 50 per cent. for those earning more than £100,000.
      Many anomalies flow from the proposal. For example, if two married people each earn £60,000, they would pay tax at the 40 per cent. rate, but if one of them is at home looking after the children while the other earns £120,000, £20,000 of their earnings would be subject to the 50 per cent. marginal rate of tax. That would not be fair.
      Matthew Taylor: As the hon. Gentleman is questioning the Liberal Democrat position, will he clarify whether he intends to oppose the employers' national insurance rise? If that is the case, and as he does not agree with an alternative way to raise the money, does he accept that the NHS will not get the extra money? Are the Conservatives now opposing extra money for the health service?
      Mr. Chope: I thought that the hon. Gentleman was here for Second Reading when we alone among the Opposition parties firmly declared that the Bill was bad and voted against it, unlike his party which supported it. We are against the Bill. The NHS is already wasting a great deal of money, as the figures suggest. It is worth repeating what I said on Second Reading. Stuart Emslie, a senior civil servant, has said that the NHS in England alone is estimated to be wasting between £7 billion and £10 billion from a budget of £54 billion as a result of, for instance, fraud. We want to see the reforms. The Government continue to say that they will invest more money in the health service and that that will be accompanied by reform, but we have seen no sign of that and yet they still inflict the higher imposts.
      Matthew Taylor: So that we are absolutely clear on this: the Conservatives are against extra money for the health service, reformed or otherwise.
      Mr. Chope: That is a travesty of what I said. The hon. Gentleman might disagree, but people can make their own judgment by reading the Official Report. It is obvious that I did not say what he claims because otherwise he would not have felt the need to intervene again to put words in my mouth. I have given way three times to him and it is clear that he realises that he is on the losing end of the argument.
      I agree with the Liberal Democrats that the burden on employers will damage the economy. I am not prepared to accept, however, that the solution is to impose a high burden of extra taxation on those who earn more than £100,000 a year, which is not so unusual in London and the south-east. It will damage our economy if we send out a signal to the ablest and the best entrepreneurs in the world that we are no longer an entrepreneurial society and wish to penalise people by imposing higher rates of tax. One of the best things achieved by Margaret Thatcher's Government was the reduction of the penal high rates of personal taxation.
      The Paymaster General (Dawn Primarolo): This is already developing into an interesting debate as we watch the fisticuffs between the Liberal Democrats and the Conservatives about some of the finer points of deciding how funding for the national health service should be raised. In the case of the Conservatives—this is not such a fine point—the argument is about whether that funding should be raised in the first place.
      I say to the hon. Member for Oxford, West and Abingdon (Dr. Harris) that he is wrong on every count, and I should like to explain briefly to him the reasons why. He started by saying that the Liberal Democrats were against the measure because it was imposed by stealth. He also said that it was not good for business, even though the amendments are only about employees, and that it does not raise money in the fairest way. He went on to argue that there was a more progressive approach for raising money for the national health service.
      In this Committee of the whole House, the Government lay before hon. Members a judgment. First, the national health service needs more resources after sustained underinvestment for a long period, and those resources have to be considerable and guaranteed for a period. Secondly, the approach to how that money is raised must be taken on the fairest basis that can be achieved. Thirdly, the Government pinned their decisions on the basis of the Beveridge principle. I have to say to the hon. Member for Oxford, West and Abingdon that his amendments are neither progressive nor fair, which indicates the folly of trying to tinker with a little bit of the system, rather than looking at the whole system and how it is to be managed. Indeed, it could be argued that his amendments would introduce taxation by stealth. What he said that he was seeking to achieve is not what his amendments would deliver.
      First, the amendments would mean that people who earn less than the upper earnings limit would still pay the extra 1 per cent. on all their earnings. Secondly, those whose earnings are between the upper earnings limit and £100,000 a year would pay the extra 1 per cent. only on a part of their income. I assume that a drafting error was made in relation to the amendments' implied reference to people who earn £100,000 a week: I assume that they were intended to refer to people who earn £100,000 a year. I will be generous to the Committee and assume that that was the intention.
      The amendments would also ensure that those who earn £100,000 pay 11 per cent. on their first slice of income up to the upper earnings limit, but nothing at all between the upper earnings limit and £100,000. People would then pay 10 per cent. on £100,000 and more. I do not know what definition of the word "progressive" the hon. Member for Oxford, West and Abingdon is using, but that is not a progressive system.
      Mr. Bercow: There are very few occasions on which the Paymaster General and I agree, but we do so at least in part today. She is guilty of a characteristic understatement in her critique of the Liberal Democrats, whose amendments are, frankly, hare-brained and madcap in equal measure—and there is nothing unusual about that. I say to the Committee and the hon. Lady that there is one thing of which we are not accusing the Government in relation to the Bill's tax increases, as distinct from a number of their predecessors: we are not suggesting that they are stealth taxes in any sense—far from it.
      622
      The Liberal Democrats are hopelessly behind the times and have got it wrong. These tax increases are brazen, brutal and a triumph of hope over reality.
      Dawn Primarolo: The hon. Gentleman has never knowingly understated anything in this House, and he rises to the challenge now.
      I was trying to make the point that when the Opposition advance a principle in debate on the Floor of the House, it is their responsibility to ensure that their amendments would deliver on that principle. Perhaps the amendments have indicated to the hon. Member for Oxford, West and Abingdon how difficult it is to combine in practice the whole cascade of principles—progressiveness, fairness, certainty and delivery of necessary resources—that he articulates so readily. That is probably one of the many reasons why we are the Government and the Liberal Democrats are not.
      The hon. Gentleman cannot even get his figures right. He went on to say that the amendments set out a much fairer method—that his party is committed to raising the money for the national health service, but in a different way. I have news for him: the amendments would raise less, not more, for the NHS. That is true even before taking into account the fact that, as experience has shown, the tax system has to be sensitive in understanding that people, especially those whose pay is in the higher earnings range, sometimes engage in finding ways not to pay tax. Benefits in kind, whereby people find other ways to have their salary paid, are a classic example.
      Dr. Evan Harris: The Conservative spokesman described a 50 per cent. rate of tax on earnings of more than £100,000 as "obscene". Does the Paymaster General think it is obscene? If so, is that why she opposes it, or is she just frightened of the possibility of avoidance or evasion? This morning we heard that the Government are to clamp down on benefits scroungers—the poorest people who cheat the system. Why are they not equally committed to dealing with the best-off people who cheat the system through evasion?
      Dawn Primarolo: That is a very poor intervention; I am disappointed in the hon. Gentleman. This is not a sixth-form debating society, but the House of Commons. I have explained patiently and carefully why the Liberal Democrat amendments would not deliver more resources for the health service and why they are not progressive. In fact, they have all the characteristics of stealth, in that the hon. Gentleman claims he is trying to advance one principle but his amendments relate to another. He claims, in his party's name, that what he proposes is fairer.
      Fortunately, I do not have to account for the views of the shadow Chief Secretary to the Treasury, and I am sure that he is eternally grateful for that. He will advance his party's views. Equally, I can say without fear of contradiction that I have never flinched from advancing the views that I believe to be right, either in the House or anywhere else.
      The principles of the Bill represent the fairest way to build on the Beveridge principles and to guarantee the extra resources that are necessary for the NHS. I look forward to the next group of amendments and to debating the reasons why it is right and proper that employers should make their contribution. I ask my hon. Friends to reject these

      623
      amendments because they are incompetent, they would cut money from the health service, they are unfair and they reveal the Liberals undertaking a stealth tax.
      Matthew Taylor: I shall respond briefly to the key points made in the debate.
      Once again, we have heard the Conservatives advance the argument for not imposing tax increases while they remain unprepared to defend the logical consequence of that argument, which is that they believe the NHS should get less resources than the Government plan. That would mean patients not getting the doctors and nurses they desperately need. In that respect, there is nothing between us and the Government: we both believe that the NHS desperately needs that money. We have been arguing so for many years and we at least explained at the general election that we would raise taxes accordingly as we could see no other way of achieving that end. It is a pity that Labour did not do the same, but we are glad that it has now accepted that argument. People outside the House must understand that the Conservatives are hiding a stealth cut that would deny the NHS the doctors and nurses that it desperately needs to treat patients.
      5.15 pm
      We thank the Minister for her response, but let us be clear about the proposal. First, the contributions are a stealth tax because Labour did not present a case for them at the general election. We regret that, not simply because they should have been debated properly and democratically, but because there is public cynicism about politicians' promises—and that affects all political parties, not just the Labour party. The proposal has simply reinforced people's belief that they cannot trust politicians when it comes to getting votes at the ballot box, as what they do afterwards bears little relation to what they say in their manifesto.
      Mr. Kevan Jones: First, I am not quite sure how one hides a stealth tax. Secondly, the Liberal Democrats have set out plans for tax increases for those earning more than £100,000, and taxation for pensioners. Will "Focus" go through people's letterboxes in the next few weeks saying that the Liberals will put up taxes for those people?
      Matthew Taylor: The hon. Gentleman asked how an increase in national insurance can be hidden. The answer is that one does not tell people about it before the election, which is how the Labour party behaved; that is what was stealthy. Everyone can see that now, but they do not have a chance to vote on it.
      As for whether we would campaign on the tax rises, we did campaign on them at the last general election. We issued leaflets saying that taxes would have to rise and that ordinary taxpayers would have to pay an extra penny on their income tax, which is more than Labour Members did. However, they have effectively replicated our plans in their proposals for national insurance. We also spelled out the need for an extra increase for people on high earnings. Although some people agreed, others attacked
      624
      our proposals, but at least there was a chance for them to do so, which is not what happened with the Labour party's hidden policies.
      Mr. Jones: So, "Focus" will go out in the leafy suburbs of constituencies in the south-east, saying that there will be an increase in income tax for pensioners.
      Matthew Taylor: We told people that before they voted, not after. The hon. Gentleman has no grounds on which to criticise us. Our strategy may have been foolhardy and risky and may even have lost us some votes, but we made sure that people knew where we stood before the election, which is more than the hon. Gentleman's party did.
      The Minister said that our proposal would not raise as much money as the Government's, which is true. We made it clear before tabling our amendments that we would use the income tax route, which is broader based than national insurance and does not suffer from the problem of evasion that she raised. The only reason that the amendments did not include that proposal is that it would not be in order in our debate. To be honest, any Front Bencher will always criticise details of their opponents' proposals, which may even include a drafting error. However, we have made clear the principle of our amendments—there cannot be a Member in the Committee who misunderstands it—and we hope that it will be accepted.
      Mr. Michael Weir: By and large, we are inclined to support the income tax route rather than the national insurance one. However, will the hon. Gentleman comment on the Government's point that there is a gap in the upper earnings limit of £100,000, which would mean that people earning substantial sums, like ourselves, would not pay increased national insurance, which is hardly fair?
      Matthew Taylor: That is not right, because the hon. Gentleman would pay extra national insurance, as would everyone else. However, it is true that we would not extend the limit on national insurance from £40,000 to £100,000. That replicates our policy at the last election and, I think, the Conservative party's policy. We argued for an increase in the basic rate, which is roughly what the national insurance increase, as is, replicates. We argued also for an extra tax rate on those earning more than £100,000.
      Dawn Primarolo: I remind the hon. Gentleman of what his amendments would do. Those who earn £100,000 would pay 11 per cent. on the first slice of their income—that is, up to the upper earnings limit. They would pay nothing on the second slice of their income up to £100,000. They would then pay 10 per cent. on everything above £100,000. A zero rate would be interposed. I am sure that the hon. Gentleman is fully aware of what his amendments would do. Perhaps he will explain why that is progressive.
      Matthew Taylor: The hon. Lady will find that that is the present position. The difference is that we are asking people on more than £100,000 to pay more. We believe that at that level people can afford to pay more. If she believes that people can afford to pay more at a lower level than that, she is welcome to argue accordingly.

      625
      That is our view, and it was our view at the general election. We believe that very wealthy people can afford to pay substantially more as a contribution towards the NHS. Crucially, that is a better route than that of imposing an increase in tax on employers.
      We know that manufacturing industry particularly, and other industries in internationally exposed sectors—farming is another good example—are suffering hugely because of the exchange rate. Industries such as car manufacturing are withdrawing from the United Kingdom: Ford cars are no longer produced in the UK; there has been a major closure of a Vauxhall plant; and BMW is pulling out of Rover, for example. These moves will all be made worse by the Government's decision to choose to increase employers' contributions. That is the tax on jobs, the very tax that the Government argued should be cut on the basis of their pollution taxes. They said, "Let's cut the tax on jobs and tax pollution instead." Now they are to increase the tax on jobs as if the previous arguments never existed. It is the Liberal Democrats who are following through on the argument against the tax on jobs.
      Mr. Mark Francois: The hon. Gentleman mentioned public cynicism. Does he recall the campaigning leaflet—in fact, it was a guide—that the Liberal Democrats produced a few months ago, which was leaked? On these types of issue, it said, "Be shameless. You don't have the responsibility of administration. You do not have to worry about how things actually work. Agitate; cause trouble." Are not the Liberal Democrats' amendments a classic example of a lack of responsibility?
      Matthew Taylor: Only the Conservatives have been shameless. They say that they want more money for health services, but they always vote against extra spending. The direct result of the policies that the hon. Gentleman supports would be fewer doctors and nurses treating patients. That would mean ever longer waiting lists under the Tories, and we know why—it is because Conservatives do not believe in the NHS. They want to get rid of it.
      No doubt the hon. Gentleman will support amendments introduced by those on the Opposition Front Bench that would subsidise by tax breaks those who take up and can afford private insurance at the expense of investment in the NHS for the great majority.
      Mr. Bercow: Will the hon. Gentleman give way?
      Matthew Taylor: I shall be happy to give way to the hon. Gentleman and to debate his point. If the Conservative party is opposed to increases in employers' national insurance but is in favour of extra money for health services, how would it raise the extra money?
      Mr. Bercow: I wish that the hon. Gentleman would follow the logic of the argument and—[Interruption.] It is no good Liberal Democrat Members chuntering from a sedentary position, in evident ignorance of the progression of the amendments to which my hon. Friends and I will shortly be speaking. The hon. Gentleman should be aware that the late Harold Macmillan famously and wisely said that the Liberals had some good ideas and some original ideas. He added that unfortunately their good ideas were
      626
      not original and their original ideas were not any good. Today, they have produced ideas that are neither good nor original. They really have surpassed themselves.
      Matthew Taylor: The difference is that the Conservative Front Bench has no answers at all and no ideas. It was, after all, Harold Macmillan who criticised the Conservative party in the 1980s for selling the family silver, and part of that sale was the rundown of investment in the health service to pay for tax cuts. This debate is, in part, about how we can raise money to rectify a decades-long underinvestment that has left patients suffering, and doctors and nurses struggling to cope in under-equipped and worn-out wards.
      The hon. Gentleman must recognise this. It is perfectly legitimate for him to say that he does not want investment in the national health service—that he does not even want the national health service, and would not spend money on it but would cut taxes instead. It is not legitimate for him to argue against a way of funding NHS improvements, while pretending that the Conservatives nevertheless support those improvements. The improvements cannot be made unless the money is found.
      The Conservatives' position is wholly illegitimate. They try to pander to those who want tax cuts—and of course we all want tax cuts if we can get them—without admitting that the cuts will be made at the expense of the national health service. That is the effect of the amendments for which the hon. Gentleman will presumably attempt to argue later, although so far he has presented no arguments, just a bit of bile. That is the stock in trade of the Conservative Front Bench at present, because it has no arguments.
      I hope that the Committee will divide on the principle, but I think we would best do that by voting on amendment No. 2.
      Dr. Evan Harris: I endorse what has been said by my hon. Friend the Member for Truro and St. Austell (Matthew Taylor). I said at the outset that we would try to press amendment No. 2 to a Division. I therefore beg to ask leave to withdraw amendment No. 1.
      Amendment, by leave, withdrawn.
      Amendment proposed: No. 2, in clause 1, page 2, line 8, leave out "1 per cent." and insert—
      '10 per cent. on earnings over £100,000'.—[Dr. Evan Harris.]
      Question put, That the amendment be made:—
      The Committee proceeded to a Division.
      The Second Deputy Chairman: Will the Serjeant at Arms investigate the delay in the No Lobby?
      The Committee having divided: Ayes 43, Noes 384.

      Division No. 254]

      [5.27 pm

      AYES

      Baker, Norman

      Carmichael, Alistair

      Barrett, John

      Chidgey, David

      Beith, Rt Hon A J

      Cotter, Brian

      Breed, Colin

      Davey, Edward (Kingston)

      Brooke, Mrs Annette L

      Doughty, Sue

      Burnett, John

      Foster, Don (Bath)

      Burstow, Paul

      George, Andrew (St Ives)

      Cable, Dr Vincent

      Gidley, Sandra

      Calton, Mrs Patsy

      Green, Matthew (Ludlow)

      Campbell, Rt Hon Menzies (NE Fife)

      Hancock, Mike

      Harris, Dr Evan (Oxford W)

      627

      Harvey, Nick

      Rendel, David

      Heath, David

      Russell, Bob (Colchester)

      Holmes, Paul

      Sanders, Adrian

      Hughes, Simon (Southwark N)

      Stunell, Andrew

      Jones, Nigel (Cheltenham)

      Taylor, Matthew (Truro)

      Kirkwood, Archy

      Tyler, Paul

      Lamb, Norman

      Webb, Steve

      Laws, David

      Willis, Phil

      Marsden, Paul (Shrewsbury)

      Younger-Ross, Richard

      Moore, Michael

      Oaten, Mark

      Tellers for the Ayes:

      Pugh, Dr John

      Tom Brake and

      Reid, Alan (Argyll & Bute)

      Sir Robert Smith.

      NOES

      Adams, Mrs Irene (Paisley N)

      Clelland, David

      Ainger, Nick

      Clwyd, Ann

      Ainsworth, Bob (Cov'try NE)

      Coaker, Vernon

      Allen, Graham

      Coffey, Ms Ann

      Amess, David

      Coleman, Iain

      Arbuthnot, Rt Hon James

      Conway, Derek

      Armstrong, Rt Hon Ms Hilary

      Cook, Frank (Stockton N)

      Atkinson, Peter (Hexham)

      Cook, Rt Hon Robin (Livingston)

      Austin, John

      Cooper, Yvette

      Bacon, Richard

      Corbyn, Jeremy

      Bailey, Adrian

      Cormack, Sir Patrick

      Baird, Vera

      Corston, Jean

      Barker, Gregory

      Cox, Tom

      Barnes, Harry

      Cran, James

      Barron, Kevin

      Cranston, Ross

      Battle, John

      Cruddas, Jon

      Beard, Nigel

      Cryer, John (Hornchurch)

      Begg, Miss Anne

      Cummings, John

      Bennett, Andrew

      Cunningham, Jim (Cov'try S)

      Benton, Joe

      Cunningham, Tony (Workington)

      Bercow, John

      Curry, Rt Hon David

      Beresford, Sir Paul

      Dalyell, Tam

      Betts, Clive

      Davey, Valerie (Bristol W)

      Blackman, Liz

      Davies, Rt Hon Denzil (Llanelli)

      Blizzard, Bob

      Davies, Geraint (Croydon C)

      Blunt, Crispin

      Davies, Quentin (Grantham)

      Boswell, Tim

      Dawson, Hilton

      Bottomley, Peter (Worthing W)

      Dean, Mrs Janet

      Bradley, Rt Hon Keith (Withington)

      Denham, Rt Hon John

      Bradley, Peter (The Wrekin)

      Dismore, Andrew

      Bradshaw, Ben

      Djanogly, Jonathan

      Brady, Graham

      Dobbin, Jim

      Brazier, Julian

      Dobson, Rt Hon Frank

      Brennan, Kevin

      Donohoe, Brian H

      Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

      Doran, Frank

      Dowd, Jim

      Brown, Russell (Dumfries)

      Drew, David

      Browning, Mrs Angela

      Drown, Ms Julia

      Bryant, Chris

      Duncan, Peter (Galloway)

      Buck, Ms Karen

      Eagle, Angela (Wallasey)

      Burden, Richard

      Edwards, Huw

      Burnham, Andy

      Efford, Clive

      Burns, Simon

      Ellman, Mrs Louise

      Cairns, David

      Ewing, Annabelle

      Cameron, David

      Fabricant, Michael

      Campbell, Alan (Tynemouth)

      Fallon, Michael

      Campbell, Mrs Anne (C'bridge)

      Farrelly, Paul

      Campbell, Ronnie (Blyth V)

      Field, Rt Hon Frank (Birkenhead)

      Caplin, Ivor

      Field, Mark (Cities of London)

      Casale, Roger

      Fisher, Mark

      Caton, Martin

      Fitzsimons, Mrs Lorna

      Cawsey, Ian

      Flight, Howard

      Challen, Colin

      Flint, Caroline

      Chapman, Ben (Wirral S)

      Flook, Adrian

      Chope, Christopher

      Flynn, Paul

      Clapham, Michael

      Follett, Barbara

      Clark, Dr Lynda (Edinburgh Pentlands)

      Forth, Rt Hon Eric

      Foster, Michael (Worcester)

      Clark, Paul (Gillingham)

      Foster, Michael Jabez (Hastings)

      Clarke, Rt Hon Tom (Coatbridge)

      Foulkes, George

      Clarke, Tony (Northampton S)

      Fox, Dr Liam

      628

      Francis, Dr Hywel

      Knight, Jim (S Dorset)

      Francois, Mark

      Kumar, Dr Ashok

      Galloway, George

      Laing, Mrs Eleanor

      Gapes, Mike

      Lait, Mrs Jacqui

      Gardiner, Barry

      Lansley, Andrew

      Garnier, Edward

      Lazarowicz, Mark

      George, Rt Hon Bruce (Walsall S)

      Leigh, Edward

      Gerrard, Neil

      Levitt, Tom

      Gibb, Nick

      Lewis, Dr Julian (New Forest E)

      Gillan, Mrs Cheryl

      Liddell, Rt Hon Mrs Helen

      Gilroy, Linda

      Liddell-Grainger, Ian

      Godsiff, Roger

      Lidington, David

      Goodman, Paul

      Linton, Martin

      Gray, James

      Lloyd, Tony

      Grayling, Chris

      Loughton, Tim

      Green, Damian (Ashford)

      Love, Andrew

      Greenway, John

      Lucas, Ian

      Grieve, Dominic

      Luff, Peter

      Griffiths, Jane (Reading E)

      Luke, Iain

      Griffiths, Nigel (Edinburgh S)

      McAvoy, Thomas

      Griffiths, Win (Bridgend)

      McCabe, Stephen

      Grogan, John

      McCafferty, Chris

      Gummer, Rt Hon John

      McCartney, Rt Hon Ian

      Hall, Mike (Weaver Vale)

      McDonagh, Siobhain

      Hamilton, David (Midlothian)

      McFall, John

      Hammond, Philip

      McGuire, Mrs Anne

      Hanson, David

      McIntosh, Miss Anne

      Harris, Tom (Glasgow Cathcart)

      McIsaac, Shona

      Hayes, John

      MacKay, Rt Hon Andrew

      Healey, John

      McKechin, Ann

      Henderson, Ivan (Harwich)

      McKenna, Rosemary

      Hendrick, Mark

      Mackinlay, Andrew

      Hendry, Charles

      Maclean, Rt Hon David

      Hepburn, Stephen

      McLoughlin, Patrick

      Heppell, John

      McNamara, Kevin

      Hill, Keith

      MacShane, Denis

      Hinchliffe, David

      Mactaggart, Fiona

      Hoban, Mark

      McWalter, Tony

      Hodge, Margaret

      Mahmood, Khalid

      Hoey, Kate

      Mahon, Mrs Alice

      Hood, Jimmy

      Malins, Humfrey

      Hoon, Rt Hon Geoffrey

      Mallaber, Judy

      Hopkins, Kelvin

      Mandelson, Rt Hon Peter

      Horam, John

      Mann, John

      Howard, Rt Hon Michael

      Maples, John

      Howarth, Rt Hon Alan (Newport E)

      Marris, Rob

      Howarth, George (Knowsley N)

      Marsden, Gordon (Blackpool S)

      Howarth, Gerald (Aldershot)

      Martlew, Eric

      Howells, Dr Kim

      Mates, Michael

      Hughes, Beverley (Stretford)

      Maude, Rt Hon Francis

      Humble, Mrs Joan

      Mawhinney, Rt Hon Sir Brian

      Hunter, Andrew

      May, Mrs Theresa

      Hurst, Alan

      Mercer, Patrick

      Iddon, Dr Brian

      Miliband, David

      Illsley, Eric

      Miller, Andrew

      Irranca-Davies, Huw

      Mitchell, Andrew (Sutton Coldfield)

      Jack, Rt Hon Michael

      Moffatt, Laura

      Jackson, Glenda (Hampstead)

      Mole, Chris

      Jackson, Robert (Wantage)

      Moonie, Dr Lewis

      Jenkins, Brian

      Moran, Margaret

      Johnson, Alan (Hull W & Hessle)

      Morris, Rt Hon Estelle

      Jones, Helen (Warrington N)

      Mountford, Kali

      Jones, Jon Owen (Cardiff C)

      Mudie, George

      Jones, Kevan (N Durham)

      Mullin, Chris

      Jones, Martyn (Clwyd S)

      Munn, Ms Meg

      Joyce, Eric

      Murphy, Denis (Wansbeck)

      Keen, Alan (Feltham & Heston)

      Murphy, Jim (Eastwood)

      Keen, Ann (Brentford & Isleworth)

      Murrison, Dr Andrew

      Kelly, Ruth

      Naysmith, Dr Doug

      Kemp, Fraser

      O'Brien, Stephen (Eddisbury)

      Key, Robert

      O'Neill, Martin

      Khabra, Piara S

      Organ, Diana

      Kidney, David

      Osborne, George (Tatton)

      Kilfoyle, Peter

      Page, Richard

      King, Ms Oona (Bethnal Green)

      Palmer, Dr Nick

      Kirkbride, Miss Julie

      Pearson, Ian

      629

      Perham, Linda

      Stoate, Dr Howard

      Pickthall, Colin

      Strang, Rt Hon Dr Gavin

      Pike, Peter

      Stringer, Graham

      Plaskitt, James

      Stuart, Ms Gisela

      Pollard, Kerry

      Sutcliffe, Gerry

      Pond, Chris

      Swayne, Desmond

      Pope, Greg

      Swire, Hugo

      Pound, Stephen

      Syms, Robert

      Prentice, Ms Bridget (Lewisham E)

      Tapsell, Sir Peter

      Price, Adam

      Taylor, Ms Dari (Stockton S)

      Primarolo, Dawn

      Taylor, Sir Teddy

      Prisk, Mark

      Thomas, Gareth R (Harrow W)

      Purchase, Ken

      Timms, Stephen

      Quinn, Lawrie

      Tipping, Paddy

      Rammell, Bill

      Todd, Mark

      Randall, John

      Tredinnick, David

      Rapson, Syd

      Trickett, Jon

      Redwood, Rt Hon John

      Truswell, Paul

      Reed, Andy (Loughborough)

      Turner, Dennis (Wolverh'ton SE)

      Robathan, Andrew

      Turner, Dr Desmond (Kemptown)

      Robertson, Hugh (Faversham)

      Turner, Neil (Wigan)

      Robertson, Laurence (Tewk'b'ry)

      Twigg, Derek (Halton)

      Roe, Mrs Marion

      Tyrie, Andrew

      Rooney, Terry

      Vaz, Keith

      Ross, Ernie

      Viggers, Peter

      Roy, Frank

      Vis, Dr Rudi

      Ruddock, Joan

      Walley, Ms Joan

      Ruffley, David

      Ward, Ms Claire

      Ryan, Joan

      Wareing, Robert N

      Salter, Martin

      Waterson, Nigel

      Sarwar, Mohammad

      Watkinson, Angela

      Sayeed, Jonathan

      Watts, David

      Sedgemore, Brian

      Weir, Michael

      Selous, Andrew

      Whitehead, Dr Alan

      Shephard, Rt Hon Mrs Gillian

      Whittingdale, John

      Shipley, Ms Debra

      Widdecombe, Rt Hon Miss Ann

      Simmonds, Mark

      Wiggin, Bill

      Simon, Siôn

      Willetts, David

      Singh, Marsha

      Williams, Rt Hon Alan (Swansea W)

      Skinner, Dennis

      Smith, Rt Hon Andrew (Oxford E)

      Williams, Hywel (Caernarfon)

      Smith, Rt Hon Chris (Islington S)

      Wills, Michael

      Smith, Geraldine (Morecambe)

      Wilshire, David

      Smith, John (Glamorgan)

      Winnick, David

      Smith, Llew (Blaenau Gwent)

      Winterton, Nicholas (Macclesfield)

      Soley, Clive

      Winterton, Ms Rosie (Doncaster C)

      Southworth, Helen

      Wishart, Pete

      Spelman, Mrs Caroline

      Woodward, Shaun

      Spicer, Sir Michael

      Woolas, Phil

      Spring, Richard

      Wray, James

      Stanley, Rt Hon Sir John

      Wright, David (Telford)

      Starkey, Dr Phyllis

      Wright, Tony (Cannock)

      Steen, Anthony

      Wyatt, Derek

      Steinberg, Gerry

      Yeo, Tim

      Stevenson, George

      Stewart, David (Inverness E)

      Tellers for the Noes:

      Stewart, Ian (Eccles)

      Angela Smith and

      Stinchcombe, Paul

      Jim Fitzpatrick.

      Question accordingly agreed to.
      Mr. Nicholas Winterton: On a point of order, Sir Michael. You will be aware that great difficulties were encountered by many hon. Members from both sides of the House in getting into the No Lobby. In fact, many hon. Members who were here in time to vote could not do so because of the numbers voting. Happily, the numbers were great because the Government and Her Majesty's Opposition were voting together, which shows that this House can occasionally work together. This matter should be looked into. The numbers coming in from behind the Speaker's Chair into the Lobby were so great that many Members who would normally have had their names registered as voting will not have
      630
      their names registered. Sadly, they were unable to get in to the Division Lobby in time to vote. Would you look into this matter?
      Mr. Gerald Kaufman: Further to that point of order, Sir Michael. The hon. Member for Macclesfield (Mr. Winterton) has drawn your attention to one problem and I wish to draw it to another. The Division bell did not ring on my corridor and I did not know that the Division was on until I happened to look up at the Annunciator. I am sorry to say—and I confess to the Whips accordingly—that I could not vote, and I would therefore be grateful if you could have the functioning of the bells investigated.
      The Second Deputy Chairman: I have heard both points of order. They will be recorded in the Official Report and I am sure that they will both be investigated.
      5.45 pm
      Question proposed, That the clause stand part of the Bill.
      Mr. Chope: Clause 1 goes to the heart of the Bill. We are against the Bill and against clause 1 in particular because it will effectively raise the rate of income tax on everybody, even those with very modest incomes. People on just £4,615 a year will have a marginal rate of tax next year of 21 per cent., instead of 20 per cent. The clause is in breach of the Government's promises made before the general election. It will provide more money for the health service but without the reforms that we see as an essential part of any extra funding.
      Dawn Primarolo: Clause 1 provides the changes to the class 1 primary contributions paid by employees and lays out the increase to 11 per cent. up to the upper earnings limit and then the 1 per cent. beyond. The people of Britain have clearly stated that they wish the health service in the UK to be the best in the world. They also recognise that to have the best health service in the world, the resources need to be made available. They have also stated loudly and clearly that they believe that they should pay to ensure that that first-class health service is delivered fairly, based on the Beveridge principles. That funding will ensure that we can correct the underinvestment over which the Conservatives presided in their terms of office. It will ensure that the NHS is available comprehensively and on the basis of need, not ability to pay. I commend clause 1 to the Committee.
      Dr. Evan Harris: I rise briefly to express my astonishment that the Conservatives can oppose a clause standing part without saying what they would put in its place. Clause 1 will provide significant additional funding for health services, and the Conservatives oppose the raising of those resources. However, they are unwilling to state which hospitals they would close, which health service staff they would not employ, which drugs would not be provided or what other taxes they would raise. That is not responsible opposition and it is certainly not effective opposition. Because we need the resources for the health service, the Liberal Democrats will support clause 1 standing part of the Bill.
      John Mann: The Sunday Telegraph, which is known as a reputable newspaper that takes a wonderful

      631
      array of polls—doubtless with extreme accuracy—managed to come up with a figure of 76 per cent. of the public approving of the 1 per cent. increase in national increase contributions to fund the health service. That is certainly mirrored in my postbag.
      I recall challenging the hon. Member for Aylesbury (Mr. Lidington) to put a question about national insurance contributions on his excellent website, alongside those on immigration and asylum. Indeed, I offered the services of my webmaster to assist with framing such a question. Unfortunately, my kind offer was rebuffed, so we still do not have the definitive view from Aylesbury. However, the view from Bassetlaw, as I know from visiting the Bassetlaw district general hospital and talking to patients and staff, has been unanimous. A cross-section of 60 staff held a unanimous view. Indeed, not one was interested in talking about the 1 per cent. increase coming out of their salary.
      Patients were also unanimous in their view. My hon. Friend the Under-Secretary of State for Health kindly accompanied me on the visit. Every patient whom she and I saw in a visit lasting two and a half hours was asked his or her view, and it was unanimous. I do not expect the unanimity felt in Bassetlaw, which has an excellent hospital and a tradition of good NHS provision, to be mirrored 100 per cent. in every corner of the United Kingdom. However, a figure of 76 per cent. across the country is reasonable.
      Mr. Bercow: I am grateful to the hon. Gentleman. We first jousted in 1986 and carried on doing so on Lambeth council until 1990. As I told him then, I thought that he was a peculiar individual, and nothing in the intervening 16 years has caused me to revise that opinion. Does he accept that people are likely to be anxious about a tax when they pay it and not before? Does he appreciate that, faced with the prospect of giving modest and gentle assent to his arguments or being embroiled in a lengthy and anorakish exchange in the middle of a hospital, some of his constituents might have decided that it was easier and less painful to ignore him?
      John Mann: The pain is greatly reduced by the fact that we were celebrating the first anniversary of the day care centre at Bassetlaw district general hospital, which, as my hon. Friend the Minister said, is the best facility that she has ever seen anywhere in the national health service.
      The hon. Gentleman refers back to May 1986, when he and I were both elected to Lambeth council. That was just when the Conservative increases in employers' national insurance contributions kicked in. I do not recall him hiding away in horror because of that during our successful campaign to get elected, or, indeed, the electorate raising the issue at all, let alone with any great ferocity. The issue throughout our campaign was the health service and how to fund it.
      Finally, there is obviously a great air of anticipation about the World cup. I commend Radio 5 Live for its superb coverage; I have listened to it at every opportunity when travelling in my constituency over the past two weeks. On 31 May, two hours before the World cup was about to kick off, it took its road show to Ashford in
      632
      Kent, where it had a large screen. It asked French business people why they were doing business in Ashford. One after the other, they stated that France was a high-tax economy in which to do business while Britain was at the moment a low-tax economy, and that that was why they had relocated from France to Britain, under this Government. I rest my case.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 315, Noes 125.

      Division No. 255]

      [5.55 pm

      AYES

      Adams, Mrs Irene (Paisley N)

      Coffey, Ms Ann

      Ainsworth, Bob (Cov'try NE)

      Coleman, Iain

      Alexander, Douglas

      Cook, Frank (Stockton N)

      Allen, Graham

      Cooper, Yvette

      Armstrong, Rt Hon Ms Hilary

      Corston, Jean

      Atkins, Charlotte

      Cotter, Brian

      Austin, John

      Cox, Tom

      Bailey, Adrian

      Cranston, Ross

      Baird, Vera

      Cruddas, Jon

      Baker, Norman

      Cryer, John (Hornchurch)

      Banks, Tony

      Cummings, John

      Barnes, Harry

      Cunningham, Jim (Cov'try S)

      Barrett, John

      Cunningham, Tony (Workington)

      Barron, Kevin

      Dalyell, Tam

      Beard, Nigel

      Davey, Edward (Kingston)

      Begg, Miss Anne

      Davey, Valerie (Bristol W)

      Benn, Hilary

      Davies, Geraint (Croydon C)

      Bennett, Andrew

      Dawson, Hilton

      Benton, Joe

      Dean, Mrs Janet

      Betts, Clive

      Dismore, Andrew

      Blackman, Liz

      Dobbin, Jim

      Blears, Ms Hazel

      Donohoe, Brian H

      Blizzard, Bob

      Doran, Frank

      Bradley, Rt Hon Keith (Withington)

      Doughty, Sue

      Bradley, Peter (The Wrekin)

      Dowd, Jim

      Bradshaw, Ben

      Drew, David

      Brake, Tom

      Drown, Ms Julia

      Breed, Colin

      Eagle, Angela (Wallasey)

      Brennan, Kevin

      Edwards, Huw

      Brooke, Mrs Annette L

      Efford, Clive

      Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

      Ellman, Mrs Louise

      Ewing, Annabelle

      Brown, Russell (Dumfries)

      Farrelly, Paul

      Bruce, Malcolm

      Field, Rt Hon Frank (Birkenhead)

      Bryant, Chris

      Fisher, Mark

      Buck, Ms Karen

      Fitzpatrick, Jim

      Burden, Richard

      Fitzsimons, Mrs Lorna

      Burnham, Andy

      Flint, Caroline

      Burstow, Paul

      Flynn, Paul

      Cairns, David

      Follett, Barbara

      Calton, Mrs Patsy

      Foster, Don (Bath)

      Campbell, Alan (Tynemouth)

      Foster, Michael Jabez (Hastings)

      Campbell, Mrs Anne (C'bridge)

      Foulkes, George

      Campbell, Ronnie (Blyth V)

      Francis, Dr Hywel

      Caplin, Ivor

      Galloway, George

      Carmichael, Alistair

      Gapes, Mike

      Casale, Roger

      Gardiner, Barry

      Caton, Martin

      George, Andrew (St Ives)

      Cawsey, Ian

      George, Rt Hon Bruce (Walsall S)

      Challen, Colin

      Gerrard, Neil

      Chapman, Ben (Wirral S)

      Gidley, Sandra

      Chidgey, David

      Gilroy, Linda

      Clapham, Michael

      Godsiff, Roger

      Clark, Dr Lynda (Edinburgh Pentlands)

      Goggins, Paul

      Green, Matlhew (Ludlow)

      Clark, Paul (Gillingham)

      Griffiths, Jane (Reading E)

      Clarke, Rt Hon Tom (Coatbridge)

      Griffiths, Nigel (Edinburgh S)

      Clarke, Tony (Northampton S)

      Griffiths, Win (Bridgend)

      Clelland, David

      Grogan, John

      Clwyd, Ann

      Hall, Mike (Weaver Vale)

      Coaker, Vernon

      Hamilton, David (Midlothian)

      633

      Hancock, Mike

      Marris, Rob

      Hanson, David

      Marsden, Gordon (Blackpool S)

      Harris, Dr Evan (Oxford W)

      Marsden, Paul (Shrewsbury)

      Harris, Tom (Glasgow Cathcart)

      Martlew, Eric

      Harvey, Nick

      Meacher, Rt Hon Michael

      Healey, John

      Milburn, Rt Hon Alan

      Heath, David

      Miller, Andrew

      Henderson, Ivan (Harwich)

      Mitchell, Austin (Gt Grimsby)

      Hendrick, Mark

      Moffatt, Laura

      Hepburn, Stephen

      Mole, Chris

      Heppell, John

      Moonie, Dr Lewis

      Hill, Keith

      Moore, Michael

      Hinchliffe, David

      Moran, Margaret

      Holmes, Paul

      Mountford, Kali

      Hood, Jimmy

      Mudie, George

      Hoon, Rt Hon Geoffrey

      Mullin, Chris

      Hopkins, Kelvin

      Munn, Ms Meg

      Howarth, Rt Hon Alan (Newport E)

      Murphy, Denis (Wansbeck)

      Howarth, George (Knowsley N)

      Murphy, Jim (Eastwood)

      Howells, Dr Kim

      Naysmith, Dr Doug

      Hughes, Beverley (Stretford)

      Oaten, Mark

      Humble, Mrs Joan

      O'Brien, Mike (N Warks)

      Hurst, Alan

      O'Neill, Martin

      Iddon, Dr Brian

      Organ, Diana

      Illsley, Eric

      Palmer, Dr Nick

      Irranca-Davies, Huw

      Pearson, Ian

      Jackson, Glenda (Hampstead)

      Perham, Linda

      Jamieson, David

      Picking, Anne

      Jenkins, Brian

      Pickthall, Colin

      Johnson, Alan (Hull W & Hessle)

      Pike, Peter

      Jones, Helen (Warrington N)

      Plaskitt, James

      Jones, Jon Owen (Cardiff C)

      Pollard, Kerry

      Jones, Kevan (N Durham)

      Pond, Chris

      Jones, Martyn (Clwyd S)

      Pope, Greg

      Jones, Nigel (Cheltenham)

      Pound, Stephen

      Joyce, Eric

      Prentice, Ms Bridget (Lewisham E)

      Kaufman, Rt Hon Gerald

      Price, Adam

      Keen, Alan (Feltham & Heston)

      Primarolo, Dawn

      Keen, Ann (Brentford & Isleworth)

      Pugh, Dr John

      Kelly, Ruth

      Purchase, Ken

      Kemp, Fraser

      Purnell, James

      Khabra, Piara S

      Quin, Rt Hon Joyce

      Kidney, David

      Quinn, Lawrie

      Kilfoyle, Peter

      Rammell, Bill

      King, Ms Oona (Bethnal Green)

      Rapson, Syd

      Kirkwood, Archy

      Reed, Andy (Loughborough)

      Knight, Jim (S Dorset)

      Reid, Alan (Argyll & Bute)

      Kumar, Dr Ashok

      Rendel, David

      Lamb, Norman

      Rooney, Terry

      Lammy, David

      Ross, Ernie

      Lawrence, Mrs Jackie

      Roy, Frank

      Laws, David

      Ruddock, Joan

      Lazarowicz, Mark

      Russell, Bob (Colchester)

      Levitt, Tom

      Ryan, Joan

      Linton, Martin

      Salmond, Alex

      Lloyd, Tony

      Sanders, Adrian

      Love, Andrew

      Sarwar, Mohammad

      Lucas, Ian

      Savidge, Malcolm

      Luke, Iain

      Sawford, Phil

      McCabe, Stephen

      Sedgemore, Brian

      McCafferty, Chris

      Sheridan, Jim

      McCartney, Rt Hon Ian

      Shipley, Ms Debra

      McDonagh, Siobhain

      Simon, Siôn

      McFall, John

      Simpson, Alan (Nottingham S)

      McGuire, Mrs Anne

      Singh, Marsha

      McIsaac, Shona

      Skinner, Dennis

      McKechin, Ann

      Smith, Rt Hon Andrew (Oxford E)

      McKenna, Rosemary

      Smith, Angela (Basildon)

      McNamara, Kevin

      Smith, Rt Hon Chris (Islington S)

      Mactaggart, Fiona

      Smith, Geraldine (Morecambe)

      McWalter, Tony

      Smith, Jacqui (Redditch)

      Mahmood, Khalid

      Smith, John (Glamorgan)

      Mahon, Mrs Alice

      Smith, Llew (Blaenau Gwent)

      Mallaber, Judy

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

      Mandelson, Rt Hon Peter

      Soley, Clive

      Mann, John

      Southworth, Helen

      634

      Starkey, Dr Phyllis

      Walley, Ms Joan

      Steinberg, Gerry

      Ward, Ms Claire

      Stevenson, George

      Wareing, Robert N

      Stewart, David (Inverness E)

      Watts, David

      Stinchcombe, Paul

      Webb, Steve

      Stoate, Dr Howard

      Weir, Michael

      Strang, Rt Hon Dr Gavin

      Whitehead, Dr Alan

      Stringer, Graham

      Williams, Rt Hon Alan (Swansea W)

      Stuart, Ms Gisela

      Taylor, Ms Dari (Stockton S)

      Williams, Hywel (Caernarfon)

      Taylor, Matthew (Truro)

      Wills, Michael

      Thomas, Gareth R (Harrow W)

      Winnick, David

      Timms, Stephen

      Winterton, Ms Rosie (Doncaster C)

      Tipping, Paddy

      Wishart, Pete

      Todd, Mark

      Woodward, Shaun

      Trickett, Jon

      Woolas, Phil

      Truswell, Paul

      Wray, James

      Turner, Dennis (Wolverh'ton SE)

      Wright, David (Telford)

      Turner, Dr Desmond (Kemptown)

      Wright, Tony (Cannock)

      Turner, Neil (Wigan)

      Younger-Ross, Richard

      Twigg, Derek (Halton)

      Tyler, Paul

      Tellers for the Ayes:

      Vaz, Keith

      Mr. Gerry Sutcliffe and

      Vis, Dr Rudi

      Mr. Nick Ainger.

      NOES

      Amess, David

      Hendry, Charles

      Arbuthnot, Rt Hon James

      Hoban, Mark

      Atkinson, Peter (Hexham)

      Horam, John

      Bacon, Richard

      Howard, Rt Hon Michael

      Barker, Gregory

      Howarth, Gerald (Aldershot)

      Baron, John

      Hunter, Andrew

      Bellingham, Henry

      Jack, Rt Hon Michael

      Bercow, John

      Jackson, Robert (Wantage)

      Beresford, Sir Paul

      Key, Robert

      Blunt, Crispin

      Kirkbride, Miss Julie

      Boswell, Tim

      Laing, Mrs Eleanor

      Bottomley, Peter (Worthing W)

      Lait, Mrs Jacqui

      Brady, Graham

      Lansley, Andrew

      Brazier, Julian

      Leigh, Edward

      Browning, Mrs Angela

      Lewis, Dr Julian (New Forest E)

      Burns, Simon

      Liddell-Grainger, Ian

      Burnside, David

      Lidington, David

      Cameron, David

      Loughton, Tim

      Chope, Christopher

      Luff, Peter

      Clifton-Brown, Geoffrey

      McIntosh, Miss Anne

      Collins, Tim

      MacKay, Rt Hon Andrew

      Conway, Derek

      Maclean, Rt Hon David

      Cormack, Sir Patrick

      McLoughlin, Patrick

      Cran, James

      Malins, Humfrey

      Curry, Rt Hon David

      Maples, John

      Davies, Quentin (Grantham)

      Mates, Michael

      Djanogly, Jonathan

      Maude, Rt Hon Francis

      Duncan, Peter (Galloway)

      Mawhinney, Rt Hon Sir Brian

      Fabricant, Michael

      May, Mrs Theresa

      Fallon, Michael

      Mercer, Patrick

      Field, Mark (Cities of London)

      Moss, Malcolm

      Flight, Howard

      Murrison, Dr Andrew

      Flook, Adrian

      Norman, Archie

      Forth, Rt Hon Eric

      O'Brien, Stephen (Eddisbury)

      Fox, Dr Liam

      Osborne, George (Tatton)

      Francois, Mark

      Page, Richard

      Garnier, Edward

      Paice, James

      Gibb, Nick

      Pickles, Eric

      Gillan, Mrs Cheryl

      Prisk, Mark

      Goodman, Paul

      Redwood, Rt Hon John

      Gray, James

      Robathan, Andrew

      Grayling, Chris

      Robertson, Hugh (Faversham)

      Green, Damian (Ashford)

      Robertson, Laurence (Tewk'b'ry)

      Greenway, John

      Roe, Mrs Marion

      Grieve, Dominic

      Ruffley, David

      Gummer, Rt Hon John

      Sayeed, Jonathan

      Hammond, Philip

      Selous, Andrew

      Hawkins, Nick

      Shephard, Rt Hon Mrs Gillian

      Hayes, John

      Simmonds, Mark

      Heathcoat-Amory, Rt Hon David

      Simpson, Keith (Mid-Norfolk)

      635

      Spelman, Mrs Caroline

      Waterson, Nigel

      Spicer, Sir Michael

      Watkinson, Angela

      Spring, Richard

      Whittingdale, John

      Stanley, Rt Hon Sir John

      Widdecombe, Rt Hon Miss Ann

      Steen, Anthony

      Wiggin, Bill

      Swire, Hugo

      Willetts, David

      Syms, Robert

      Wilshire, David

      Tapsell, Sir Peter

      Winterton, Mrs Ann (Congleton)

      Taylor, John (Solihull)

      Winterton, Nicholas (Macclesfield)

      Yeo, Tim

      Taylor, Sir Teddy

      Young, Rt Hon Sir George

      Turner, Andrew (Isle of Wight)

      Tyrie, Andrew

      Tellers for the Noes:

      Viggers, Peter

      Mr. Desmond Swayne and

      Walter, Robert

      Mr. John Randall

      Question accordingly agreed to.

    Clause 2

      SECONDARY CLASS 1 CONTRIBUTIONS
      Mr. Bercow: I beg to move amendment No. 6, in page 3, line 1, leave out from beginning to end of line 3 and insert—
      '(2) For the purposes of this Act the secondary percentage is

      (a) 12.8 per cent. the "full percentage", for all employers who do not provide health insurance;

      (b) 11.8 per cent., the "reduced percentage", for employers who do provide health insurance in respect of those employees for whom they provide health insurance.'.

      The Chairman of Ways and Means (Sir Alan Haselhurst): With this it will be convenient to discuss the following amendments: No. 7, in page 3, line 1, leave out from beginning to end of line 3 and insert—
      '(2) For the purposes of this Act the secondary percentage is

      (c) 12.8 per cent., the "full percentage", for all employers who are not themselves subject to Class 4 contributions, as set out in section 3 below;

      (d) 11.8 per cent., the "reduced percentage", for employers who are self employed, meet the conditions of subsection (3) below, and are, themselves subject to Class 4 contributions, as set out in section 3 below.

      (3) The reduced percentage is available to employers that have business turnover less than £1,000,000 per annum.
      (4) For the purposes of subsection (3) above, the business turnover of all persons in partnership with the employer is taken in aggregate. The reduced percentage is available only if the aggregate meets the conditions of subsection (3).'.
      No. 12, in page 3, line 1, leave out from beginning to end of line 3 and insert—
      '(2) For the purposes of this Act the secondary percentage is

      (a) 11.8 per cent., the "reduced percentage", on the costs of employment, on which Class 1 Secondary National Insurance Contributions are levied, of employees who meet the conditions set out in subsection (3) below;

      (b) 12.8 per cent., the "full percentage", on the employment costs of all other employees.

      (3) For the purposes of this Act, the reduced percentage is payable on the costs of employment of an employee, on whom Class 1 Secondary National Insurance Contributions are levied, where the employee is employed by a service company, which has turnover less than £1,000,000, of which the employee is also the main shareholder. For these purposes, main shareholder means that the employee owns more than 75 per cent. of the ordinary share capital of the service company that employs him.'.
      636
      No. 15, in page 3, line 1, at end insert—
      'except for employers contributions in the public sector which will remain at 11.8 per cent.'.
      No. 8, in page 3, line 12, leave out from beginning to end of line 14 and insert—
      '(2) For the purposes of this Act the secondary percentage is

      (a) 12.8 per cent. the "full percentage", for all employers who do not provide health insurance;

      (b) 11.8 per cent., the "reduced percentage", for employers who do provide health insurance in respect of those employees for whom they provide health insurance.'.

      No. 9, in page 3, line 12, leave out from beginning to end of line 14 and insert—
      '(2) For the purposes of this Act the secondary percentage is

      (c) 12.8 per cent., the "full percentage", for all employers who are not themselves subject to Class 4 contributions, as set out in section 3 below;

      (d) 11.8 per cent., the "reduced percentage", for employers who are self employed, meet the conditions of subsection (3) below, and are, themselves subject to Class 4 contributions, as set out in section 3 below.

      (3) The reduced percentage is available to employers that have business turnover less than £1,000,000 per annum.
      (4) For purpose of subsection (3) above, the business turnover of all persons in partnership with the employer is taken in aggregate. The reduced percentage is available only if the aggregate meets the conditions of subsection (3).'.
      No. 13, in page 3, line 12, leave out from beginning to end of line 14 and insert—
      '(2) For the purposes of this Act the secondary percentage is

      (a) 11.8 per cent., the "reduced percentage", on the costs of employment, on which Class 1 Secondary National Insurance Contributions are levied, of employees who meet the conditions set out in subsection (3) below;

      (b) 12.8 per cent., the "full percentage", on the employment costs of all other employees.

      (3) For the purposes of this Act, the reduced percentage is payable on the costs of employment of an employee, on whom Class 1 Secondary National Insurance Contributions are levied, where the employee is employed by a service company, which has turnover less than £1,000,000, of which the employee is also the main shareholder. For these purposes, main shareholder means that the employee owns more than 75 per cent. of the ordinary share capital of the service company that employs him.'.
      Mr. Bercow: We move speedily on to a group of amendments that may absorb our attention for a little longer than the previous group. The amendments embody several important issues on which I want to focus in some detail.
      John Mann: Excellent.
      Mr. Bercow: I am glad that the hon. Gentleman's enthusiasm for these debates is as boundless as mine.
      I want to consider together amendments Nos. 6 and 8. The Paymaster General will be aware that the Bill as drafted imposes an increase in national insurance contributions on employers that applies universally.
      The Government have advanced the rationale that the purpose of the measure is to provide the wherewithal to finance improvements in the national health service. The gravamen of our argument on the amendments is that many businesses already provide health insurance for their employees and that it is fair in those circumstances that

      637
      they should be relieved of the additional burden that I, in my understated way, described as "brazen, brutal and a triumph of hope over reality" a few moments ago.
      It appears that the Government have no intention of providing that relief, but it seems—at any rate to Conservative Members—that there is merit in doing so. I would, therefore, like to say something in relation to amendments Nos. 6 and 8 at the outset. They would enable employers who are providing health insurance packages for their employees to be relieved of the 1 per cent. increase in the national insurance contribution. For the avoidance of doubt, if the amendment were accepted—obviously, I am keenly hopeful that the Committee will be persuaded of the merits of the arguments and will vote accordingly—employers who already provide health insurance for their employees will continue to pay what is described in the amendments as "the 'reduced percentage'" in national insurance contribution of 11.8 per cent., whereas those who provide no health insurance—
      John Mann: Will the hon. Gentleman give way?
      Mr. Bercow: In a moment, if the hon. Gentleman will contain himself.
      Employers who provide no such insurance for their employees will be obliged to pay the increase and will therefore pay 12.8 per cent.
      I am eagerly enthusiastic to explain some of the background to, and arguments for, our proposition but I am afraid that I can resist the hon. Member for Bassetlaw (John Mann) no longer.
      John Mann: Before the hon. Gentleman elucidates further, I have a question on the clarification of definitions. When he talks about employers providing for their employees, does he mean individual employees or the company? In other words, where a company only provides such insurance to a percentage of the work force, how would that affect his proposal?
      Mr. Bercow: I think that the hon. Gentleman means "provides only" rather than "only provides", but we will not quibble unduly about the semantics as the purport of his remarks is reasonably clear. He raises a fair point and my answer, which I shall try to make clear for the benefit of the Committee, is that someone would be eligible as an employer for payment of the reduced percentage as opposed to the increased percentage if, and only if, he or she as an employer were providing health insurance for a substantial majority—probably the majority, if not all—of his or her employees.
      John Mann rose—
      Mr. Bercow: The hon. Gentleman is a hard taskmaster and not easily pleased. I should have thought that my answer was so abundantly clear that only an extraordinarily clever person could fail to see the point, but I give way.
      John Mann: I merely seek slightly more clarification: definition of the word "substantial". The amendment is an attempt to frame legislation, so it is important for the hon. Gentleman to assist our deliberations by giving us a
      638
      definition of "substantial". Will he be precise about the basis on which an employer would pay the lower rates under his proposal?
      Mr. Bercow: The hon. Gentleman is a new Member but he is astute and well informed so I think that he will be aware that when one tables amendments one discusses them with the Clerks, who provide guidance on such matters. The drafting requirements of the Bill, as we have been informed, are such as not to enable us to go into the full details that we would want in due course to pursue. If the hon. Gentleman is putting it to me that, to guarantee efficacy and avoid abuse, we would need some precise definition in practice and some scheme that might require the approval of the Secretary of State, he has a fair point.
      There was a very poorly drafted amendment in the last group, on which it would be cruel to focus for too long, but in respect of which the hon. Member for Oxford, West and Abingdon (Dr. Harris) and his sidekick, the hon. Member for Truro and St. Austell (Matthew Taylor), observed in cavalier fashion that the fact that they had not provided for its application to Northern Ireland was a piddling point that it was pedantic of me to insist on raising. In this case, I think that the hon. Member for Bassetlaw will accept—
      John Mann rose—
      Mr. Bercow: The hon. Gentleman might get a third go in due course but he must exercise what patience he can muster. The fact that I have not gone as anorakishly into the detail as his natural earnestness and curiosity demand does not of itself invalidate the purpose of the amendment.
      6.15 pm
      The hon. Gentleman would, I fear, like to take us away from the thrust of the argument, which is this: some employers are helping their employees by providing health insurance packages; under the Government's Bill, those employers—despite their forward-looking and employee-friendly policies—will be obliged to pay the tax hike in respect of care for which they are already privately making provision for most of, or even all, their employees. We are suggesting—
      Mr. Hendrick: Will the hon. Gentleman give way?
      Mr. Bercow: I am always happy to give way, but the hon. Gentleman must be patient. He is doing considerable damage to the leather of his Bench by the frequency of his springing up and down from it—not something that I have ever done, as he will readily testify.
      My right hon. and hon. Friends and I think that it is unfair that employers should be obliged to pay twice. We can dilate on that matter. Indeed, I have a suspicion that, subject to your patience and restriction Sir Alan, we might be in for something of a dilation on the subject in the period ahead. However, I do not want in any way—
      Mr. Hendrick: Will the hon. Gentleman give way?
      Mr. Bercow: In a moment. I promise the hon. Gentleman that I shall give way to him. I am always intoxicated by his interventions—there is no reason why tonight should be different.

      639
      We must not leave the central argument. Is it fair that employers pay twice, or is it unfair? If hon. Members believe that it is fair that employers should have to pay twice, they will support the party of iniquity and vote with the Government. If they believe that it is unfair—if they have a social conscience and favour a progressive approach—they will support the Conservatives. That is the thrust of the choice that lies before us.
      John Mann rose—
      Mr. Hendrick rose—
      Mr. Bercow: I shall in due course give way again to the hon. Member for Bassetlaw if he is patient, but meanwhile I must give way to the hon. Member for Preston (Mr. Hendrick).
      Mr. Hendrick: I thank the hon. Gentleman for giving way and I hope that I can intoxicate him to a level at which he feels satisfied.
      Given his concern for responsible employers who want to provide private health packages for their employees and his concern that some employers might, as a result of this debate and the subsequent vote, end up having to pay twice, is he in favour of making all employers provide private packages so that no individual in any company in the land is without private health insurance, thereby removing the need for the extra 1 per cent. that the Government are adding?
      Mr. Bercow: No. I applaud the hon. Gentleman's ingenuity. I do not want to get too personal, because I like him very much and enjoy jousting with him, but it is unfair—purely, of course, in the context of the amendments on which we are narrowly focusing—that his efforts have not been rewarded so far. I shall have a private chat with him, but in view of how hard he is trying he is suffering cruel and inhumane treatment by having to sit on the Back Benches and not on the Treasury Bench.
      The hon. Gentleman is ingenious, but the answer is no, we are not advancing the proposition that all employers should have to provide health insurance. We are not arguing for the privatisation of the system. On previous occasions, he has discussed with us precisely what our health proposals will be. It is to his credit that he tries to establish the answer through both the back door and the front door, through punching above our heads and punching below our feet. He goes hither and thither, this way and that but as yet he has been disappointed, because we are not prepared to provide him with the answer that he would find convenient for his purposes.
      However, so that we can be clear and so that it will not be necessary for the hon. Member for Bassetlaw to intervene in a similar way—although he may use different devices in due course—I make the argument explicitly. We are looking at our health care policy. We are doing so with an open mind, in contrast to the closed minds of Labour Members.
      The Government's position is clear—it is not in any sense stealthy—and it is honest. Their position is to say that they have learned nothing over the past five years from the countries of continental Europe which translate
      640
      care more effectively from a word to a deed than they do, and they do not think that they have anything to learn from them in the next five years either.
      Mr. Tom Harris: Will the hon. Gentleman give way?
      Mr. Bercow: The hon. Gentleman does not enjoy the truth being blurted out, but I am afraid that he will have to suffer the results, at least for a short time.
      The position of Conservative Members is that we can learn a lot from other countries, whose records on cancer care, cardiac surgery, choice among GPs, guaranteed treatment after 28 days, and no national waiting lists, as in Germany, show that they do things better than we do. We want to look open-mindedly and in detail at those countries. We will consider all the different systems, establish what is best practice, discover what is in patients' interests and, as I have said before, make a judgment.
      I do not suppose that the hon. Member for Preston heard me at lunchtime yesterday—it would probably have spoiled his digestion if he had. I do not blame him, hut I made the point yesterday—I have to repeat it now—that the Conservatives will consider what needs to be done in the health service, what reforms are required for the purpose, how much those reforms will cost and in what way they should be financed. When we have gone through that considered and logical process of study, we will produce a conclusion. It will be a detailed, credible, costed and attractive alternative to this Government's persistent and disappointing failures in health policy. In due course, that policy will be unveiled by my hon. Friend the Member for Woodspring (Dr. Fox), the shadow Secretary of State for Health, and I hope that the hon. Member for Glasgow, Cathcart (Mr. Harris) will not be disappointed with the results.
      John Mann rose—
      Mr. Bercow: The hon. Gentleman has had several goes. He favours equity of treatment, so he will expect me to give way first to the hon. Member for Glasgow, Cathcart.
      Mr. Tom Harris: The hon. Gentleman claims that the Government have not learned from the experience of others. May I suggest that they have learned a great deal from the experience of 18 years of Conservative Government, and so have the electorate? That is why a huge investment in the NHS has been planned, in complete contrast to what the Conservative Government did in those 18 years.
      Mr. Bercow: That is a disappointing intervention. I have listened many times during the past 12 months since the hon. Gentleman was elected, and I have been impressed by what I have heard. He is capable of so much better than what he has just delivered, so I am sorry that he delivered it. I say that in relation to the arguments that we shall enunciate for assistance for employers who provide health care insurance for their staff, and I do so conscious of some of the facts in Scotland.
      I should have thought that the hon. Gentleman, of all people, would be well informed about the position in Scotland. If he is as well informed as I thought that he

      641
      was and as I know that he should be, he will be aware of the extraordinary combination of facts on health care provision in Scotland. On the one hand, since his party took office in 1997, there has been a 28 per cent. real-terms increase in expenditure on health but on the other, concurrent with that increase in expenditure, there has been an average increase of 25 per cent. in the waiting time for treatment.
      That emphasises the patently true fact that, in health care, it is not simply a matter of increasing spending. Sadly, the hon. Member for Rhondda (Mr. Bryant) is not in his place today, as he had some difficulty grasping that point when I explained it to him. Manifestly, if expenditure is increased without an accompanying reform, we will not achieve the improvement in performance that we all want. We know in relation to many aspects of health delivery in Scotland that there is more money, but there is not a better performance.
      I have already been in danger of straying from the narrow course of the amendment, which I want to commend to the Committee. That is ultimately my responsibility, but because of my natural generosity of spirit, I wanted to give way to Labour Members to allow them to release their frustrations.
      The Chairman: Order. The hon. Gentleman will realise that the more he dilates, the more he attracts interventions. If he were to return more to the detail of the amendment, the Committee would benefit.
      Mr. Bercow: You are always fair, Sir Alan. You are right to castigate me in your gentlemanly fashion, and I shall do exactly as you say. I am very grateful to you for providing me with the protection of the Chair from the needless dilations suggested by right hon. and hon. Members.
      Dr. Evan Harris: Will the hon. Gentleman give way?
      Mr. Bercow: I shall give way once more, on the explicit understanding that the hon. Gentleman intends to focus his remarks very specifically on the purport and contents of the amendment.
      Dr. Harris: The amendment deserves careful scrutiny because it raises important issues. If the increase in national insurance contributions is used to pay for improvements in the health service or extra resources not only for elective surgery, but for primary and emergency care, and given that most people with private health insurance use their insurance to pay for elective surgical care and a few other things, but generally not for primary or emergency care, is it reasonable to say that they are paying twice for emergency and primary care when, in fact, most of them use the NHS for those services? Should not the hon. Gentleman be talking about—not that I support this—a third relief, not a full relief in this measure?
      Mr. Bercow: The answer is no. [Interruption.] A couple of my hon. Friends generously observe from sedentary positions that the hon. Gentleman alludes to the third way. I am not sure whether it is the third way, the second way, the first way or the fourth way, but it is a characteristically confusing and muddle-headed Liberal Democrat way, which I do not intend to follow. I want
      642
      specifically to deal with the unfairness—possibly even the incongruity—of employers financing packages that their employees will use while being obliged to pay in full the increase that the Government are demanding to provide for the NHS.
      If the hon. Gentleman disagrees with me, he will no doubt have the opportunity to catch your eye, Sir Alan. However, I have a little sheaf of material on such matters through which I should like briefly to canter before proceeding to other amendments. The Committee will be relieved if I resist the temptation to refer to any hon. Member's intervention before those arguments have been reasonably aired.
      We are talking about employers providing private medical insurance. It is important to place this debate in the context of subscriber numbers. The Committee will be very familiar—if it is not, it should be—with "Laing's Healthcare Market Review 2001–2002". [Interruption.] As the hon. Member for Ealing, North (Mr. Pound) rightly observes, I am sure that his constituents speak of little else. He will probably be very familiar with paragraph 3.2 on the demand for private medical insurance and, indeed, some of the subsidiary paragraphs. [Interruption.] The hon. Gentleman says that it is the best paragraph. I am not sure about that; it is a copious document that contains many good nuggets, and I would not want to discriminate between them, except inasmuch as time requires me to focus on only a part of the report.
      Paragraph 3.2 states:
      "Demand for PMI, in terms of subscriber numbers, picked up in 2000 with the highest annual growth rate since 1990."
      The significance of that is that, between 1991 and 1999, the growth trend in demand was fairly flat. Subscribers rose by 3.6 per cent. in 2000, following a fall of just under 1 per cent. in 1999. The important point is that the private health insurance market has struggled in relative terms—to some degree, it has struggled absolutely—in relation to individual subscribers.
      We have witnessed strong growth in corporate business since 1997. That is relevant in the context of arguing for a modicum of tax relief in the corporate sector. There has been a substantial increase in the quantity of private medical insurance provided by the corporate sector. For example, since 1990—this has happened over a substantial period—the number of company-paid subscribers has grown by an estimated 23 per cent. A number of factors are commonly cited to explain that trend: the underlying strength of corporate economic performance; high employment and low unemployment; and strategic price discounting.
      Mr. Stephen Pound: And the Labour Government.
      Mr. Bercow: No, I want to focus in particular on the factor of strategic price discounting, which is important and of which the hon. Gentleman will have a full and impressive grasp. The other factors include the increased concentration of marketing and, indeed, changing employers' attitudes to private medical insurance. We are talking about the use of strategic price discounting—in which I am encouraged to hear that the hon. Gentleman

      643
      has a substantial interest—in the context of an increasingly competitive marketplace. That is what we now see. The review observes:
      "Attitudes to PMI from employers may also be slowly changing as more employers are valuing employment benefits in general"—
      of which I know that the hon. Gentleman will approve—
      "and are recognising the potential risks of losing employees for long absences through accident or sickness."
      6.30 pm
      Mr. Francois: My hon. Friend makes the point that growth in private medical insurance has often been because of group schemes, which he is talking about in the context of employers who have participated in such schemes for their employees. It is also interesting that several trade unions, including those that oppose bringing further private capital into the health service, have private medical schemes of which they encourage their members to take advantage. Is that not a curious dilemma from the point of view of some Labour Members?
      Mr. Bercow: As so often over the years, my hon. Friend anticipates me. We have known each other as long as I have known the hon. Member for Bassetlaw. I shall not bore the House excessively on this matter, Sir Alan, as you would not allow me to do so, but I have jousted with the hon. Member for Bassetlaw since we joined Lambeth council together in 1986. It is fair to observe, however, in the context of the important point made by my hon. Friend, that he and I have also been jousting against each other—although we now do so together—since 1986, when we competed for the chairmanship of the Federation of Conservative Students. He was always more quick-witted than me at the time, and he clearly remains so now.
      My hon. Friend alludes to an important point about the use of private health care by trade unions on behalf of their members and employees. I was tempted to focus for a little longer on "Laing's Healthcare Market Review 2001–2002", but the central point will be clear to the House: a substantial number of companies provide private medical insurance for their employees, and there is merit in the argument that, if they are doing that, they should not also be burdened with the tax hike that the Government wish to foist on them. My hon. Friend gently prods me to remember the importance and perhaps even the curious tension and inconsistency on the part of trade unions in relation to this matter. He has effectively fed me a bone, and he would be disappointed if I did not choose to chew on it. We know that trade unionists who are publicly critical of private health care have benefited from health care themselves or led unions that offer forms of private health care insurance. That is the point that he keenly picked up. In the context of the advocacy of relief for employers spending money on these matters, it is notable.
      The Conservative party agrees with the Government that more money needs to be spent on health, but we disagree with their view that the NHS is the only
      644
      mechanism by which to deliver that health care. That is why we have looked around Europe at alternative social insurance schemes.
      John Mann rose—
      Mr. Bercow: I shall not give way to the hon. Gentleman just yet, Sir Alan, as I have had an instalment from him. It was stimulating, and I should like to store him up. It would be unfair to squander him at this relatively early stage, so if he can be patient I shall return to him in due course.
      We have looked around Europe at alternative social insurance schemes and the work of a range of for-profit, not-for-profit and voluntary health care providers. In that context, it is interesting to focus, as I shall in a moment, on the attitude of trade unions to this important subject.
      Mr. Weir: I was under the impression that most of these schemes also had an employee contribution. Nothing in the amendments affects employees who contribute to these schemes; only employers' contributions are involved. Is that deliberate or an oversight? Can the hon. Gentleman explain why he has gone down this route?
      Mr. Bercow: The hon. Gentleman makes an interesting point. As he will be aware, the bulk of the cost of the schemes in question is borne by the employer providing those schemes for the employee. The relief was therefore intended to be targeted on the employer providing the scheme and footing the bulk of the bill. If the hon. Gentleman is asking whether it is a fair point and factually correct that the employee bears some costs as well, the answer is yes. Our amendments, however, are focused on assistance in terms of national insurance contribution relief on the employer.
      The Chairman: Order. So is the clause.
      Mr. Bercow: So is the clause, as you rightly observe, Sir Alan. I must therefore not digress, despite the temptations of the hon. Gentleman, who I know will have read the clause in detail. He is probably able to recite it word for word, unscripted, for the benefit of the House.
      It is important to be specific, and I am keen to be so, if only hon. Members will allow me that opportunity, Sir Alan. Unison, for example, promotes its own health care scheme entitled Medicash. That does not win any prizes for originality but it does help members buy treatment outside the national health service. Specifically—this is interesting from the apotheosis of egalitarianism as represented by Unison—the Medicash scheme offers no fewer than three levels of cover: bronze, silver and gold. Members are offered a broad range of services and everything apart from overnight stays in hospitals can be bought from the private sector. Unison claims that Medicash—it is important to represent it fairly—
      The Chairman: Order. I am not at all clear that it is important that we should discuss in detail trade union arrangements. That seems to be outwith the scope of the amendment that the hon. Gentleman seeks to explain to the House.
      Mr. Bercow: I am always grateful to be guided by you, Sir Alan. If I am not entitled to develop the argument in

      645
      detail in relation to the arrangements of particular unions, I shall refrain from doing so. I was enjoying developing the point, but I shall desist.
      Mr. Kevan Jones: Will the hon. Gentleman give way?
      Mr. Bercow: Not for the moment. Suffice it to say that if a union is providing such a valuable benefit for employees, notwithstanding what it might say in excoriation of private health insurance and denunciations of those who support it, it seems fair that that union should be aware that it would benefit from the relief that the Conservative amendments would provide. I can summarise the point neatly, I hope, by saying that supporters in practice—whether or not in principle—in the trade union movement, as employers, of the provision of private health insurance, as represented by Unison and others, can rest assured that the Conservative Opposition see the merit of what they are doing for their employees. We would want, courtesy of these amendments, to provide relief from the damage and pain that the Labour Government's policy would inflict on them.
      John Mann rose—
      Mr. Kevan Jones rose—
      Mr. Bercow: The hon. Member for Bassetlaw has been very greedy, and I can indulge his greedy instincts not a moment longer. I shall give way, however, to the hon. Member for North Durham (Mr. Jones).
      Mr. Kevan Jones: I am grateful to the hon. Gentleman for giving way. I shall contact the general secretary of Unison about the hon. Gentleman's advocacy of that great union. Do not the schemes of Unison and many other trade unions cover dental care and other aspects of health care that are not necessarily covered by the NHS? As for what Unison and other trade unions such as mine—the GMB—advocate, the difference is that they do not favour a system whereby those in work pay through a national insurance contribution but if they fall out of work, they fall out of the system. They support a system in which delivery of health care is free at the point of need. Is the Conservative party now saying that it is against health care that is free at the point of need?
      The Chairman: Order. I listened to the hon. Member for North Durham (Mr. Jones), but I feared that he would tempt the hon. Member for Buckingham (Mr. Bercow) away from the straight and narrow. He did so, and I hope that the temptation will be resisted.
      Mr. Bercow: I am obliged to you, Sir Alan. As you know, there is no more partisan enthusiast for straightness and narrowness than I, especially when the gentle tickle of the rod of the Chair is felt on my back. I am very grateful to you, Sir Alan, and I will not misbehave a moment longer, despite the cheeky temptations of the hon. Member for North Durham.
      I will now move at a modest pace to amendments Nos. 7 and 9, and I know that you, Sir Alan, will be excited, not to say delighted, at the prospect. Intellectually, these amendments can be grouped together.
      646
      The arguments for amendments Nos. 6 and 8 are clear. The attempt has been made, with a good deal of wriggling and scraping of the bottom of barrels, to defend the unions, but we see the merits of the arguments in favour of those amendments even if Labour Members do not.
      I wish to turn the Committee's attention to the Conservative party's desire—it is certainly not the desire of the Liberal Democrats—to support the self-employed. Amendments Nos. 7 and 9 are designed to do that by relieving the self-employed of the burden of the Bill's provisions that will increase costs. Specifically, we propose in amendment No. 7—amendment No. 9 is similar—that employers, when facing the secondary percentage, should pay the full percentage if they are not themselves subject to class 4 contributions. We specify that the 11.8 per cent.—the reduced percentage for employers who are self-employed—should be provided, and the proposed subsections (3) and (4) in amendment No. 7 make it clear that the reduced percentage that we are proposing would be available to employers who have a business turnover of less than £1 million per annum.
      Labour and Conservative Members will realise that the proposal would cover a great many businesses with relatively modest turnover which will be hit if the Government get their way but to whose rescue the Conservative party is trying to come. The amendment would be of particular benefit to a number of unincorporated businesses, because it would offer the reduced rate of employers' national insurance contributions to employers who are themselves self-employed and hence subject to an increase in their class 4 NICs as well as in their employers' NICs. Subsections (3) and (4) in the amendment would target the relief at small, unincorporated businesses as an incentive to their continuing to employ people.
      The case for our proposals is powerful and we have received considerable support from outside organisations that are shocked and infuriated by the provisions in the Bill and by much of the content of the Chancellor's Budget. When a small, unincorporated business has employees, the self-employed business person will be hit twice. It is interesting for my hon. Friends to note that, as I make the point that that self-employed business person will be hit twice, the new Chief Secretary to the Treasury—whom I warmly complimented on his justified and long overdue promotion—has slunk out of the Chamber. Well might he slink, because he is an extremely talented defender of his case—and no more obviously so than when the case that he has to defend is an extremely poor one. The track record speaks for itself, and I am not surprised that he has preferred other attractions to attending a debate that describes the damaging policies that it will now be his doubtful privilege to defend.
      We are talking about self-employed business people hit twice by the NIC increases proposed by the Chancellor—first, on the costs of employing staff and, secondly, on their own income. As is perfectly proper in parliamentary debates, Labour Members very often cite cases from their constituencies to support their arguments. For example, the hon. Member for Bassetlaw—I must be careful not to provoke him unduly for fear of the consequences in terms of further dilations from him—will refer to people in his constituency who think that everything is absolutely magnificent. That will leave the rest of us to wonder what is in the water in Bassetlaw.

      647
      6.45 pm
      I think that it is right to deal with practicalities and to consider the specifics and details. An unincorporated business person who employs two staff each with an annual salary of £15,000 and whose own income after expenses is £17,500 will be personally £262 a year worse off because of the changes to national insurance contributions and other tax imposts contained separately in the Budget measures.
      John Mann: Will the hon. Gentleman give way?
      Mr. Bercow: The hon. Gentleman must restrain himself, then I will give way.
      I compare the figures that I have just cited with those for an employee who earns £17,500 a year and who will be £158 a year worse off, or a self-employed person with no employees and an income of £17,500 who will be £100 worse off in 2002–04. I am itching to return to the thrust of my argument, but the House wants to hear the hon. Member for Bassetlaw.
      John Mann: I refer to the figures in the hon. Gentleman's first example, and ask him what the costs would be should that employer choose to go forward with private health insurance. Should the hon. Gentleman not have those figures to hand? Would it not be right to suggest that, according to BUPA's statistics, the minimum cost would be about £800 a year? That would be four times more than the employer will pay in national insurance contributions.
      Mr. Bercow: If I can put it in the vernacular, I fear that the hon. Gentleman is spouting off the top of his head, with modest regard, if any, for the accuracy of what he described.
      John Mann rose—
      Mr. Bercow: No, I will not give way, and I make that clear beyond doubt. I always enjoying the inquisition of the hon. Gentleman, but focusing on the specific costs of a scheme that has not yet been introduced and for which approval from the Secretary of State has not yet been sought let alone provided is a trifle illusory on the hon. Gentleman's part. Depending on one's preference, the extremely detailed interest that he takes in the subject is either a tribute to his parliamentarianism or a commentary on what a sad anorak he is. I do not know the answer to that, but the Committee will form its view on the dilemma that I have just unveiled.
      John Mann rose—
      Mr. Bercow: I admire the hon. Gentleman's diligence and I am impressed by the exercise that he is giving to his knee muscles, but I wish to make progress. There are other amendments to consider and other right hon. and hon. Members might wish to speak if any time is left. Massively though I enjoy my periodic skirmishes with the hon. Member for Bassetlaw, we should not be so self-indulgent as to imagine that the House of Commons consists of the hon. Members for Bassetlaw and for Buckingham alone. The hon. Gentleman must not forget constituencies beginning with the letter A—or indeed those beginning with the letters C to Z.
      648
      The Government's proposal is clearly a tax on jobs and an attack on the most vulnerable members of the business community. My hon. Friends and I have focused much in recent times on our championship of the vulnerable. The crusading theme of the leadership of the Conservative party by my right hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) is the absolute determination that a one nation Tory party should identify with, and champion the cause of, the vulnerable, the oppressed, the downtrodden and those who have been consistently let down and betrayed by the Government—who have been treated with indifference, disdain and contempt by a Government who fondly imagine that everyone in business and employing others is somehow wealthy and undeserving of the concern of a modern Government.
      Our position is this. We are arguing for the relief for unincorporated businesses proposed in amendments Nos. 7 and 9 because 3 million self-employed business people have average incomes that are significantly lower than the average salaries of employees, yet the Bill effectively forces them to pay the NICs increase twice. We are trying to offer some relief and succour to the self-employed by exempting small unincorporated businesses—defined in the amendments as those with a business turnover of less than £1 million—from the increase in employers' NICs. That would help the self-employed—market traders, household decorators, builders, retailers and a plethora of others—to employ more staff, to keep the staff that they have, and to stay afloat despite the competitive pressures and Government imposts that rain down upon them. My hon. Friends and I are concerned about those people because we know what tough times they face and how difficult the climate is.
      I remind Labour Members that our arguments enjoy the support of an organisation that toils effectively and creditably on behalf of the self-employed—the Federation of Small Businesses—and refer them to the comments of John Walker, its policy chairman, about the increased national insurance contributions that are expected from the self-employed.
      Mr. Pound: The policy chairman?
      Mr. Bercow: Yes, the hon. Gentleman will find that that is accurate. I know that—I would have a problem with my short-term memory if I did not—because I met the good Mr. Walker this morning. He explained to me, eloquently and in detail, the damaging effects of the Government's policy and the helpfulness of the amendments in offering relief to benighted businesses the length and breadth of the land.
      Mr. Walker said:
      "It is a tragedy that the Chancellor has decided that the self employed will also pay higher National Insurance Contributions. The average income from self employment is just £13,890 compared to an average income from employment of £21,842 per annum. This undermines any attempts the Chancellor has made to help the low paid."
      If Labour Members do not see that as a faithful reflection of the legitimate worry of a representative of business who is concerned not with politics, but with the impact of policy on businesses and their staff, I do not know what

      649
      will cause to be opened minds that are closed. I hope that the hon. Member for Preston is about to show me that his mind has opened.
      Mr. Hendrick: It is kind of the hon. Gentleman to give way to me again. Does he agree that the figure of around £13,000 that he quoted is most likely to be the amount that many self-employed people are advised to pay themselves by accountants who look after their best interests, especially as regards income tax?
      Mr. Bercow: That is an interesting intervention, and I am sure that the hon. Gentleman will want to develop the point further. It is probably relevant, but it does not have a great impact on the thrust of the amendments.
      This morning, I visited a business that would benefit from the amendments—the appropriately named Buckingham Coffee Lounge. It is appropriately named not only because it is near to Buckingham gate—it is situated at 19–21 Palace street, SW1, a short canter from the Palace of Westminster—but because I visited it as the interested Member of Parliament for Buckingham as well as in my capacity as a Treasury spokesman. I met Mr. Jose Pose-Silva, who is a member of the Federation of Small Businesses. He explained that the impact of the Government's NIC increase on an unincorporated business such as his will be to raise costs by about £500 a year. He faces paying £500 a year extra unless the Government are prepared to provide some relief. That is a regrettable state of affairs, and I should like it to be changed.
      Mr. Mark Field: My hon. Friend may be feeling some trepidation about having visited a business in my constituency without my consent. I hope that he took advantage of all that the Buckingham Coffee Lounge could give him not only in economic matters but in relation to its no doubt excellent products.
      Is not the real concern that the measure will force many businesses that are happy to remain small and flexible as unincorporated businesses to incorporate in order to avoid such punitive taxes? Does not that go against the alleged highbrow pro-enterprise instincts of the Government? Under the current arrangements, companies can choose to avoid national insurance contributions by paying in the form of dividends instead of salaries. This is an absurd measure that will bring in no additional revenue to the Treasury.
      Mr. Bercow: I am obliged to my hon. Friend for providing that welcome and timely in-flight refuelling. I hope that he accepts my personal apology for having failed to inform him of my intended visit in advance, in accordance with parliamentary convention. I am grovelling to him, and I hope that he will excuse me.
      As always, my hon. Friend makes a compelling point. The Buckingham Coffee Lounge is a small unincorporated business that is struggling to make its way, providing a decent service and trying to prosper. As such, it should be helped, not hindered, by Government. The best way to do so is to provide it with better tax treatment than it presently enjoys. Labour Members should go to the Buckingham Coffee Lounge. It provides an excellent service, and the gentleman who runs it would benefit from
      650
      our policies and suffer from theirs. If they do not want to support policies that would help it, they should at least have the decency to patronise it.
      Amendments Nos. 12 and 13 are designed to help personal service companies. Hon. Members will be familiar with the lengthy and detailed debates about IR35 that we enjoyed—if enjoyed be the word—during the previous Parliament.
      Mr. Pound: Oh God!
      Mr. Bercow: I am disappointed that the hon. Gentleman's reaction to my reference to IR35 is to say, in an extremely distasteful and impolite fashion, "Oh God!" because these matters are of the gravest concern to many thousands of small independent contractors who have been hammered by this Administration. There may not be many such businesses in the hon. Gentleman's constituency, but if that is his attitude to them, I can only say that I have a more accommodating and respectful attitude to the businesses of Buckingham than he has to those of Ealing, North.
      Mr. Pound: I was not speaking from any blasphemous origins, but merely out of deep regret and sadness. I was calling on the deity to intervene and redirect the hon. and bumptious Member for Buckingham (Mr. Bercow) back to the subject under discussion because his tour d'horizon of every health care provider in Europe and every coffee house in Westminster is exhausting the legendary patience of hon. Members.
      7 pm
      Mr. Bercow: The hon. Gentleman must speak for himself. I happen to think that the impact of increased national insurance contributions is important and will be damaging. I am concerned that people who provide health care packages for their employees, people whose businesses are unincorporated and, indeed, people who are involved in personal service companies should be offered a ray of light at the end of the tunnel. The fact that the hon. Gentleman is prepared to compound and exacerbate the depredations that they have suffered from five years of a Labour Government, with further imposts contained in the Bill, does not surprise or impress me. Like my hon. Friends, I want to ease the plight of vulnerable businesses that create the wealth that the hon. Gentleman and his colleagues have an insatiable and legendary appetite to spend. I want those companies to have some hope.
      We are not proposing to remove IR35. That would not be within the scope of the Bill and would not be permitted. The Professional Contractors Group is principally and legitimately concerned with that agenda. However, we are proposing to provide relief on the increase in national insurance contributions to benefit personal service companies. That is sensible. The amendments would exempt individuals who are involved in personal service companies from the increase in employers' NICs. They would still pay increased NICs as employees, but would not be penalised twice. That is fair, decent, right, proper and, if we persuade Labour Members to support us in the Lobby, will be effective.
      Let us be clear about what will happen to personal service companies if they are not given the relief that we advocate: they will face big increases in costs. The cost

      651
      of the Budget changes to a personal service company with an annual income of £100,000 will be £1,865. That is a big deal. It is an important subject and should not exhaust the self-proclaimed legendary patience of the hon. Member for Ealing, North (Mr. Pound) or any other hon. Member. That is what we are here to debate. I look forward to hearing his well-informed, erudite and scintillating contribution.
      Our amendments are good. We intend to press them to a vote. We look forward to hearing whether anyone from another political party supports them. I commend them to the Committee.
      John Mann: Having failed to intervene as many times as I wanted, I have several points to make. The blusterer from Buckingham masked the vagueness of his proposal while he meandered through alternative models of health care provision in Europe. We all know, however, that Germany takes a slightly higher percentage of gross domestic product in taxation than we do, and that in France it is 8 per cent. higher. The low taxation regime in this country and the reduction in the take from taxation contrasts with those western European models and, indeed, with the model when the Conservative party was in power from 1979 to 1997, when the percentage take increased by one third.
      The hon. Member for Buckingham (Mr. Bercow) described me as an anorak—and it strikes me that anorak manufacturing might be a good small business for him to go into. While he was a special adviser—which I am sure has a lot to do with small business—some of us were taking risks in the business community, so we can speak with a modicum of knowledge. Ironically, and unfortunately for the hon. Gentleman, the first example that he gave—a three-person company—was precisely the type of company with which I was involved. Mine had similar salary levels and was set up in a similar way.
      Had the hon. Gentleman bothered to listen to previous contributions or to read Hansard assiduously, he would know that the BUPA example that I used relates to a quote for the minimum cost that that organisation gave me three or four weeks ago. On average, private health insurance would impose on business a burden five times greater than the increase imposed by the change in national insurance contributions. The argument that the increase in national insurance contributions is a burden on business whereas private health care insurance would not be, is a fallacy that needs exposing. That is the American model rather than the continental model.
      The hon. Gentleman used the words "pay twice". I was unable to intervene to demonstrate conclusively that the proposal is so vague that it is a case not of paying twice, but of paying somewhere between one and two times. I may be a new and inexperienced Member, but I know that the amendments that he has tabled to this important Bill are vague. They give no idea of what the payment will be, and we cannot judge what their impact on employers would be.
      The hon. Gentleman compared his proposal with Liberal Democrat policies, but that raises the question: who are the official Opposition, with the Short money to do the necessary research? His flabby explanations show the paucity of his argument—and the vagueness goes even further.
      652
      When he was talking about the definition of health insurance the hon. Gentleman referred to trade unions, but he failed to explain that with most trade union health assurance policies the member pays a small amount to receive income when he is incapacitated, and in particular, when he is in hospital. Trade union policies are not about paying for private health care, but about getting payments into people's pockets when their wages are not being paid in full, or at all, by the employer.
      Mr. Tom Harris: Does my hon. Friend agree that the hon. Member for Buckingham (Mr. Bercow) failed to mention that, in contrast to the spirit expressed in his amendments, even trade unions that offer private insurance do not come cap in hand to the Government for tax relief?
      John Mann: Indeed, I accept that point. However, the key issue is that the health assurance whereby individuals pay a premium to get income into their pockets when they are ill has nothing to do with private health insurance. The flabbiness of the definition—by the hon. Gentleman's own admission, it incorporates all the trade union schemes—leads to this question: what is the minimum level of private health insurance that would qualify?
      As we all know, there is a wide range of types of health insurance. There are some whereby health care is paid for, with various exceptions. I was reading about an example of insurance under which one third of the cost is paid, and this morning I challenged a GP in my constituency who had a leaflet about that sort of insurance in his surgery. Not all the cost is paid, and the insurance is a halfway house—or we might call it a "third way" house. It, too, would qualify. Even worse, there are policies such as the trade union assurance schemes, under which nothing is paid. The service is provided by the national health service, but the tiny amount that somebody could have in their pocket when they were incapacitated in hospital would also qualify. It seems to me that there is a potential for scam in the system.
      How do we define the percentage of employers who are involved? While the hon. Gentleman was a special adviser, I found in my dealings with employers, and in industrial relations, that the vast majority of schemes were for a section of the work force, not for everyone. Indeed, it was very rare for all the work force to be covered, although the senior management were usually covered. Sometimes, as quickly happened after privatisation of the utilities, the senior management and some of the middle management were given private health insurance as a so-called perk. The question of what qualifies cannot, therefore, be dismissed by saying, "This is like the Liberal Democrats ignoring Northern Ireland, and we can get away with it because the good ladies and gentlemen from the Clerk's Department have allowed it." This should be about policy making.
      Mr. Hendrick: My hon. Friend is making an important point, which the hon. Member for Buckingham (Mr. Bercow) seemed to sidestep when I intervened. If the Opposition were keen for employers to take up private health insurance for all employees, and wanted all the firms in Britain to take it up, I could see some justification for the proposed exemption from the extra 1 per cent. charge. However, the hon. Gentleman is not saying that. He is saying that just because some employers look after

      653
      some employees, it is a good idea for the Government not to ask them to make any further contributions in respect of other employees, and to encourage other companies to do the same. Does my hon. Friend not think that that is a dishonourable position?
      John Mann: I think that it is a muddled and confused hedge of a position. It is an attempt to give some spin to the outside world, the business community and the financial pages of certain newspapers, but the substance is missing.
      Mr. Bercow: I assure the hon. Gentleman that our position is not muddled, but his is assuredly disingenuous. Will he not honestly admit that he opposes any reduction in the national insurance burden borne by employers in respect of their employees if they choose to provide private health insurance? Can he not get his mind around the notion that, in respect of employees for whom an employer provides private health insurance, a respectable argument for a reduction in the NIC burden can be, and has been, advanced?
      7.15 pm
      John Mann: Like the president of the Bassetlaw chamber of commerce, I should say that I am no longer an active director or participant in my company. I am merely a shareholder, so the so-called burden on business has only one direct impact on me: a potential minimal reduction in dividends year on year. As someone who has been prepared to take forward the entrepreneurial challenge of creating 1.5 million new jobs since Labour came to power in 1997, I have no problem with helping business. From a business point of view, however, the option of private health insurance is not financially prudent. As a shareholder, rather than an active participant or director, I will press my directors never to have the poor business acumen to throw money away precisely when this Government are building up the national health service, which is growing in exactly the way that any good business would wish it to grow—so as to give us a work force who are protected in sickness and a community and future work force who are healthier overall. That is exactly the politics of this debate.
      I shall finish on the precise point about national insurance contributions with which the amendment deals. It is woolly and weak. It panders to posturing politics instead of providing an alternative. I think that it is disgraceful, as was the hon. Gentleman's contribution, because it failed to address any of the specifics. The difference between paying one or two times is a grey area, where we can pick and choose in any way we want. That is a bad way of making policy and legislating, and it is a shame that the official Opposition are reduced to taking such an approach instead of making a substantive proposal.
      Adam Price: I shall confine my comments to amendment No. 15, which is tabled in my name alone but enjoys considerable support from Plaid Cymru and the Scottish National party. Hon. Members in all parts of the House will be relieved to know that I aim to make my comments a good deal more succinct than those of the hon. Member for Buckingham (Mr. Bercow), whose speech was not so much exhaustive
      654
      as exhausting. Nevertheless, we shall continue to support amendments Nos. 7, 9, 12 and 13, which support small business.
      Our position in Plaid Cymru and the SNP has been consistent with what has been—certainly for the past hour—a long and arduous debate about the Bill. We believe that the provisions are necessary, but insufficient to meet the challenge that we face in revitalising our public services. The underlying motives are correct, but the means of the achieving those aims are not necessarily provided.
      Our principal concern is enshrined in amendment No. 15. The use of employers' contributions as a mechanism for delivering new investment in public services is fundamentally flawed. As the Bill introduces a payroll tax, and as the public sector is the biggest employer in many—if not all—of our constituencies, it will reduce the positive impact of the extra resources going into health and social services. It will also exert additional strain on other parts of the public sector that have so far received no definite promise of extra funds.
      As has been said on many occasions, the Government are giving to the cash-starved public services with one hand, but taking with the other. That is greatly to be regretted, especially in the context of what is already a difficult financial environment for public services. It is difficult for two reasons. First, there is the growing doubt about whether the Chancellor will achieve his forecasts for economic growth. We discovered during the recess, in figures from the Office for National Statistics, that the economy has been at a standstill since autumn last year, and is therefore teetering on the brink of recession. We now have the slowest economic growth in the G7.
      Secondly, while economic growth has ground to a halt, which will have an obvious impact on the ability to deliver extra resources for the public sector, inflation in the public sector is also increasing apace. As we have heard from city analysts, including Michael Saunders of Schroder Salomon Smith Barney, public sector pay and input costs are increasing faster than those in the private sector because of pent-up demand. The worry is that the extra investment promised and so badly needed will be dissipated by a combination of lower economic growth and higher costs.
      I mention in parenthesis that Wales and Scotland face the additional pressures of the Barnett squeeze, of which the Committee might not be aware. That means that the rates of increase in health expenditure will be lower in our two countries than in England. The figure for England will be 7.5 per cent., whereas for Wales it will be 6.8 per cent. and for Scotland 6.3 per cent.
      It is in that context of doubts about the impact on public expenditure of lower economic growth and higher public sector inflation that we have to consider the proposal to increase public sector employer contributions. Our amendment is designed to ensure that we get the full benefit of the extra resources, that we get the full force of that benefit in years to come, and that we get the resources in early. In health, for example, we are aware that it takes time to train new nurses, doctors and consultants.
      It is vital that we do not impose any impediment or additional constraint through the public sector employer contribution. In previous debates, for obvious reasons, we focused on additional costs to the health service resulting from the measure. The Library estimates a cost to the

      655
      NHS in Wales and Scotland of an extra £37 million a year, and that money will come out of the NHS budget in Wales and Scotland. The cost to the NHS in England is estimated to be £205 million a year.
      As a result of the Bill, that outcome will be replicated in other sectors that will not receive additional hypothecated funds, and as an internationalist I should point out that it will be replicated in England as well. For example, next year the further education sector in England will probably receive an additional £85 million, which is similar to this year's funding increase and represents about 2.5 per cent. extra in its annual budget allocation. However, according to the Department for Education and Skills, £25 million of that £85 million will be eaten up by the national insurance employer contribution increase, and because of additional charges for utilities and various other equipment costs, a further £25 million to £30 million will be needed simply to achieve a real-terms standstill.
      That will leave a maximum of £35 million to cover pay increases, which will mean a pay award in the sector of only slightly more than 1.25 per cent. That is less than the headline inflation rate, for which the latest figure is 1.5 per cent., and far less than the average wage increase throughout the economy as a whole, which is about 4 per cent.
      That will happen in a sector that is already experiencing considerable difficulties with pay agreements and pay differentials with teachers—and the problems in further education will be mirrored in secondary and higher education. Local government is experiencing similar problems: the Labour chair of the Local Government Association, Jeremy Beecham, has said that 80 per cent. of the additional money going into local government for social services will be eaten up by the increase in local government employer contributions alone.
      That is why we, through our amendment, are attempting to provide some insulation for the public sector at a difficult time. We acknowledge and welcome the fact that in the Bill the Government have taken two steps forward, by recognising the need for extra investment and the need for taxation to fund it. Unfortunately, for two small steps forward they have taken one step back—or, as the accident and emergency consultant Peta Longstaff said during the post-Budget photo-opportunity for the Prime Minister and the Chancellor, the Government have scored an own goal by providing additional resources with one hand, but taking a substantial amount back with the other.
      Unfortunately, by raising national insurance contributions as they have chosen to do, the Government have raised expectations but simultaneously limited the ability to deliver on them. Despite the long debate that we have had, it is inevitable that we will have to revisit the subject because of the hole in the Government's finances and the inconsistency in their thinking. We will have to continue this debate until we get an adequate solution for the public sector—one that does not give with one hand and take with the other.
      Dr. Evan Harris: The hon. Member for Buckingham (Mr. Bercow) is a pleasant and eloquent man, but it is a pity when he speaks as he did when moving the amendment, because to speak at such length causes us to have a far more diffuse debate than we might otherwise
      656
      have had about issues that are worthy of punchier debate. Sometimes, unfortunately, he wastes his eloquence. By contrast, the hon. Members for Bassetlaw (John Mann) and for East Carmarthen and Dinefwr (Adam Price) made speeches that were clear and to the point.
      The hon. Member for Buckingham made significant points about his concern for certain businesses, and there are points of principle that should be addressed, especially those that relate to tax relief for businesses that pay for private health insurance. I hope that he will respond to some of the points that I make in that respect. The hon. Member for Bassetlaw raised some practical issues that make it difficult to see how such a system could work, but it is worth exploring the matters of principle as well.
      If their amendment reflects the approach that the Conservatives have chosen to adopt, they have to say where it will end. It is reasonable to ask whether, if an employer decided that to attract highly sought-after staff who are often highly paid they would offer a contribution toward fees for private sector education, the hon. Member for Buckingham would advocate that there should be some remission of or exemption from income tax or corporation tax, which comprise the general pot out of which education funds are paid. Similarly, if an employer decided to give sick pay provision that was more generous than the basic statutory package, would he say that the employer should benefit from a reduction in tax on the ground that they should not pay twice for statutory sick pay provision that is paid for by the state through taxation? If a person did not use local schools or had long-term care insurance, should that person receive a deduction or relief on their council tax payments?
      I contend that it would be difficult to argue both that the answer to those questions is yes and that we would still have a fair system wherein the better-off are engaged in state provision of a welfare safety net. If one believes that people should not pay twice, the better-off will be even more reluctant to pay tax at all and might be tempted to plough their own furrow, and that will undermine the tax base for important public services. That is an issue of principle, and it is important that the Conservatives make it clear whether that is to be their general approach.
      In a similar vein, if a company did not provide a benefit—private health insurance—from its receipts, it may well be that it would pay tax on the money it used to do so. Therefore—I do not mean this in a derogatory way—the company might use the Conservatives' proposal as a way of avoiding paying a different tax. A relief on such a use of employers' funds might amount to a relief that is sought—or already achieved—by not paying a certain amount on profits or dividend payments.
      As the hon. Member for Bassetlaw said, the extent of insurance is variable. In an intervention when the hon. Member for Buckingham was in full-on mode, I tried to make the point that—to use his terms—an employer pays private health insurance to ensure that their employee is available to work and doing so therefore contributes to their business. However, people who are off work sick often use primary health care provision or emergency provision, which are never covered by private health insurance schemes, or they may suffer from chronic illness, which is often not covered by private health insurance schemes. In that case, why should there be full relief?

      657
      Imagine two employees who are using an emergency service—an NHS intensive care unit or ambulance provision. One does not benefit from private health insurance, the other benefits from private health insurance outwith the particular health incident that has caused them to use the emergency service. If both employees are using the national health service, why should only the latter's employer receive some benefit? There is therefore a problem with this approach.
      There is also an issue about fairness. Some firms provide private health insurance for all their employees from the cleaners upwards, but generally speaking, the hon. Gentleman will accept, private health insurance is a perk for the better-paid. He is therefore proposing a subsidy for people who are better-paid; it would not be directed at people on average pay or those who are less well-paid.
      7.30 pm
      The hon. Gentleman may argue that his amendment provides an incentive that would encourage people to take out private health insurance; they would get the benefit of tax relief so, in some way, the amendment may reduce the pressure on the NHS. He did not make that point, but a similar point was made earlier about tax relief for better-off pensioners. However, he will know that elasticity in demand for private health insurance has not been demonstrated. Between 1990 and 1997, when tax relief for private health insurance for better-off pensioners operated, there was not a significant increase in the take-up of private health insurance so, if that was one of the aims of the hon. Gentleman's policy, it will not be delivered. He must deal with significant issues of principle; it is unfortunate that during such a long speech we were not able to intervene and invite him to comment on them.
      The hon. Gentleman made some valid points about the burden of taxation on small businesses in amendments Nos. 7 and 9. He knows that I share his concern, which is why I should have preferred a tax rise for high earners with an income of more than £100,000 to a tax on employers, especially in small businesses, where the average take-home pay is £13,000 after, as he almost conceded, accountants' adjustments—that may not be a genuine figure for take-home pay. Nevertheless, I share his concern and I cannot understand why he does not feel that it is fairer to ask wealthy people earning more than £100,000 to pay more.
      The hon. Member for Christchurch (Mr. Chope), described 50 per cent. tax rates on income over £100,000 as obscene, which was the strongest term used by Conservative Front Benchers today and shows an imbalance in priorities; they are seeking to defend the better-off from what the hon. Member for Christchurch described as an obscenity rather than seeking to defend people who cannot get the health service that they need because of lack of funding. I return to the point that I made at the beginning of this afternoon's debate; the hon. Member for Buckingham is effectively offering tax cuts in his amendment to various parts of the business community. He did not say how he would pay for them, although he tried to explain why he did not do so; as yet, he does not have a policy to put before the electorate.
      658
      However, it is not responsible politics to salami-slice the provision on tax-cuts, even in deserving cases, without explaining the way in which that would be paid for.
      Mr. Hendrick: I certainly agree with the hon. Gentleman's criticisms of the Conservative position. However, does he not agree that his own policies of clobbering people on more than £100,000 with a 10 per cent. increase—
      The Chairman: Order. We cannot go back to that as we are not on that amendment.
      Dr. Harris: The Conservatives must explain how they will pay for their proposal. In the previous group of amendments, we made clear the way in which we would have preferred to raise the money. However, having failed in our attempt to achieve that fairer method, we now face the question of whether the money should go to the health service or whether there should be tax relief for businesses. While we sympathise with businesses which have problems—the hon. Member for Buckingham knows that we share his view about the iniquity of IR35, on which our Treasury spokespeople have campaigned alongside his colleagues—funding has to go to the health service, which is why we cannot support his suggested tax reliefs.
      Finally, the hon. Member for East Carmarthen and Dinefwr made some good points when speaking to his amendment. To a certain extent, using employers' national insurance contributions is self-defeating, particularly when social services departments have to pay more than they may get from the Government's disbursement of the receipts, which is why on Second Reading we said that it is vital that more of the money raised by the Bill goes to social services than is planned by the Government, otherwise they may not get any benefit and, indeed, are in danger of getting a net disbenefit. That situation has been created by the underfunding of other public services; we are robbing further education and police authorities, for example, to pay for the health service, which cannot be right. The Government should not look at each public service in isolation, but should recognise that there is still underfunding across the board. They should raise their ambitions for getting resources into public services fairly and announce changes, preferably before an election, to income tax. We therefore share the view of members of Plaid Cymru that income tax is the best way to pay for increased funding. The Government have missed the opportunity to tackle all those services, but it is not appropriate to go into that now. However, we cannot support the Conservative amendment.
      Dawn Primarolo: The hon. Member for Buckingham (Mr. Bercow) took 55 minutes to introduce his amendments. While they are important, I hope to be a little briefer in my response to them and amendment No. 15, which was tabled by the hon. Member for East Carmarthen and Dinefwr (Adam Price).
      I shall deal with the amendments in the order in which the hon. Member for Buckingham introduced them. Amendments Nos. 6 and 8 cover private health care. The hon. Member for Oxford, West and Abingdon (Dr. Harris) and my hon. Friend the Member for Bassetlaw (John Mann) made some good observations about the

      659
      problems of funding that, and the treatment that private medical insurance may or may not provide for, as opposed to the NHS funding that our arrangements seek to secure, such as the funding of primary care and emergency treatment.
      The amendments are interesting, as was our debate and the enthusiasm with which the hon. Member for Buckingham introduced them. The House will realise that they provide the first hint of the Conservatives' intentions for the NHS and propose little more than a thinly-veiled subsidy for companies offering private medical insurance to their employees. That is not the most efficient way of trying to support the NHS indirectly, and it is certainly expensive. As the hon. Member for Oxford, West and Abingdon said, when the Conservatives introduced relief on private medical insurance for people over 60, between 1990 and 1997, there was precious little growth in the number of people who took out such insurance, although it cost the Exchequer £650 million. If we look carefully at the way in which companies operate, we see that private medical insurance is provided as a benefit; the company pays for a company policy, which usually means that large employers can negotiate such policies for groups of employees at a discount, whereas smaller companies cannot. The amendment would therefore help some, but not all, employers.
      The Government reject the basic proposition that companies should receive payment for providing private health care. If companies decide to provide private medical insurance for their employees that is up to them, but the Government do not believe that the taxpayer should subsidise them for providing such insurance. We remain convinced that the best way to use the resources available is to provide for the health care of all residents in the United Kingdom by funding the NHS directly.
      About 120,000 employers are already providing private medical insurance to about 1.9 million employees. They do that in the knowledge that they are still making as well a contribution to the NHS through employers' national insurance contributions. They have never suggested that because they are providing private medical insurance there should be a reduction in national insurance contributions. We know, because employers have repeatedly made the case, that they have a strong interest in a healthy labour work force. The CBI has made it clear that it is important to companies that they have an efficiently funded NHS to which their employees have access, a service that is comprehensive and available on the basis of need.
      The hon. Member for Buckingham referred also to fairness. He talked about costs to employers. Let us take employer contributions to health care benefits for the year 2000–01. In France, an average employer will contribute about £58 a week. In the United States, it is £37.50. In Germany, it is £31, and in Britain, it is £9. Nine pounds contribute to a comprehensively available health service on the basis of need. The system ensures that employers get an extremely good deal.
      The hon. Gentleman moved on to the self-employed when dealing with amendments Nos. 7 and 9. They are designed to help small unincorporated businesses. My problems with the amendments is not necessarily the intention that lies behind them, but the suggestion that contributions would not be made to the health service.
      660
      The Government have demonstrated time and again their ability to assist these very businesses, whether it be through reductions in the threshold for the reduced rate of national insurance or in helping the self-employed and service companies in taking forward their business. However, the amendments would give the self-employed further benefits in a system that would cost the taxpayer £450 million, and would give self-employed companies a greater benefit than they already have.
      If we compare the national insurance contributions paid by the self-employed with those paid by employees and employers, it is estimated that the self-employed already under-contribute by about £2.4 billion. That figure takes into account the fact that the self-employed would have a reduced benefit position. The self-employed are already getting an extremely good deal from the national insurance fund. The hon. Member for Buckingham seeks to make everyone else pay for the service while suggesting that the self-employed should not.
      7.45 pm
      The hon. Gentleman overlooks the fact that overall the self-employed continue to get an extremely good deal. How much would they pay in national insurance contributions on profits of £30,000 a year, and how much would an employee pay on earning that amount? The hon. Gentleman also overlooks the fact that the national insurance contributions of an employer who is self-employed are deductible from his profits and gains. That deduction reduces their class 4 liability. Such employers already have an advantageous position in the national insurance system. Through the amendment the hon. Gentleman seeks to reject the basic principle that all of us should contribute something to assisting growth and investment in the NHS.
      I move on to the amendments that relate to service companies. These amendments seek to ensure that a one-person service company with a turnover of less than £1 million should pay employers' national insurance contributions at the old rate of 11.8 per cent. rather than the proposed new rate of 12.8 per cent. The amendments may be intended to apply only to those service companies that come within the legislation on service companies that is commonly referred to as IR35. However, the hon. Gentleman does not define the term "service company". There is not such a definition in legislation. The amendments as drafted would allow a huge number of firms that he would not intend to have relief to have access to it. Drafting problems aside, we do not believe that the intended objective is appropriate, and I shall briefly explain why.
      We introduced the service company legislation to address a specific unfairness in the tax system. Put broadly, the legislation ensures that someone who works through a service company or for an intermediary, such as a partnership, but who is otherwise no different from a conventional employee, pays broadly the same tax and national insurance contributions as an employee. That means that anyone choosing to work through a service company, but otherwise working in a way that makes them no different from a directly employed employee, will pay essentially the same tax and national insurance contributions as a direct employee.
      The hon. Member for Oxford, West and Abingdon went on about fairness, equity and progression. Yet he objects to the idea that people in the workplace who are in exactly

      661
      the same working position as others should be able to play with the tax rules to ensure that they pay less than somebody working alongside them.
      It is important to recognise that in the working arrangements in service companies, there are two separate and distinct legal bodies. There is the service company as the employer and the person employed by it who is on PAYE. Each is a separate body and each has their own rights and responsibilities and access to different parts of the tax system.
      Where someone chooses to be employed in a service company, that company will have full employer responsibilities, and that includes the 1 per cent. increase. I do not believe that it is fair or appropriate to say that those service companies as employers will not be expected to discharge their responsibilities. The amendments are a sop to try to find as many Trojan horses as possible to come into tax legislation so that employers in future will not have to pay their contributions. That is not acceptable. I ask my right hon. and hon. Friends to vote against the amendments. They are about breaking the principle that all of us, employers and employees, should make a contribution to the NHS.
      The hon. Member for East Carmarthen and Dinefwr talked about the public sector. Amendment No. 13 provides that we excuse public sector employers from paying the 1 per cent. national insurance contribution increase on employee class 1 secondary NICs. I will not detain the House because I know that the hon. Gentleman spoke specifically about the principle for the public sector. That being so, I will not go into the fact that the amendment does not cover Northern Ireland, for instance. There are other rather important points. Effectively, however, the amendment suggests that we should excuse the Government and other public bodies from making their own employer contributions.
      Although the Government believe firmly in the public sector, we do not think it should be treated as a special case in terms of national insurance contributions. We believe that public and private sectors should be on a level playing field. Let me add that trying to agree on a definition of a public-sector company could lead us down some difficult and complex routes.
      It would be strange to suggest that public-sector employers should not be subject to the same requirements as all other employers, but I think that the hon. Member for East Carmarthen and Dinefwr made a genuine point about future investment in all our public sectors. Let me say this to him. The increases in national insurance contributions must be set against a background of high levels of growth in spending on key services. Spending on services will be £19.5 billion higher in 2003–04 than in 2002–03, which is itself a substantial increase.
      I think it entirely wrong, in terms of principle, to try to distinguish the responsibilities of employers by virtue of whether they belong to the public or the private sector. Whichever sector they are in, employers have responsibilities in regard to their employees, not just in national insurance but across the board. It is dangerous to suggest that we can somehow make an exception in the case of national insurance contributions.
      662
      We are discussing a proposal in the context of wider spending on public services. No doubt the hon. Gentleman will want to pursue his point in the future—indeed, he said that he would—but if he presses his amendment I will have to ask my right hon. and hon. Friends to oppose it. I hope that, as the principle has been given a good airing, he will decide not to do so.
      If any of the amendments are put to the vote, I shall ask my colleagues to oppose them.
      Mr. Bercow: I am mortified that the Paymaster General has not been persuaded by the quality of the amendments.
      Dawn Primarolo: Nearly.
      Mr. Bercow: I am grateful to the Paymaster General for that, but apparently she was not quite persuaded. Methinks, Sir Alan, that she doth protest too much.
      When there was some incentive for the provision of private medical insurance for pensioners, there was also some increase in take-up. Since the vicious and unnecessary removal of that tax incentive, we have seen the damage that has been done: people who benefited from the provision and afforded the insurance have since been unable to do so. We were offering some encouragement to employers providing private medical insurance packages for their staff. As Labour Members know, the atavistic hostility to that incentive was plain for all to see.
      We were in favour of helping unincorporated businesses suffering under the heavy, and increasingly heavy, burden of taxation imposed by this Government. The Paymaster General made it abundantly clear that she did not sympathise, that she thought that those businesses already had it very easy, and that she did not want to assist them. We wanted to help personal service companies, but she did not.
      I am very disappointed, and we intend to press our amendment to a vote.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 126, Noes 338.

      Division No. 256]

      [7.54 pm

      AYES

      Amess, David

      Davies, Quentin (Grantham)

      Atkinson, Peter (Hexham)

      Davis, Rt Hon David (Haltemprice)

      Bacon, Richard

      Dorrell, Rt Hon Stephen

      Barker, Gregory

      Duncan, Peter (Galloway)

      Baron, John

      Fabricant, Michael

      Bellingham, Henry

      Fallon, Michael

      Bercow, John

      Field, Mark (Cities of London)

      Beresford, Sir Paul

      Flight, Howard

      Blunt, Crispin

      Flook, Adrian

      Boswell, Tim

      Forth, Rt Hon Eric

      Bottomley, Peter (Worthing W)

      Fox, Dr Liam

      Bottomley, Rt Hon Virginia

      Francois, Mark

      Brady, Graham

      Garnier, Edward

      Browning, Mrs Angela

      Gibb, Nick

      Burns, Simon

      Gillan, Mrs Cheryl

      Burnside, David

      Goodman, Paul

      Cameron, David

      Gray, James

      Chope, Christopher

      Grayling, Chris

      Clifton-Brown, Geoffrey

      Green, Damian (Ashford)

      Collins, Tim

      Greenway, John

      Conway, Derek

      Grieve, Dominic

      Cormack, Sir Patrick

      Gummer, Rt Hon John

      Cran, James

      Hammond, Philip

      663

      Hawkins, Nick

      Randall, John

      Hayes, John

      Redwood, Rt Hon John

      Heathcoat-Amory, Rt Hon David

      Robathan, Andrew

      Hendry, Charles

      Robertson, Hugh (Faversham)

      Hoban, Mark

      Robertson, Laurence (Tewk'b'ry)

      Hogg, Rt Hon Douglas

      Roe, Mrs Marion

      Horam, John

      Ruffley, David

      Howarth, Gerald (Aldershot)

      Sayeed, Jonathan

      Jack, Rt Hon Michael

      Selous, Andrew

      Jackson, Robert (Wantage)

      Simmonds, Mark

      Johnson, Boris (Henley)

      Simpson, Keith (Mid-Norfolk)

      Key, Robert

      Soames, Nicholas

      Kirkbride, Miss Julie

      Spelman, Mrs Caroline

      Laing, Mrs Eleanor

      Spicer, Sir Michael

      Lait, Mrs Jacqui

      Spring, Richard

      Lansley, Andrew

      Stanley, Rt Hon Sir John

      Leigh, Edward

      Steen, Anthony

      Letwin, Oliver

      Streeter, Gary

      Lewis, Dr Julian (New Forest E)

      Swire, Hugo

      Liddell-Grainger, Ian

      Syms, Robert

      Lidington, David

      Tapsell, Sir Peter

      Loughton, Tim

      Taylor, John (Solihull)

      Luff, Peter

      Taylor, Sir Teddy

      McIntosh, Miss Anne

      Tredinnick, David

      MacKay, Rt Hon Andrew

      Turner, Andrew (Isle of Wight)

      Maclean, Rt Hon David

      Tyrie, Andrew

      McLoughlin, Patrick

      Viggers, Peter

      Malins, Humfrey

      Walter, Robert

      Maples, John

      Waterson, Nigel

      Mates, Michael

      Watkinson, Angela

      May, Mrs Theresa

      Whittingdale, John

      Mercer, Patrick

      Widdecombe, Rt Hon Miss Ann

      Mitchell, Andrew (Sutton Coldfield)

      Wiggin, Bill

      Moss, Malcolm

      Willetts, David

      Murrison, Dr Andrew

      Winterton, Mrs Ann (Congleton)

      Norman, Archie

      Winterton, Nicholas (Macclesfield)

      O'Brien, Stephen (Eddisbury)

      Yeo, Tim

      Osborne, George (Tatton)

      Young, Rt Hon Sir George

      Page, Richard

      Paice, James

      Tellers for the Ayes:

      Pickles, Eric

      Mr. Desmond Swayne and

      Prisk, Mark

      Mr. Julian Brazier.

      NOES

      Adams, Mrs Irene (Paisley N)

      Brooke, Mrs Annette L

      Ainger, Nick

      Brown, Russell (Dumfries)

      Ainsworth, Bob (Cov'try NE)

      Bruce, Malcolm

      Allen, Graham

      Bryant, Chris

      Anderson, Janet (Rossendale)

      Buck, Ms Karen

      Armstrong, Rt Hon Ms Hilary

      Burden, Richard

      Atkins, Charlotte

      Burnham, Andy

      Austin, John

      Burstow, Paul

      Bailey, Adrian

      Cable, Dr Vincent

      Baird, Vera

      Cairns, David

      Baker, Norman

      Calton, Mrs Patsy

      Banks, Tony

      Campbell, Alan (Tynemouth)

      Barnes, Harry

      Campbell, Mrs Anne (C'bridge)

      Barrett, John

      Campbell, Rt Hon Menzies (NE Fife)

      Barron, Kevin

      Battle, John

      Campbell, Ronnie (Blyth V)

      Beard, Nigel

      Carmichael, Alistair

      Begg, Miss Anne

      Casale, Roger

      Benn, Hilary

      Caton, Martin

      Bennett, Andrew

      Cawsey, Ian

      Benton, Joe

      Challen, Colin

      Betts, Clive

      Chapman, Ben (Wirral S)

      Blackman, Liz

      Chidgey, David

      Blears, Ms Hazel

      Clapham, Michael

      Blizzard, Bob

      Clark, Dr Lynda (Edinburgh Pentlands)

      Boateng, Rt Hon Paul

      Bradley, Rt Hon Keith (Withington)

      Clark, Paul (Gillingham)

      Bradley, Peter (The Wrekin)

      Clarke, Rt Hon Tom (Coatbridge)

      Bradshaw, Ben

      Clarke, Tony (Northampton S)

      Brake, Tom

      Clelland, David

      Breed, Colin

      Clwyd, Ann

      Brennan, Kevin

      Coaker, Vernon

      664

      Coffey, Ms Ann

      Hendrick, Mark

      Cohen, Harry

      Hepburn, Stephen

      Coleman, Iain

      Heppell, John

      Connarty, Michael

      Heyes, David

      Cook, Frank (Stockton N)

      Hill, Keith

      Cook, Rt Hon Robin (Livingston)

      Hinchliffe, David

      Corbyn, Jeremy

      Hodge, Margaret

      Corston, Jean

      Holmes, Paul

      Cotter, Brian

      Hood, Jimmy

      Cox, Tom

      Hoon, Rt Hon Geoffrey

      Cruddas, Jon

      Hope, Phil

      Cryer, John (Hornchurch)

      Hopkins, Kelvin

      Cummings, John

      Howarth, Rt Hon Alan (Newport E)

      Cunningham, Jim (Cov'try S)

      Howarth, George (Knowsley N)

      Cunningham, Tony (Workington)

      Howells, Dr Kim

      Dalyell, Tam

      Hughes, Beverley (Stretford)

      Davey, Edward (Kingston)

      Humble, Mrs Joan

      Davey, Valerie (Bristol W)

      Hurst, Alan

      Davidson, Ian

      Iddon, Dr Brian

      Davies, Rt Hon Denzil (Llanelli)

      Illsley, Eric

      Davies, Geraint (Croydon C)

      Ingram, Rt Hon Adam

      Dawson, Hilton

      Irranca-Davies, Huw

      Dean, Mrs Janet

      Jackson, Glenda (Hampstead)

      Denham, Rt Hon John

      Jamieson, David

      Dismore, Andrew

      Jenkins, Brian

      Dobbin, Jim

      Johnson, Alan (Hull W & Hessle)

      Dobson, Rt Hon Frank

      Johnson, Miss Melanie (Welwyn Hatfield)

      Donohoe, Brian H

      Doran, Frank

      Jones, Helen (Warrington N)

      Doughty, Sue

      Jones, Jon Owen (Cardiff C)

      Dowd, Jim

      Jones, Kevan (N Durham)

      Drew, David

      Jones, Martyn (Clwyd S)

      Drown, Ms Julia

      Joyce, Eric

      Eagle, Angela (Wallasey)

      Keen, Alan (Feltham & Heston)

      Edwards, Huw

      Keen, Ann (Brentford & Isleworth)

      Efford, Clive

      Kemp, Fraser

      Ellman, Mrs Louise

      Khabra, Piara S

      Ewing, Annabelle

      Kidney, David

      Farrelly, Paul

      Kilfoyle, Peter

      Field, Rt Hon Frank (Birkenhead)

      King, Ms Oona (Bethnal Green)

      Fisher, Mark

      Kirkwood, Archy

      Fitzsimons, Mrs Lorna

      Knight, Jim (S Dorset)

      Flint, Caroline

      Kumar, Dr Ashok

      Flynn, Paul

      Lamb, Norman

      Follett, Barbara

      Lammy, David

      Foster, Rt Hon Derek

      Lawrence, Mrs Jackie

      Foster, Don (Bath)

      Laws, David

      Foster, Michael (Worcester)

      Lazarowicz, Mark

      Foster, Michael Jabez (Hastings)

      Leslie, Christopher

      Foulkes, George

      Levitt, Tom

      Francis, Dr Hywel

      Lewis, Ivan (Bury S)

      Galloway, George

      Liddell, Rt Hon Mrs Helen

      Gapes, Mike

      Linton, Martin

      Gardiner, Barry

      Lloyd, Tony

      George, Andrew (St Ives)

      Love, Andrew

      Gerrard, Neil

      Lucas, Ian

      Gibson, Dr Ian

      Luke, Iain

      Gidley, Sandra

      Lyons, John

      Gilroy, Linda

      McCabe, Stephen

      Godsiff, Roger

      McCafferty, Chris

      Goggins, Paul

      McDonagh, Siobhain

      Griffiths, Jane (Reading E)

      McFall, John

      Griffiths, Win (Bridgend)

      McGuire, Mrs Anne

      Grogan, John

      McIsaac, Shona

      Hall, Mike (Weaver Vale)

      McKechin, Ann

      Hamilton, David (Midlothian)

      McKenna, Rosemary

      Hamilton, Fabian (Leeds NE)

      McNamara, Kevin

      Hancock, Mike

      McNulty, Tony

      Hanson, David

      Mactaggart, Fiona

      Harris, Dr Evan (Oxford W)

      McWalter, Tony

      Harris, Tom (Glasgow Cathcart)

      Mahmood, Khalid

      Harvey, Nick

      Mahon, Mrs Alice

      Healey, John

      Mallaber, Judy

      Heath, David

      Mann, John

      Henderson, Doug (Newcastle N)

      Marris, Rob

      Henderson, Ivan (Harwich)

      Marsden, Gordon (Blackpool S)

      665

      Marshall-Andrews, Robert

      Skinner, Dennis

      Martlew, Eric

      Smith, Angela (Basildon)

      Meacher, Rt Hon Michael

      Smith, Geraldine (Morecambe)

      Miliband, David

      Smith, Jacqui (Redditch)

      Miller, Andrew

      Smith, John (Glamorgan)

      Mitchell, Austin (Gt Grimsby)

      Smith, Llew (Blaenau Gwent)

      Moffatt, Laura

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

      Mole, Chris

      Soley, Clive

      Moonie, Dr Lewis

      Southworth, Helen

      Moore, Michael

      Starkey, Dr Phyllis

      Moran, Margaret

      Steinberg, Gerry

      Mountford, Kali

      Stevenson, George

      Mullin, Chris

      Stewart, David (Inverness E)

      Munn, Ms Meg

      Stewart, Ian (Eccles)

      Murphy, Denis (Wansbeck)

      Stinchcombe, Paul

      Murphy, Jim (Eastwood)

      Stoate, Dr Howard

      Naysmith, Dr Doug

      Strang, Rt Hon Dr Gavin

      Oaten, Mark

      Straw, Rt Hon Jack

      O'Brien, Mike (N Warks)

      Stringer, Graham

      O'Neill, Martin

      Stuart, Ms Gisela

      Organ, Diana

      Stunell, Andrew

      Palmer, Dr Nick

      Sutcliffe, Gerry

      Pearson, Ian

      Taylor, Ms Dari (Stockton S)

      Perham, Linda

      Taylor, Matthew (Truro)

      Picking, Anne

      Thomas, Gareth R (Harrow W)

      Pickthall, Colin

      Thomas, Simon (Ceredigion)

      Pike, Peter

      Thurso, John

      Plaskitt, James

      Timms, Stephen

      Pollard, Kerry

      Tipping, Paddy

      Pond, Chris

      Todd, Mark

      Pope, Greg

      Tonge, Dr Jenny

      Pound, Stephen

      Trickett, Jon

      Prentice, Ms Bridget (Lewisham E)

      Truswell, Paul

      Prentice, Gordon (Pendle)

      Turner, Dennis (Wolverh'ton SE)

      Price, Adam

      Turner, Dr Desmond (Kemptown)

      Primarolo, Dawn

      Twigg, Derek (Halton)

      Prosser, Gwyn

      Twigg, Stephen (Enfield)

      Pugh, Dr John

      Vis, Dr Rudi

      Purchase, Ken

      Walley, Ms Joan

      Purnell, James

      Ward, Ms Claire

      Quin, Rt Hon Joyce

      Wareing, Robert N

      Quinn, Lawrie

      Watts, David

      Rammell, Bill

      Webb, Steve

      Rapson, Syd

      Weir, Michael

      Reed, Andy (Loughborough)

      Whitehead, Dr Alan

      Reid, Alan (Argyll & Bute)

      Williams, Rt Hon Alan (Swansea W)

      Rendel, David

      Roche, Mrs Barbara

      Williams, Hywel (Caernarfon)

      Rooney, Terry

      Willis, Phil

      Ross, Ernie

      Wills, Michael

      Roy, Frank

      Winnick, David

      Ruddock, Joan

      Winterton, Ms Rosie (Doncaster C)

      Russell, Bob (Colchester)

      Wishart, Pete

      Ryan, Joan

      Wood, Mike

      Salmond, Alex

      Woodward, Shaun

      Salter, Martin

      Woolas, Phil

      Sanders, Adrian

      Worthington, Tony

      Savidge, Malcolm

      Wray, James

      Sawford, Phil

      Wright, David (Telford)

      Sedgemore, Brian

      Wright, Tony (Cannock)

      Sheridan, Jim

      Younger-Ross, Richard

      Shipley, Ms Debra

      Simon, Siôn

      Tellers for the Noes:

      Simpson, Alan (Nottingham S)

      Mr. Ivor Caplin and

      Singh, Marsha

      Jim Fitzpatrick.

      Question accordingly negatived.
      Mr. Chope: I beg to move amendment No. 10, in page 3, line 3, at end insert—
      'provided that, in respect of employees of pension age or over at the beginning of the year of assessment, the secondary percentage shall be 11.8 per cent.'.
      The Second Deputy Chairman of Ways and Means (Sir Michael Lord): With this it will be convenient to discuss amendment No. 11, in page 3, line 14, at end insert—
      'provided that, in respect of employees of pension age or over at the beginning of the year of assessment, the secondary percentage shall be 11.8 per cent.'.
      Mr. Chope: During the earlier part of the debate, the Government said that it would not be fair if pensioners were penalised as a result of the Bill. The amendment would ensure that pensioners would not by being employed attract an additional 1 per cent. levy for their employers. It would also—I hope hon. Members on both sides of the Committee will support this—give a modest but important encouragement to employers to employ people of pensionable age.
      There is an increasing feeling that age discrimination operates in the employment market. We know that those who are of pensionable age wish—[Interruption.]
      The Second Deputy Chairman: Order. There are general conversations throughout the Chamber. It is important that the Committee listens to the hon. Gentleman.
      Mr. Chope: Thank you, Sir Michael.
      It is important that the Committee should address seriously discrimination in the employment market. It is increasingly necessary for many pensioners to try to obtain employment to make ends meet. It is a separate hobby horse of mine, but as a result of successive increases in council tax far in excess of inflation, an increasing number of pensioner households are in financial difficulties. To an extent, people below pensionable age who are in financial difficulties can use the labour market and change jobs, or at least get themselves in employment, but that option is not so easily available to pensioners. The amendment would give a modest incentive to employers to take on people of pensionable age.
      In the past, when this issue has been raised the Government have been dismissive. They have argued that the income from employers' national insurance contributions pays for many other services, including—but not exclusively—pensions. They have also argued that the principle that people who are self-employed or not employed should not have to pay class 1 and class 2 contributions after they reach pensionable age should not be extended to their employers.
      The Bill hypothecates the proceeds of such charges to the national health service, but elsewhere in the Bill the Government have accepted the argument that it would be unreasonable to expect pensioners to contribute to additional costs in respect of the health service. That is why the hon. Lady rejected the argument advanced by the Liberal Democrats, who wanted to raise the money through income tax—a move that would clearly affect pensioner income from investments. Such income is exempted under the terms of the Bill, because the insurance charge falls only on the earnings of employees below pensionable age.

      667
      When, on behalf of a constituent, my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) raised the issue in correspondence with the Paymaster General last year, she replied:
      "The National Insurance scheme is a social scheme. Amongst other things, its purpose is to fund the payments of contributory benefits such as Retirement Pensions, widows' benefit and incapacity benefit."
      However, the provisions in the Bill are designed expressly to fund the health service. We have argued that the amount that the Bill will yield will greatly exceed the additional sum that the Government say they will give to the health service, but be that as it may. In my submission, the Paymaster General's argument against exempting men over the age of 65 from having to suffer employees' contributions does not wash in the case of a specific policy that is designed to fund the health service.
      In the letter to which I have referred, the Paymaster General says:
      "there is no comparable age restriction on employers contributions and the liability continues whilst the employee is working and earning over the threshold for paying contributions. I must point out that if the liability were removed, then younger people could be discriminated against and it could result in a situation whereby some employers may actively seek to recruit employees in this category."
      However, the amendment presents a useful opportunity to give a modest but significant incentive to employers to take on senior citizens as employees. By so doing, they would save themselves 1 per cent. of the employer's costs.
      Mr. Bercow: The hon. Member for Linlithgow (Mr. Dalyell) could be employed as a Minister.
      Mr. Chope: My hon. Friend mentions a Member of the House who is of retirement age, and who could be employed by the Government. The provision could indeed provide a modest saving for the Government and the parliamentary authorities, but, with respect to my hon. Friend, that is not the strongest argument for it. Many pensioners would like to have jobs but cannot get them. The amendment would enable them to say to an employer, "If you take me on your books, you will save 1 per cent. of payroll." It is a modest measure, and I hope that it will find favour with the Government and with the House.
      8.15 pm
      Dawn Primarolo: It seems that the Conservative party's clarion call at the next general election will be, "Force pensioners to work after 65 by making them cheaper to employ than anyone else in the labour force." That is the only point that we could possibly glean from that rather potty introduction to the amendments.
      The national insurance increases proposed in the Bill spread the burden of paying for the improvements in the health service that we all—or most of us—want as widely and fairly as possible across employees, employers and the self-employed. The amendments deal specifically with the contribution of employers, and propose that they pay a different national insurance contribution—even though the level of earnings is exactly the same—by using a definition of age. That proposal is made by a party that normally complains about increased complexities, form filling and difficulties in policing the borderline.
      668
      Under the proposal, an employer would pay a national insurance contribution of 12.8 per cent. on the earnings of a male employee aged 64, but in respect of a male employee aged, say, 65, the same employer would pay an 11.8 per cent. contribution on the same earnings. That appears neither logical nor fair, even when measured against the Opposition's apparent new objective of dealing with labour shortages in the British economy by forcing pensioners back into the labour market, even if they do not want to go.
      Mr. Chope: The Paymaster General thinks that the proposition is unfair, but in what way is it fair to require an employee aged 64 to pay the additional contribution, but not an employee aged 65?
      Dawn Primarolo: If the hon. Gentleman knew anything about the national insurance fund and the decisions that his Government took in 1995 on the movement in retirement ages and the complex link with the contributory system, he would understand exactly why such measures were introduced. If he was so concerned about the issue, why did he not deal with it when in government? Indeed, I think that he was even a Minister at one stage. As he well knows, under the agreement to phase in equality of age of retirement, the particular point that he identifies will move out of the system in respect of employees. However, he is in fact proposing that we add an extra layer of complexity to employers' national insurance rates.
      The amount of secondary class 1 national insurance that employers are liable to pay is based on the level of their employees' earnings. Introducing a different secondary rate that depends not only on employees' level of earnings but on their age adds a complexity that simply is not necessary. It does not follow that excluding pensioners from paying national insurance means that employers should not pay their extra 1 per cent. national insurance on the earnings.
      Under the existing structure of the national insurance fund, employers contribute at the same rate for all of their employees. The Bill maintains that principle. Employers recognise that it is in the interests of employers to have a healthy labour supply. They do not say, "Except when the person who is employed gets to 65, when we do not need to contribute to the health service through the national insurance system." Employers recognise that all their work force will benefit from the additional investment in the NHS.
      I do not believe that the amendments would make pensioners more attractive to recruit. Even after the 1 per cent. increase in employers' national insurance, employers in the UK will still be paying less than employers in France and Germany towards their employees' health needs. Pensioners have demonstrated that they can, when they choose to and want to, compete in the labour market on equal terms and be judged on their skills and the experience that they offer the employer.
      There is absolutely no basis in logic for saying that the employer has a lesser obligation to the contributions to the national insurance system simply because of the age of the employee. I ask the House to reject the amendment, not only because it would introduce complexity for employers, but simply because it is extraordinarily naive and wrong in the distinction it seeks to make about the obligations that employers have to employees, regardless of their age.
      Matthew Taylor: These amendments are possibly the most bizarre of the evening. It is unclear why they have been tabled. Probably the original thought was that pensioners were exempted from national insurance, so perhaps employees should not pay for pensioners. However, the employer is getting the benefit of the financial contribution that the pensioner makes. It is frankly insulting if the implication is that someone who happens to be of pensionable age is making less of a contribution to the employer and that, therefore, in effect, a subsidy has to be paid for their employment.
      Mr. Bercow: That is wrong-headed nonsense.
      Matthew Taylor: It is the only possible implication of the policy. Why else should there be such a differential?
      Alternatively, it may be that the Opposition believe that, in some sense, there is a need to pay a cash incentive to employers to seek to employ or to keep in employment pensioners. But that is also extraordinary; again, why should businesses not wish to employ pensioners if they can make a good contribution and wish to work with them? The only possible conclusion is that, in some sense, the Conservative party believes that pensioners are less able, simply because of their age, to make a good contribution to business. The Conservative party has failed to think it through, and the uncertainty with which the argument was advanced from the Conservative Front Bench rather reinforces me in that view.
      As we have made clear, Liberal Democrats would not have chosen employers' national insurance as our route for raising money for the NHS and we have explained the alternative mechanism. The amendment is an entirely unthought-through salami-slicer. It does not make sense, it does not add up, it is not helpful and I would be surprised were the Conservative party to press it to a vote.
      Mr. Mike Hancock: I thank my hon. Friend for giving way.
      Mr. Bercow: The hon. Gentleman has only just wandered in.
      Mr. Hancock: No, I have been listening to the hon. Gentleman for the last two hours on television, and riveting stuff it was. I ask my hon. Friend to allow Tory Front Benchers to intervene on him to clarify their position, or maybe to help them out of the hole into which they have dug themselves.
      Matthew Taylor: Conservative Front Benchers have popped up and down this evening with their usual gusto, but not on this issue. I did not intend to argue on this case for long, as it is poverty-stricken.
      On reflection, the Conservatives will regret tabling an amendment from which the only possible conclusion that can be drawn is that they believe that pensioners have to be subsidised to work in business. In the process, once again, they are denying the NHS an unquantified amount of money for doctors and nurses that those pensioners and everyone else in the country desperately want to see in the NHS.
      Mr. Chope: The hon. Gentleman says that he wishes to remove totally this new impost on employers. I have
      670
      tabled an amendment that would remove it from employers of people who are over pensionable age. He argues that those employers should have that impost. There is nothing consistent about his argument.
      I wish to refer to a letter that I received from an individual. It says:
      "My wife and I are still very busy with our little travel agency which is run as a limited company with our owning 100 per cent. of the shares. Although I am now 81 years old, I still work full-time as a director of the company. Unfortunately, I find that the company is paying an NHS surcharge on my salary which is a burden in these difficult trading times."
      The surcharge at the moment is 10 per cent.; under the Bill, it will go up to 11 per cent. That individual is aged 81 and his wife is of a similar age. As the company is 100 per cent. owned, he finds that the additional burden will be borne by him, as the owner of a company, in circumstances where, were he an employee, he would not have to pay the new contribution. That is the principle.
      Once again, we on the Conservative Benches are arguing for the small business person who is working and serving this country by working beyond pensionable age. The Government have made the spurious argument that the amendment will introduce extra complexity. However, the amendment seeks not to extend that complexity to those who are employed beyond the age of 65.
      The amendment is a modest measure and I am disappointed by the Paymaster General's negative response. The weakness of her argument has reconfirmed for me the strength of the message that we are sending. I am sure that we will wish to return to this as an increasing number of pensioners ask why employers should be penalised for the fact that they are on the books of employers and are of pensionable age. Should they not have a similar benefit to those who are employees of pensionable age?
      This is an important issue of principle that is well worth putting to the vote and testing the mood of the House on. I hope that the Government will, in due course, accept our arguments even though they have not done so this evening. Certainly nothing in this amendment will try to force people to work after the age of 65, although as a result of the increases in council tax, an increasing number of pensioners are finding that they do have to work after 65 to pay those taxes.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 123, Noes 337.

      Division No. 257]

      [8.29 pm

      AYES

      Amess, David

      Clifton-Brown, Geoffrey

      Atkinson, Peter (Hexham)

      Collins, Tim

      Bacon, Richard

      Conway, Derek

      Barker, Gregory

      Cormack, Sir Patrick

      Baron, John

      Cran, James

      Bellingham, Henry

      Davies, Quentin (Grantham)

      Bercow, John

      Davis, Rt Hon David (Haltemprice)

      Beresford, Sir Paul

      Dorrell, Rt Hon Stephen

      Blunt, Crispin

      Duncan, Peter (Galloway)

      Boswell, Tim

      Fabricant, Michael

      Bottomley, Rt Hon Virginia

      Fallon, Michael

      Brady, Graham

      Field, Mark (Cities of London)

      Browning, Mrs Angela

      Flook, Adrian

      Burns, Simon

      Forth, Rt Hon Eric

      Burnside, David

      Fox, Dr Liam

      Cameron, David

      Francois, Mark

      Chope, Christopher

      Garnier, Edward

      671

      Gibb, Nick

      O'Brien, Stephen (Eddisbury)

      Gillan, Mrs Cheryl

      Osborne, George (Tatton)

      Goodman, Paul

      Page, Richard

      Gray, James

      Paice, James

      Grayling, Chris

      Pickles, Eric

      Green, Damian (Ashford)

      Prisk, Mark

      Greenway, John

      Randall, John

      Grieve, Dominic

      Redwood, Rt Hon John

      Gummer, Rt Hon John

      Robathan, Andrew

      Hammond, Philip

      Robertson, Hugh (Faversham)

      Hawkins, Nick

      Robertson, Laurence (Tewk'b'ry)

      Hayes, John

      Roe, Mrs Marion

      Heathcoat-Amory, Rt Hon David

      Ruffley, David

      Hendry, Charles

      Sayeed, Jonathan

      Hoban, Mark

      Selous, Andrew

      Hogg, Rt Hon Douglas

      Simmonds, Mark

      Horam, John

      Simpson, Keith (Mid-Norfolk)

      Howarth, Gerald (Aldershot)

      Soames, Nicholas

      Jack, Rt Hon Michael

      Spelman, Mrs Caroline

      Johnson, Boris (Henley)

      Spicer, Sir Michael

      Key, Robert

      Spring, Richard

      Kirkbride, Miss Julie

      Stanley, Rt Hon Sir John

      Laing, Mrs Eleanor

      Steen, Anthony

      Lait, Mrs Jacqui

      Streeter, Gary

      Lansley, Andrew

      Swire, Hugo

      Letwin, Oliver

      Syms, Robert

      Lewis, Dr Julian (New Forest E)

      Tapsell, Sir Peter

      Liddell-Grainger, Ian

      Taylor, John (Solihull)

      Lidington, David

      Taylor, Sir Teddy

      Tredinnick, David

      Loughton, Tim

      Turner, Andrew (Isle of Wight)

      Luff, Peter

      Tyrie, Andrew

      McIntosh, Miss Anne

      Walter, Robert

      MacKay, Rt Hon Andrew

      Waterson, Nigel

      Maclean, Rt Hon David

      Watkinson, Angela

      McLoughlin, Patrick

      Whittingdale, John

      Malins, Humfrey

      Widdecombe, Rt Hon Miss Ann

      Maples, John

      Wiggin, Bill

      Mates, Michael

      Willetts, David

      Maude, Rt Hon Francis

      Winterton, Mrs Ann (Congleton)

      Mawhinney, Rt Hon Sir Brian

      Winterton, Nicholas (Macclesfield)

      May, Mrs Theresa

      Yeo, Tim

      Mercer, Patrick

      Young, Rt Hon Sir George

      Mitchell, Andrew (Sutton Coldfield)

      Moss, Malcolm

      Tellers for the Ayes:

      Murrison, Dr Andrew

      Mr. Desmond Swayne and

      Norman, Archie

      Mr. Julian Brazier.

      NOES

      Adams, Mrs Irene (Paisley N)

      Bradley, Peter (The Wrekin)

      Ainger, Nick

      Bradshaw, Ben

      Ainsworth, Bob (Cov'try NE)

      Brake, Tom

      Allen, Graham

      Breed, Colin

      Anderson, Janet (Rossendale)

      Brennan, Kevin

      Armstrong, Rt Hon Ms Hilary

      Brooke, Mrs Annette L

      Atkins, Charlotte

      Brown, Russell (Dumfries)

      Austin, John

      Bruce, Malcolm

      Bailey, Adrian

      Bryant, Chris

      Baird, Vera

      Buck, Ms Karen

      Baker, Norman

      Burden, Richard

      Banks, Tony

      Burnett, John

      Barnes, Harry

      Burnham, Andy

      Barrett, John

      Burstow, Paul

      Barron, Kevin

      Cable, Dr Vincent

      Battle, John

      Cairns, David

      Beard, Nigel

      Calton, Mrs Patsy

      Beith, Rt Hon A J

      Campbell, Alan (Tynemouth)

      Benn, Hilary

      Campbell, Mrs Anne (C'bridge)

      Bennett, Andrew

      Campbell, Rt Hon Menzies (NE Fife)

      Benton, Joe

      Betts, Clive

      Campbell, Ronnie (Blyth V)

      Blackman, Liz

      Carmichael, Alistair

      Blears, Ms Hazel

      Casale, Roger

      Blizzard, Bob

      Caton, Martin

      Boateng, Rt Hon Paul

      Cawsey, Ian

      Bradley, Rt Hon Keith (Withington)

      Challen, Colin

      672

      Chapman, Ben (Wirral S)

      Hall, Mike (Weaver Vale)

      Chidgey, David

      Hamilton, David (Midlothian)

      Clapham, Michael

      Hamilton, Fabian (Leeds NE)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Hancock, Mike

      Hanson, David

      Clark, Paul (Gillingham)

      Harris, Dr Evan (Oxford W)

      Clarke, Rt Hon Tom (Coatbridge)

      Harris, Tom (Glasgow Cathcart)

      Clarke, Tony (Northampton S)

      Harvey, Nick

      Clelland, David

      Healey, John

      Clwyd, Ann

      Heath, David

      Coaker, Vernon

      Henderson, Doug (Newcastle N)

      Coffey, Ms Ann

      Henderson, Ivan (Harwich)

      Cohen, Harry

      Hendrick, Mark

      Coleman, Iain

      Hepburn, Stephen

      Connarty, Michael

      Heppell, John

      Cook, Frank (Stockton N)

      Heyes, David

      Cook, Rt Hon Robin (Livingston)

      Hill, Keith

      Corbyn, Jeremy

      Hinchliffe, David

      Corston, Jean

      Hodge, Margaret

      Cotter, Brian

      Hoey, Kate

      Cox, Tom

      Holmes, Paul

      Cruddas, Jon

      Hood, Jimmy

      Cryer, John (Hornchurch)

      Hope, Phil

      Cummings, John

      Hopkins, Kelvin

      Cunningham, Jim (Cov'try S)

      Howarth, Rt Hon Alan (Newport E)

      Cunningham, Tony (Workington)

      Howarth, George (Knowsley N)

      Dalyell, Tam

      Howells, Dr Kim

      Davey, Edward (Kingston)

      Hughes, Simon (Southwark N)

      Davey, Valerie (Bristol W)

      Humble, Mrs Joan

      Davidson, Ian

      Hurst, Alan

      Davies, Rt Hon Denzil (Llanelli)

      Iddon, Dr Brian

      Davies, Geraint (Croydon C)

      Illsley, Eric

      Dawson, Hilton

      Ingram, Rt Hon Adam

      Dean, Mrs Janet

      Irranca-Davies, Huw

      Denham, Rt Hon John

      Jackson, Glenda (Hampstead)

      Dismore, Andrew

      Jamieson, David

      Dobbin, Jim

      Jenkins, Brian

      Dobson, Rt Hon Frank

      Johnson, Alan (Hull W & Hessle)

      Donohoe, Brian H

      Johnson, Miss Melanie (Welwyn Hatfield)

      Doran, Frank

      Doughty, Sue

      Jones, Helen (Warrington N)

      Dowd, Jim

      Jones, Jon Owen (Cardiff C)

      Drew, David

      Jones, Kevan (N Durham)

      Drown, Ms Julia

      Jones, Martyn (Clwyd S)

      Eagle, Angela (Wallasey)

      Joyce, Eric

      Eagle, Maria (L'pool Garston)

      Kaufman, Rt Hon Gerald

      Edwards, Huw

      Keen, Alan (Feltham & Heston)

      Efford, Clive

      Keen, Ann (Brentford & Isleworth)

      Ellman, Mrs Louise

      Kemp, Fraser

      Ewing, Annabelle

      Khabra, Piara S

      Farrelly, Paul

      Kidney, David

      Field, Rt Hon Frank (Birkenhead)

      Kilfoyle, Peter

      Fisher, Mark

      King, Ms Oona (Bethnal Green)

      Fitzsimons, Mrs Lorna

      Kirkwood, Archy

      Flint, Caroline

      Knight, Jim (S Dorset)

      Flynn, Paul

      Kumar, Dr Ashok

      Follett, Barbara

      Lamb, Norman

      Foster, Rt Hon Derek

      Lammy, David

      Foster, Don (Bath)

      Laws, David

      Foster, Michael (Worcester)

      Lazarowicz, Mark

      Foster, Michael Jabez (Hastings)

      Leslie, Christopher

      Foulkes, George

      Levitt, Tom

      Francis, Dr Hywel

      Lewis, Ivan (Bury S)

      Galloway, George

      Liddell, Rt Hon Mrs Helen

      Gapes, Mike

      Lloyd, Tony

      Gardiner, Barry

      Love, Andrew

      George, Andrew (St Ives)

      Lucas, Ian

      Gerrard, Neil

      Luke, Iain

      Gibson, Dr Ian

      Lyons, John

      Gidley, Sandra

      McCabe, Stephen

      Gilroy, Linda

      McCafferty, Chris

      Godsiff, Roger

      McDonagh, Siobhain

      Goggins, Paul

      McFall, John

      Griffiths, Jane (Reading E)

      McGuire, Mrs Anne

      Griffiths, Win (Bridgend)

      McIsaac, Shona

      Grogan, John

      McKechin, Ann

      673

      McKenna, Rosemary

      Sedgemore, Brian

      McNamara, Kevin

      Sheridan, Jim

      McNulty, Tony

      Shipley, Ms Debra

      MacShane, Denis

      Short, Rt Hon Clare

      Mactaggart, Fiona

      Simon, Siôn

      McWalter, Tony

      Simpson, Alan (Nottingham S)

      Mahmood, Khalid

      Singh, Marsha

      Mahon, Mrs Alice

      Skinner, Dennis

      Mallaber, Judy

      Smith, Angela (Basildon)

      Mann, John

      Smith, Jacqui (Redditch)

      Marris, Rob

      Smith, John (Glamorgan)

      Marsden, Gordon (Blackpool S)

      Smith, Llew (Blaenau Gwent)

      Marshall-Andrews, Robert

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

      Martlew, Eric

      Soley, Clive

      Meacher, Rt Hon Michael

      Southworth, Helen

      Miliband, David

      Starkey, Dr Phyllis

      Miller, Andrew

      Steinberg, Gerry

      Moffatt, Laura

      Stevenson, George

      Moonie, Dr Lewis

      Stewart, David (Inverness E)

      Moore, Michael

      Stewart, Ian (Eccles)

      Moran, Margaret

      Stinchcombe, Paul

      Mountford, Kali

      Stoate, Dr Howard

      Mullin, Chris

      Strang, Rt Hon Dr Gavin

      Munn, Ms Meg

      Stringer, Graham

      Murphy, Denis (Wansbeck)

      Stuart, Ms Gisela

      Murphy, Jim (Eastwood)

      Stunell, Andrew

      Naysmith, Dr Doug

      Sutcliffe, Gerry

      Oaten, Mark

      Taylor, Ms Dari (Stockton S)

      O'Brien, Mike (N Warks)

      Thomas, Gareth R (Harrow W)

      O'Neill, Martin

      Thomas, Simon (Ceredigion)

      Organ, Diana

      Thurso, John

      Palmer, Dr Nick

      Timms, Stephen

      Pearson, Ian

      Tipping, Paddy

      Perham, Linda

      Todd, Mark

      Picking, Anne

      Tonge, Dr Jenny

      Pickthall, Colin

      Trickett, Jon

      Pike, Peter

      Truswell, Paul

      Plaskitt, James

      Turner, Dennis (Wolverh'ton SE)

      Pollard, Kerry

      Turner, Dr Desmond (Kemptown)

      Pond, Chris

      Twigg, Derek (Halton)

      Pope, Greg

      Twigg, Stephen (Enfield)

      Pound, Stephen

      Vis, Dr Rudi

      Prentice, Ms Bridget (Lewisham E)

      Walley, Ms Joan

      Prentice, Gordon (Pendle)

      Ward, Ms Claire

      Prescott, Rt Hon John

      Wareing, Robert N

      Price, Adam

      Watts, David

      Primarolo, Dawn

      Webb, Steve

      Prosser, Gwyn

      Weir, Michael

      Pugh, Dr John

      Whitehead, Dr Alan

      Purchase, Ken

      Williams, Rt Hon Alan (Swansea W)

      Purnell, James

      Quinn, Lawrie

      Williams, Hywel (Caernarfon)

      Rammell, Bill

      Willis, Phil

      Rapson, Syd

      Wills, Michael

      Reed, Andy (Loughborough)

      Winnick, David

      Reid, Alan (Argyll & Bute)

      Winterton, Ms Rosie (Doncaster C)

      Rendel, David

      Wishart, Pete

      Roche, Mrs Barbara

      Wood, Mike

      Rooney, Terry

      Woodward, Shaun

      Ross, Ernie

      Woolas, Phil

      Roy, Frank

      Worthington, Tony

      Ruddock, Joan

      Wray, James

      Russell, Bob (Colchester)

      Wright, David (Telford)

      Ryan, Joan

      Wright, Tony (Cannock)

      Salmond, Alex

      Younger-Ross, Richard

      Salter, Martin

      Sanders, Adrian

      Tellers for the Noes:

      Savidge, Malcolm

      Mr. Ivor Caplin and

      Sawford, Phil

      Jim Fitzpatrick.

      Question according negatived.
      It being after 8.30 pm, THE CHAIRMAN, pursuant to Order [13 May], put forthwith the Questions necessary for the disposal of the business to be concluded at that hour.
      Clauses 2 to 8 ordered to stand part of the Bill.

    Schedule 1

      CONSEQUENTIAL AMENDMENTS
      Amendment made: No. 14, in page 11, line 43, at end insert—
      '(4) In subsection (6), for "subsection (5)" substitute "subsections (5) and (5A)".'.—[Dawn Primarolo.]
      Schedule 1, as amended, ordered to be the First schedule to the Bill.
      Schedule 2 ordered to be the Second schedule to the Bill.
      Bill reported, with amendments.
      Order for Third Reading read.
      8.44 pm
      Dawn Primarolo: We have had a very good, interesting debate in which the House has explored in detail the Government's plans to use the national insurance fund to raise additional resources for the health service. In one way, the Bill is unprecedented, unlike previous changes to national insurance contributions, which have been linked to changes in the state of the national insurance fund. This Bill increases contributions for the other great pillar of the welfare state—the national health service. In another way, however, it is not new at all. Ever since the post-war Labour Government introduced the national insurance system and the national health service, part of the funding for the NHS has come from national insurance contributions.
      National insurance contributions are paid by those who work and by their employers. Everyone who has a stake in the national health service will contribute while they are in work, when they can best afford it, and everyone has an interest in the improvements in the health service that this extra money for investment will deliver.
      Let me remind the House of the scale of new investment that we have promised. The plans announced in the Budget represented the biggest ever increase in investment in the national health service, raising spending on average by 7.4 per cent. in real terms in each of the next five years. United Kingdom health spending will grow from £65.4 billion this year to £105.6 billion in 2007–08. Since 1997, health service investment has already doubled in real terms, and it will increase as a share of national income from 6.7 per cent. in 1997 and 7.7 per cent this year to 9.4 per cent. in 2007–08. That will mean 35,000 more nurses, midwives and health visitors, 15,000 more doctors and consultants and 42 major hospital schemes—real changes and improvements, giving the people of this country a standard of health care that they can be proud of.
      The Government have also published plans to ensure that the public and the House can judge whether those improvements are being delivered. There will be independent audit, inspection and scrutiny of patient complaints, with a duty to account for money spent and standards achieved and to report to the public.
      In future, an annual report to Parliament will be prepared by the new independent auditor, accounting for the money allocated to the national health service, stating where it has been spent and the results that have been achieved. There will also be local reports from every primary care trust that will spell out to each household in its locality the services available and the value for money that is being achieved.

      675
      The Bill is simple and transparent. We have increased the rates of national insurance contributions for employers, employees and the self-employed by one percentage point. For employers and the self-employed, whose contributions are currently limited by the upper earnings limit and the upper profits limit, we have ensured that the burden is spread fairly, by applying the additional 1 per cent. to all earnings, including those above the limit.
      We have also ensured that the national health service gets the benefit of the additional revenue by increasing the proportion of the national insurance contributions earmarked for the NHS by an equivalent amount. The Bill ensures that none of the changes will disturb existing arrangements for determining entitlement to contributory benefits or for the financing of contracted out, personal or occupational pension schemes.
      Much of the debate that we have had on the Bill would have sounded familiar to those involved in the introduction of national insurance in the 1940s. We have heard a lot about the supposed unfairness of making employers pay a share of the cost of improving the health service. In response, the Government have quoted the CBI, which said that time off for sickness costs British industry some £10 billion a year.
      We might as well have also quoted the Beveridge report, which said in 1942:
      "Disease and accidents must be paid for in any case, in lessened power of production and in idleness, if not direct by insurance benefits."
      I certainly echo the words of the then Minister of National Insurance, James Griffiths, who said during the debates on the National Insurance Bill:
      "I have no hesitation in saying—I have said it before outside and I will say it now in the House—this scheme"—
      the national insurance scheme—
      "is the best and cheapest insurance policy ever offered to the British people, or to any people anywhere".—[Official Report, 6 February 1946; Vol. 418, c. 1751.]
      The Chancellor of the Exchequer made similar comments during his Budget speech when he introduced the principle of using national insurance contributions as a way of raising money for the national health service.
      The Bill shows that the Government are not afraid to be honest about what needs to be done to improve the health service and about the need to pay for it. The public appreciate that and have shown by their reactions to my right hon. Friend's Budget that they are willing to trust us to do what we have promised. The Bill is the first step and I commend it to the House.
      8.51 pm
      Mr. Chope: The Bill has been debated in the House on repeated occasions during the past few weeks. It appears to be almost a dialogue of the deaf. On the Opposition Benches, we are alone in saying that throwing more money at the national health service is no guarantee that there will be a better service. The Government have said on other occasions that they would put extra taxpayers' money into public services and that there would be public service agreements to ensure that that expenditure was worth while, yet they have not fulfilled those promises.
      676
      In 1999, the then Chief Secretary to the Treasury, now the Secretary of State for Health—I congratulate the new Chief Secretary on his elevation to the Cabinet—said:
      "We have fulfilled our commitment to publish Public Service Agreements covering all the public services. They set out the concrete improvements to be delivered in return for the extra investment we are making."—[Official Report, 24 June 1999; Vol. 333, c. 458W.]
      However, the Paymaster General has just told us that we are starting again. We are forgetting about the three years that have passed since that commitment was made and there will be a fresh start. The Government tell us that—after more legislation—a fresh monitoring process will be set up and that in a few years we shall be able to see whether it has delivered any benefits in terms of better health care for the people of our nation.
      We know that many of the new improvements—the extra nurses, doctors, hospitals and primary care centres about which the Secretary of State for Health tells us—are not even expected until 2008. We know that the Secretary of State merely hopes that legislation to establish the commissions for health care, audit and inspection will be introduced during the next Session, and that the first inspection report is unlikely to materialise before 2005. That is before we shall even know whether the extra billions of pounds taken in the higher taxes that the Government said they would never introduce have been well invested.
      The Government, far from being unafraid to be honest about what must be done, as the Paymaster General claimed in her speech, failed to face up to the truth at the general election. They realised that they would have to put up taxes. They needed to put up taxes but denied that they would do so, and they specifically denied that they would increase national insurance contributions.
      We shall continue to cite against the Secretary of State for Trade and Industry her comments on the "Powerhouse" programme on 29 May 2001. She said:
      "We've got no plans at all to raise that ceiling on National Insurance contributions."
      We have not received an apology for that gross inaccuracy from a senior member of the Government who was trying to persuade people to vote for her party during the general election campaign. The Paymaster General has the gall to tell the House that the Government are not afraid to be honest about what has to be done. That is just laughable. The Government disguised the truth from the electorate at the general election. We tried to expose the fallacy in the Government's thinking. Sadly, the people did not realise that our predictions were correct. We are now landed with what is, in effect, emergency legislation, introduced to raise national insurance contributions to fund the health service and to try to make improvements.
      A host of Audit Commission reports, all of which are set out on the internet—some 10 or 12 of them have been issued in the past 18 months—contain recommendations on what should be done to improve the efficiency of our health service. What has been done to implement those recommendations? Of course the Government may be embarrassed by the fact that the Audit Commission has been so effective in probing in the past, but the trouble is that the Government have not followed those recommendations.
      What prospect is there that some new commission will investigate all these things and that somehow everything will be better in future? The Government do not even

      677
      apply the recommendations proposed by their own audit body, and we have many examples of that. A new development since Second Reading is the Bank of England's May 2002 inflation report, page 28 of which states:
      "the cost of higher employer and employee contributions will ultimately be borne by employees."
      That is very different from the story that the Government have put about that the burden will be shared by employers and employees, as though they can be separated. The national insurance increase represents an additional impost on the British economy and our competitiveness. As a result, it will damage our economy.
      As the Bank of England says, if the burden were not ultimately borne by employees,
      "firms would reduce their demand for labour in the face of a higher real product wage, leading to a temporarily lower level of employment and downward pressure on wage growth until equilibrium was restored. In the shorter term, however, the impact will depend on whether and the degree to which employees resist lower growth in their take-home pay."
      The Bank of England says in its report that it is too early to say what the effects will be because we will have to see what happens in the marketplace, but it is obviously anxious that there will be inflationary pressure in the economy, fuelled by the increase in national insurance contributions for employers and employees.
      I certainly have not seen any evidence in recent weeks that employees are saying, "Yes, I don't mind taking a cut in my take-home pay so money can go to the health service." I have not heard people who work in the NHS, the social services or the police, or head teachers say, "I'm looking forward to a reduction in my take-home pay, so more can be put into the health service."
      People, especially those in the public sector, seem to be telling the Government, "Give us some extra money to compensate us for the additional national insurance tax, and we'll be content." Indeed, pay demands in the public sector are escalating frighteningly. Obviously, the demands from the fire service are the most prominent at the moment. The Government are fuelling that inflationary pressure by their actions in the Bill. That is why the Bank of England reported as it did in May. I hope that the Paymaster General will say in winding up the debate what she and the Government think of the Bank of England's observations. What the Bank of England has said is echoed by employers and employers' organisations up and down the land.
      People working in the public sector and local authorities, as employers, are saying that they will have to pay extra because of the Bill. Will they be compensated? The only way that they can be compensated is with extra public money, again raised from taxes. So we have the spiral that we have seen so often under Labour Governments of increasing taxes to fund public sector organisations, which, in turn, have to spend a lot of money on additional employer costs rather than being able to put that money into better-quality services.
      We are therefore extremely sceptical about the value of this Bill. The evidence of the Government's own experts is that, in England alone, waste and fraud in the national health service is of the order of £7 billion to £10 billion every year. We are amazed at the arrogance of a Government who, when faced with that evidence, rather than sort out that fraud and waste and improve the health
      678
      service, come along to the taxpayer and the person paying national insurance contributions and say, "We are not going to sort out the fraud and waste, but we do expect you to make an additional contribution, and it will be all right in the end." That is not the way to run a Government in the thriving, competitive economy inherited from the Conservative Government. The Bank of England report makes the position clear:
      "In the shorter term…the impact will depend on whether and the degree to which employees resist lower growth in their take-home pay."
      In the longer term, however, the damage to the competitiveness of this country will be obvious. That is why people who are concerned about the future of our country are worried about this Bill and the additional taxation that it involves.
      The Government did not go into the last general election saying, "We are going to increase taxes. These are the arguments for increasing them. Although we said in 1997 that there are only 24 hours to save the national health service, and we can save it without increasing taxes, we now realise, after four years, that we got it all wrong." What they are saying is, "Oh, now that the general election is behind us, we will increase taxes by stealth as much as we can. People will now have to see those tax rises." The Paymaster General has not heard the last of this. Next year, when people see the impact of this Bill in their pay packets, they will say, "What have we got in return? The health service has not been reformed, and the Government have once again broken their promises. They have put forward a proposition that has not been borne out in reality." That is why experts from the left and the right, from employers' and employees' organisations, are very worried about the Bill.
      The Bill is best summed up as having been born out of a broken general election promise. The Government went back on what they said during the climate change levy debate—that imposing increases in employers' national insurance contributions was bad, which is why they made a virtue of reducing the burden on employers' national insurance. They have now abandoned that argument altogether. They have broken their promises and they are facing the country with additional taxes that we can ill afford.
      That is why we shall vote against the Bill this evening—it will not deliver the improvements in the health service that we want, it will damage the economy, and it will raise taxes from people who are already being put under severe pressure as a result of stealth taxes introduced by the Government.
      Mr. Pound: I hope that the hon. Gentleman will understand me when I say that I do not mean to be presumptuous, but to my mind his dire prognostications for the United Kingdom economy echo precisely the comments that were made from the Conservative Benches about the national minimum wage. The Conservative party was wrong then. Why should we believe it tonight?
      Mr. Chope: I am not making any dire prognostications about the economy. All I am saying is that, each time the Government increase the burden of taxation, they make our economy less competitive. The process occurs gradually—a point that is flagged up in the inflation report produced by the Bank of England. I do not know whether

      679
      the hon. Gentleman had the chance to read the Bank of England's inflation report of May 2002 during his recent two-week break in his constituency, but I commend it to him. It shows that the Bank of England is on the ball and realises what is happening, even if the Government are not prepared to face up to its criticism.
      We will see the consequences over a period of time. We will not see much immediately, because the national insurance contribution increases will not come in until next year. However, when people get their pay packets next year, they will see exactly the high costs that they are paying and, over time after that we will see the damage that the Government have done to the economy.
      9.5 pm
      Dr. Evan Harris: The Liberal Democrats' support for the Bill is based on reasons opposite to the Conservative party's reasons for opposing it: we support the increase in funding for the health service. The health service and social services desperately need extra funding, and that has to be welcomed.
      We are not entirely happy with the precise way in which the funding is to be raised. For the reasons that have been outlined in the debate, we have made it clear that we would rather have an increase in the top rate of income tax on incomes of more than £100,000 and not an increase in employers' national insurance contributions. Such an increase will impose a burden on businesses that are struggling to cope with a strong pound and the difficulties of exporting.
      The Government have previously recognised that taxing employers for employment is a negative approach. As the hon. Member for Christchurch (Mr. Chope) said, when we debated the climate change levy in 1999, the Government said that they wanted to reduce tax on good things such as employment. Although we support the extra funding and support raising the extra money through taxation on income, we are not happy about raising the money from businesses. However, the NHS is so desperate for the increase that we will not take the position that it should not receive any extra funding at all. Unlike the Conservatives, we do not want to defend a view that means that there would be no extra money, or a cut in the growth in funding. We are therefore prepared for the money to be raised in the way suggested in the Bill.
      Mr. Bercow: Goodness gracious. I never thought I could be taken aback by a contribution from a Liberal Democrat Member. However, on this occasion, the hon. Member for Oxford, West and Abingdon (Dr. Harris) has confounded me. In the light of what he has just said about how the Liberal Democrats opposed the increase in national insurance contributions, did not want it to happen and tried to stop it but are prepared to support a Bill whose principal element is such an increase, is he surprised that the Liberal Democrats are regarded as two-timing, fence-sitting, unprincipled political chameleons?
      Dr. Harris: When the hon. Gentleman grows up, he will know that grown-up politics is about making choices that are not necessarily in one's hands. He must understand that a mature attitude to politics involves saying that this is what we would like to happen, but that
      680
      we have a second-best option if it cannot happen. For us, the second-best option is to raise money partly through employers' national insurance contributions even though we are concerned about that.
      Our top priority—the hon. Gentleman will rue the fact that the Conservative party does not recognise this—is public investment in the public services. Although we accept that they need changes and reform, they fundamentally need resources, and we are prepared to accept tax changes that we would not otherwise have supported because that is such an important priority. That is nothing new and, if the hon. Gentleman is dumbfounded by that approach, he will have a dumbfounded political career.
      We are critical of the way in which the Government have governed the health service and their history of investment in it. The investment has arrived five years later than it should have done under a Labour Government and five years later than people expected when they voted in 1997 for a party that said that it would save the NHS as soon as it was elected.
      Let us consider how much the Labour party has put into the health service in those years and compare that with what the Government are proposing now. On Second Reading, I invited the Paymaster General to specify by how much social services spending—adjusted for special transitional grant, community care arrangements and population changes—had increased between 1997 and 1999, because the figures for 1997–98 and 1998–99 are missing from the Wanless report. She did not answer that question, but a Library paper clearly states the percentage changes. In 1995–96, under the Tories, it was minus 2.9 per cent.—a real terms cut in funding to social services for the vulnerable. In 1996–97, again under the Conservatives, it was minus 1.8 per cent. In 1997–98, under Labour—despite "24 hours to save the NHS"—the change in real-terms spending, adjusted for special transitional grant and population changes, was minus 2.7 per cent. In 1998–99, it was minus 2 per cent.
      So after years of Tory underfunding, when many social services departments could not take any more, they got another hit from the Labour Government from which many, including the social services department in Oxfordshire, have not recovered. Five years later, we have the opportunity to give social services departments, as well as the health service, the funding that they need. However, we do not believe that the Government will adequately allocate the funding provided by the Bill into social services. It is clear from returns from social services departments around the country that they are more than £200 million overspent on their budgets. The Government may say that that is tough and that they should simply cut £200 million from caring for the elderly, the mentally ill, the disabled or the vulnerable young and children in care. Many are having to do that. However, as the bulk of their funding comes from central Government, central Government will have to account for that.
      On top of that, there is a £1 billion gap between what the Government say social services departments should be spending—the standard spending assessment—and what they are spending. That is £1 billion taken from other services and from steep rises in council tax, which is a more regressive tax than that proposed in the Bill. Before considering tackling the problems of delayed discharges and the underprovision of funding to deal with the crisis in care for the elderly and for children, the Government

      681
      should deal with the £218 million overspend and the £1 billion reality gap between what social services departments are having to pay and what the Government say they should be spending. The Government are giving a welcome few hundred million pounds to tackle the issue of delayed discharges, but that in itself will not be enough.
      As the hon. Member for Christchurch said, there are questions to be asked about how well funding for the health service is being spent, and it is right that we should ask those questions. There are false economies in three areas, for which the Government must take some responsibility. I hope that the new Chief Secretary, who is in charge of public service agreements for spending Departments, will ask the Department of Health to explain how huge amounts of NHS capacity can be lost because of delayed discharges. If funding was made available to social services departments and, indirectly, to the private health care sector, we could at a stroke release significant amounts of capacity—much more quickly than by training more nurses to open more beds, as we need to do and are doing.
      John Mann: The hon. Gentleman may care to visit my constituency to see what a Labour county council can do. I am perplexed by his prognosis on cuts. Where does the money come from for the 20 brand new intermediate care beds that were opened last year in my constituency? Where does the money come from for the 20 or more additional intermediate care beds at an alternative site that is being developed in my constituency? Is that the difference between the prioritising of a Labour county council and that of his county council?
      Dr. Harris: Oxfordshire county council has been subject to cuts under Liberal Democrat-Labour administrations, Labour-Conservative administrations and Conservative-Liberal Democrat administrations. I have never criticised those administrations in the House, even when my party was not involved. All local politicians recognise that without central funding to ensure that services grow, let alone remain the same, we let down the most vulnerable in society.
      The hon. Gentleman should look at the figures on delayed discharges, especially for areas outside his constituency, with its ministerial visits. I am delighted that a few more beds have been provided in his area. I suspect, however, that he does not issue a press release every time a private care home bed closes there. What we have is closure by stealth and announcements by acclamation. I am happy to visit Bassetlaw to see what is happening there, and I urge him to come to Oxfordshire where councillors of all parties are in despair at the cuts. I suspect he does not want to come—see no evil, hear no evil, speak no evil. Nevertheless, the cuts are taking place in many authorities, including some that are Labour run.
      The second false economy is the cost of employing agency staff. The Chief Secretary and I know that the problems of health service staffing, including under-recruitment and under-training, are predominantly the fault of Conservative Administrations and have been inherited. None the less, the fact that the investment was not provided as early as it should have been has meant that the problem of paying agency staff over the odds remains because of a shortage of established posts in the NHS. That has cost a huge amount of money that need not have been spent. Indeed, we could he five years into a significant increase in funding.
      682
      The third false economy is the use of the private sector as a short-term measure. Some people are getting their operations quicker than would otherwise be the case, but in terms of value for money, the Chief Secretary must understand that it is highly likely that spot contracts, the costs of which are usually kept secret because of commercial sensitivity, are more expensive than releasing the capacity in the health service to tackle delayed discharges. We have to consider whether the money raised from an increase in NICs will simply be chucked away as we pay over the odds in secret contracts with the private sector. Even when private firms bid for contracts, they do not bear the same overheads as the NHS, which provides almost all the training and research. It is the only market for contracts in which one competitor trains the staff of its leading competitor, which has to bear none of the overheads. The time must come when we impose a training levy on private sector employers to pay back the costs to the NHS of training those staff.
      The Government did not announce before the election that the increase would be needed. To some extent, I agree with the hon. Member for Christchurch on this. He said that the Labour party failed at the election to recognise the truth that taxes would have to rise to pay for the health service. On that basis, the Conservatives also failed to recognise the truth, although they would say that taxes do not need to rise to pay for the health service, and we discussed how they would pay for everything that is needed.
      On Second Reading, I asked the Chief Secretary's predecessor why, as No. 2 to the Chancellor, he could not forecast that a year after the election he would be raising taxes in such a significant way through national insurance contributions. He did not answer, but the hon. Member for Christchurch kindly put the point to him again in summation, for which I am grateful. He said:
      "At that time"—
      during the general election—
      "no one was much closer to the Chancellor of the Exchequer than the Chief Secretary. Earlier in the debate, the hon. Member for Oxford, West and Abingdon (Dr. Harris) challenged the Chief Secretary to deny that he knew a year ago that national insurance would have to be raised."—[Official Report, 13 May 2002; Vol. 388, c. 603.]
      The right hon. Member for Oxford, East (Mr. Smith) said that he had no such knowledge.
      The right hon. Gentleman is a man of his word—he is an hon. Member—and I am sure that that is true, but it worries me, as it should all hon. Members, that the second-in-command at the Treasury had such a poor grasp of the economic outlook and of Government receipts for public spending that he could not predict at the general election a year ago that taxes would have to increase in this way. I think that that is either frightening or that he was mistaken. I would be interested to know whether the post's current incumbent believes that it was reasonable for his predecessor to be out by a factor of a few billion pounds and in terms of significant tax changes within one year. Can he not look a year ahead?
      One aspect that has not been covered in our short debate is the complexity that the Bill produces in the tax regime. In an ideal world, we would have a simplified tax system that would make things more transparent, keep money from accountants and leave more money in taxpayers' pockets. We have a very complex tax system.

      683
      My hon. Friends have been proposing that simplification should be one of the Government's priorities. It is sad that the welcome resources that are to be raised by the measure are to be raised in such a complex way.
      We must consider how the Government will face the next election in terms of delivery. What worries me is that it will take a long time for the health service to produce the changes. I am worried for the patients who have to lie in pain awaiting their surgery, and I also worry that people will think that the extra resources that are going in so late were not sufficient to do the trick. Hon. Members should realise that even the resources that are going in now will take some time to work through to increased capacity. I am worried that the Government have been five years late, so that people will think in the next few years that the money is going in and will not allow enough time for improvement. In that respect, the Government are hoist with their own petard. They announced huge increases in 1997 and 1998, but the significant increases that we have seen recently were not made at that time. I think that the health service as a national service is more under threat now than at any other time as a result of the Government's complacency in terms of giving it the resources and reform that it needs.
      I fear that the Government will seek to blame anyone but themselves for their slowness to deliver. They will blame the hard-working staff in the health service, scapegoat a few hospitals that do not have sufficient capacity and seek to pick fights with the unions for opposing untested and unreasonable reforms, As we have heard, they will also seek to blame patients for not turning up. The reason why many patients do not turn up for appointments is that they are either already dead or in hospital. The idea of fine collectors wandering around cemeteries to try to fine patients for not turning up to appointments is beyond the pale.
      I hope that the Government will accept in humility some responsibility for the delay in delivery that their lateness in putting in the resources has caused. In supporting the Bill on Third Reading, it is right to let the Government know that the resources are welcome but that to date their record on managing the health service has not been good.
      9.23 pm
      Mr. Peter Luff: May I say what a privilege it is to see the new Chief Secretary to the Treasury in his place? I am sure that the right hon. Gentleman will be as robust in dealing with his colleagues in spending Departments as he is in dealing with sloppy arguments in Committee or on the Floor of the House. I wish his colleagues in those spending Departments well in their negotiations during the coming weeks and months.
      There are at least five reasons why the Bill should be resisted with absolute clarity and certainty. The first is the impact on the business sector. The second is the cost to the public sector. Thirdly, there is the cost to individual voters, who will pay the taxes directly or indirectly. Fourthly—this is very important—the Bill represents a massive broken promise by the Government. It should be a matter of considerable concern to the House that they have broken their promises as spectacularly as they have done by introducing the Bill. Finally, the Government are
      684
      simply proposing to pour money into the existing health system without seeking the reform of that system that is essential to ensure that it will use those additional resources effectively.
      To put it simply, in the past five years taxes have gone up and up, but as we all know, public services have got worse. The country deserves a great deal better, not more of the same. The Government have increased taxes with great abandon, but they are not addressing the problems in our health service with the open mind that they should have in dealing with such an important matter. I am particularly concerned that the Government seem so unprepared to learn lessons from other countries—lessons that Her Majesty's official Opposition are most anxious to learn.
      Let us look at the first of the reasons why the Bill should be resisted: the impact on businesses. Under the Labour Government businesses have been hit by higher taxes, and in particular by increased red tape and regulatory burdens. In my discussions with the south Worcestershire council of the Hereford and Worcester chamber of commerce shortly after the Budget, I learned just how concerned businesses were about the Bill, coming as it does on top of all the other burdens that they now have to bear.
      John Mann: What is those people's view on the reduction in corporation tax, and what is the hon. Gentleman's?
      Mr. Luff: As far as I know, they have no view on that matter—but in inviting me to express mine, the hon. Gentleman has anticipated my next remarks. In that tantalising intervention he alluded to the fact that the Chancellor claims to have cut business tax. He has announced—I think I have the litany right, but I am sure that the Chief Secretary will correct me if I get it wrong—a cut in small companies corporation tax rate from 20 to 19 per cent.; the exemption of companies from corporation tax on sales of substantial shareholdings; a reduction in the starting rate of corporation tax from 10 per cent. to zero; and a cut in capital gains tax to 20 per cent. for business assets held for one year and more, and to 10 per cent. for assets held for two years and more. Is that the sort of list that the hon. Member for Bassetlaw (John Mann) sought? [Interruption.] Obviously, the hon. Gentleman broadly agrees.
      That is all very well, but it is more of the smoke and mirrors—the spin—that we are used to from the Government, because the Chancellor's changes to employers' national insurance contributions will raise as much as a 3 per cent. rise in corporation tax. He gives a little with one hand and takes a great deal more back with the other. That is the fundamental point.
      Employers who pay national insurance contributions on all earnings above the threshold—that is frozen at £89 a week—face a rise from 11.8 to 12.8 per cent. That is a big increase, which more than makes up for all the good things in the Budget. The hon. Member for Bassetlaw is right—there were good things in the Budget.
      John Mann: Is it not the case that the main rate of corporation tax has been reduced by 3 per cent. and the rate for small companies by 4 per cent., which, with the changes in capital gains tax for any entrepreneur who sells

      685
      his business, will mean that the overall benefit for any small business will be 10, 20, 30 or 40 times the increase in national insurance?
      Mr. Luff: I am glad to have flushed the hon. Gentleman out. He appears to be greatly concerned about that point. I could not persuade him with my previous argument, but perhaps I can persuade him with this one.
      When the Chancellor announced his business tax cuts, of which the hon. Gentleman is so proud—it gives me great pleasure to hear Opposition Members—[Interruption.] I am sorry; they will be Opposition Members again soon, but I meant to say that it gives me great pleasure to hear Government Members boast about their desire to cut the rate of business taxation. Even if they are not succeeding in doing so, I am glad that at least they seem to want to try. When the Chancellor announced his so-called business tax cuts, he did not mention—
      John Mann: Will the hon. Gentleman give way?
      Mr. Luff: I will deal with one intervention at a time. If when I have finished, the hon. Gentleman is not satisfied with my answer, I shall happily give way to him a third time.
      Let me make this point: a company that does not make a profit does not pay corporation tax, but it does pay national insurance contributions. That is tremendously important. For struggling businesses, new businesses, or businesses facing short-term difficulties, the national insurance contributions increases are far more damaging than any corporation tax increase, and any NIC cut would be far more beneficial than any corporation tax cut. The hon. Gentleman should remember that even in the brave new world created by the Chancellor, many businesses find life tough. That is why the national insurance contributions increases are so serious for business.
      John Mann: The hon. Gentleman suggests that the cuts in corporation tax are illusory. They are real cuts that any business person can see—real cuts, year on year, for anyone who runs a business. That is why there are so many more successful businesses, and 1.5 million people back in work. For anyone running a business, the key issue of certainty centres on interest rates. Are not current interest rates the lowest since the 1960s? Is not the cost of borrowing money for a business, small or large, lower than ever? Is that not the reason for the increased profitability in the small business sector in the past five years?
      Mr. Luff: I ought to invite the hon. Gentleman to make his own speech, because that was a long intervention. I suspect that you would rule out a discussion on interest rates policy, Mr. Deputy Speaker—I am glad to see you nod in agreement, Sir.
      I agree that not everything is a problem in the modern British economy. I am glad that not everything that the last Conservative Administration put in place has been squandered by the incoming Labour Government. I fully agree that we have enjoyed a sustained period of growth over many years—much longer than the Government have been in office. That is excellent news, but it does not justify swingeing increases in business taxation, which are disguised in the Bill and have been condemned by the business sector.
      686
      I am worried that the Government are not prepared to assess the implications of the changes for employment. They were happy to boast about the impact of reductions in national insurance contributions accompanying the climate change levy, and their beneficial effect on employment, but now they are increasing national insurance contributions, that willingness to calculate has disappeared entirely. The CBI estimates that companies will pay £4 billion more in tax because of the 1 per cent. increase in national insurance from next April, which comes on top of the additional £6 billion a year net in extra taxes that has been imposed on the business sector and the £5 billion-worth a year of extra red tape. Those burdens are beginning seriously to impede companies' ability to win orders and create jobs.
      John Mann indicated dissent.
      Mr. Luff: It is no good the hon. Gentleman shaking his head in disbelief. Ernst and Young, in its ITEM—independent Treasury economic model—club report for spring 2002, said:
      "Many companies will be taking another look at headcount before the increase in payroll tax comes in next April".
      The report also said:
      "The risk is that employers, already under pressure from high labour costs, and in many cases unable to pass costs on to the consumer"—
      the hon. Gentleman needs to bear that important point in mind—
      "will take another look at staffing levels before next April. An extra 1 per cent. on the wage bill may not seem much but it adds up to £3.9 billion in a full year, 12 per cent. of the corporation tax bill. For many companies, an extra 1 per cent. on labour costs may prove to be the last straw".
      I do not share the hon. Gentleman's optimism about the Bill's impact on the business sector; far from it—the impact could be serious.
      The Bill's impact on the public sector concerns the whole House. There are, for example, about 1 million NHS workers in England alone; the 1 per cent. rise in employers' national insurance contributions will increase the cost of employing them by about £200 million. In my constituency, that is of particular concern to general practitioners. In south Worcestershire, the settlement for our primary care trust was not generous, as the area was split up to form the new trusts that replaced the old primary care groups.
      Pay settlements for ancillary workers in surgeries impose a burden on GPs' budgets, and on top of that, those doctors have to pay a 1 per cent. increase in national insurance contributions. Local GPs are wondering what economies they will have to make in the running of their surgeries and what reductions in service they will offer my constituents—their patients—as a direct result of the increase in national insurance contributions and other factors of the Government's making. There are therefore genuine concerns about the Bill's impact on the quality of the service provided by the NHS in my constituency.
      The police are another interesting example. Today the Home Office announced that three constabularies in the west midlands, including West Mercia police, would get an extra £900,000 to help in the fight against terrorism, which would mean an extra £300,000 each. I am sure that that figure will be dwarfed by the increase in the national

      687
      insurance bill for the West Mercia constabulary alone; the Lord giveth and the Lord taketh away. It was ever thus, I suppose, but the impact is serious and will impose a further burden on a service that had to raise its council tax precept by 33 per cent. to achieve an acceptable level of policing in my constituency.
      Those changes, coupled with the changes in income tax, will have a direct impact on ordinary people—the voters themselves—not just the businesses or public sector services that employ them. A nurse consultant on £34,000 a year will be £26 a month worse off from next year, a police inspector on £37,000 a year will be £30 a month worse off, and an employee earning £20,000 a year will be £15 a month worse off. Those increases in personal taxation directly break the Government's promises to the people of Britain in the election campaign. That is an important point. For a Government, within a year of an election, to bring forward legislation that directly contradicts the promises that they gave to the people at that election should he a cause for shame, not for pride. However, that is what this Government have done.
      On 22 May 2001 the Prime Minister was interviewed by Jeremy Paxman, who asked him:
      "I am merely asking why you could give this guarantee"—
      not to abolish the national insurance ceiling—
      "last time but you can't give it this time and whether any reasonable person wouldn't suppose that you therefore propose to increase national insurance contributions."
      I agree that that is rather a convoluted question, but the Prime Minister's reply was, "They shouldn't." He said that people should not make that supposition. However, a year later legislation is introduced to do precisely what the Prime Minister clearly implied would not happen.
      The previous Chief Secretary, who is now the Secretary of State for Work and Pensions, was asked on the Dimbleby programme:
      "You say that you won't rule it out because you can't afford to. Do you also accept that as far as voters are concerned, National Insurance is regarded as a tax on income?"
      This is the nearest that we get to an honest answer from a Minister to such a question. The right hon. Gentleman said:
      "Well, certainly it comes out of the wage packet."
      It certainly does, and people will feel it next year.
      I am glad to see that the hon. Member for Streatham (Keith Hill), the Government Deputy Chief Whip, is in his place. On "Your Call" on Sky News on 4 June 2001, he said:
      "We have no plans to raise any kind of so-called stealth taxes. Gordon Brown has made it perfectly clear that we have absolutely no plans to raise the ceiling on National Insurance."
      You know now, Mr. Speaker, that if Ministers or their representatives say that they have absolutely no such plans, you should start reaching for your wallet as a matter of urgency, because plans certainly exist.
      I should add that I have great affection for the Government Deputy Chief Whip, who made possible an important bypass in my constituency, for which I shall always be in his debt, as will the people of Wyre Piddle—but I will not labour that point for fear of upsetting the hon. Gentleman any further.
      688
      Then there is the reform of the health service itself. The Government are effectively hypothecating their national insurance increases for the health service. I have said already that they have had a closed mind about the reforms that are necessary in the health service to make sure that it can use the moneys effectively.
      I now have four questions for whichever Minister will wind up the debate. I am not entirely sure which of the two present that will be, but I am sure that whoever it is will do it extremely well. By the time of the next election, spending on the NHS will have increased by 70 per cent. in real terms since 1997. Does the Minister think that the NHS will have improved by 70 per cent. in that period? When patients in Britain are dying of diseases that they would not die of if they lived in other European countries, why did the Chancellor tell Mr. Wanless not to consider any of the ways of administering health care that have proved more successful elsewhere?
      Next, can the Minister explain why despite the fact that NHS spending has increased by nearly one third since the Government came to office, the number of people waiting to get on the NHS waiting list has increased by 113,000? During Prime Minister's questions my right hon. Friend the Leader of the Opposition asked:
      "By the time of the next general election when health spending in Britain has reached the European average, will we have European standards of health care?"—[Official Report, 24 April 2002; Vol. 384, c. 328.]
      The Prime Minister refused to say that we would. Why did he refuse to answer that question? These are important questions that the Government need to answer.
      I remain unconvinced by my experience that the Government are making effective use of the spare resources that exist in the private health sector in my constituency. I remain concerned that some of the problems of the health service have been created directly by the policies introduced by the Government. The question of social services beds, which was referred to by the hon. Member for Oxford, West and Abingdon (Dr. Harris), is crucial. The burdens imposed on the caring sector have been huge, and have contributed directly to delayed discharges from hospitals in Worcestershire. Those problems could have been avoided not by spending money but by having a more friendly and sensible regulatory regime.
      The Bill should be resisted, for the five reasons that I have set out. There is the impact on business, the cost to the public sector, the cost to voters, the broken promises and the Government's failure to reform the health service appropriately to ensure that money is spent appropriately. I am sad that the Government have not seen the error of their ways, and I hope that the House will vote to oppose the Bill on Third Reading in a few minutes' time.
      9.39 pm
      Mr. Chope: With the leave of the House, Mr. Speaker.
      I congratulate my hon. Friend the Member for Mid-Worcestershire (Mr. Luff) on an excellent speech, and hope that the Government will respond to his powerful comments. Let me make a few more points, very briefly.
      The hon. Member for Oxford, West and Abingdon (Dr. Harris) made an important observation when he said that throwing more money at the NHS would not produce quick results. I think that if the Government deployed

      689
      their resources in tackling existing inefficiencies immediately, they would secure much quicker results. Only last month, an Audit Commission report suggested that inefficiency in the NHS was costing the equivalent of 150,000 operations a year—the number of operations that the NHS plans to buy from the private sector this year. Think of the enormous sums that could be saved if the existing system were reformed.
      We still feel that the Government have gone for the easy socialist option of increasing taxes and throwing more money at the public service, when what we really need to do is make the public service better. That can be achieved only through proper, substantial reform.
      9.41 pm
      Dawn Primarolo: There are now more than 107,000 fewer people on NHS waiting lists. No one is waiting more than 15 months for operations, whereas nearly 60,000 were doing so in March 1997. There are 6,000 fewer people waiting more than 12 months for operations, and we are on course to eliminate that figure by the end of next year. Just 500 people—500 too many, admittedly—have been waiting more than six months to see consultants, compared with more than 70,000 in March 1997.
      There are now 25 per cent. more heart operations—some 10,000—every year. There are 171 more cardiologists, an increase of over 40 per cent. More than 95 per cent. of people urgently referred by their general practitioners with suspected cancer now see consultants within two weeks, compared with 63 per cent. in 1997. There are 566 more cancer consultants, an increase of 18 per cent. There are 50 per cent. more computerised tomography scans, and 86 per cent. more magnetic resonance imaging scans. An additional 500,000 operations are performed in the NHS every year, an increase of 10 per cent.
      Last year there were 700 more general and acute beds in the NHS—the first increase in bed numbers for 30 years. NHS Direct has been rolled out across the country. The number of delayed discharges has been reduced; 4,700 such people now occupy acute hospital beds. Of course we desperately need to ensure that those people have appropriate care and support, but that compares with 6,800 delayed discharges in 1997.
      Twelve major hospital schemes have been completed, and a further 15 are under construction. Every accident and emergency department that needed modernisation has now been modernised. Moreover, there are now 31,000 more nurses and 9,500 more doctors, including 2,000 new, modern matrons.
      Despite all that, the hon. Member for Oxford, West and Abingdon (Dr. Harris) has the cheek to suggest that nothing has changed and that the Government have not been investing more money in the health service and ensuring that it grows. I must tell him that his constant parroting of "We, the Liberal Democrats, will cost you 1p," or "We, the Liberal Democrats, would raise the money in a different way," is no substitute for hard policies and delivery of services in the NHS. As the Chancellor of the Exchequer has made clear, the Bill sets out plans for an unprecedented increase in spending in the NHS, together with responsibility for proposals for financing that increased spending.
      What of the Tories? We have gone through yet another debate on national insurance, but are we any the wiser about their policy? No. The Tories are still thinking
      690
      about it—open-minded and empty-headed. There are no proposals from them. They are so empty-headed that they cannot even make it clear on the Floor of the House that they are committed to a comprehensive health service available on the basis of need, not ability to pay. Have we heard one of them utter that principle? No.
      What we have heard the Tories say is why we should use taxpayers' money to subsidise private medical health care, why they believe that employers should not meet their obligations in contributing to a fine and first-class NHS, and why they believe that there is a magic formula out there to produce a health service that will respond to people's requirements and needs but will not require any extra resources. If they had learned anything from their defeats in 1997 and 2001, it would have been that the British electorate rejected their policies of underfunding the public sector and the NHS, and that the British electorate want their health service to be the best in the world and are prepared to pay for that on a fair and equal basis built on the fine principles of the Beveridge proposals. Yet again, all we have heard today from the Tories is why they want to stop that happening.
      I say to the House and to the British electorate that if they had any doubts that the intention of the Conservative Opposition is to privatise the NHS, to cut it and to create a two-tier NHS, they have seen the proof of that intention in the debate tonight. This Bill guarantees, for the first time in the history of the NHS, consistent investment in the NHS: staff, beds, buildings and services to respond to the needs of the British people. I commend the Bill to the House.
      Question put, That the Bill be now read the Third time:—
      The House divided: Ayes 336, Noes 129.

      Division No. 258]

      [9.48 pm

      AYES

      Adams, Mrs Irene (Paisley N)

      Brennan, Kevin

      Ainger, Nick

      Brooke, Mrs Annette L

      Ainsworth, Bob (Cov'try NE)

      Brown, Rt Hon Nicholas (Newcastle E & Wallsend)

      Allen, Graham

      Anderson, Janet (Rossendale)

      Brown, Russell (Dumfries)

      Armstrong, Rt Hon Ms Hilary

      Browne, Desmond

      Atkins, Charlotte

      Bruce, Malcolm

      Austin, John

      Bryant, Chris

      Bailey, Adrian

      Buck, Ms Karen

      Baird, Vera

      Burden, Richard

      Baker, Norman

      Burnham, Andy

      Banks, Tony

      Burstow, Paul

      Barnes, Harry

      Cairns, David

      Barrett, John

      Calton, Mrs Patsy

      Barron, Kevin

      Campbell, Alan (Tynemouth)

      Battle, John

      Campbell, Mrs Anne (C'bridge)

      Beard, Nigel

      Campbell, Rt Hon Menzies (NE Fife)

      Begg, Miss Anne

      Beith, Rt Hon A J

      Campbell, Ronnie (Blyth V)

      Benn, Hilary

      Caplin, Ivor

      Bennett, Andrew

      Carmichael, Alistair

      Benton, Joe

      Casale, Roger

      Betts, Clive

      Caton, Martin

      Blackman, Liz

      Cawsey, Ian

      Blears, Ms Hazel

      Challen, Colin

      Blizzard, Bob

      Chapman, Ben (Wirral S)

      Boateng, Rt Hon Paul

      Clapham, Michael

      Bradley, Rt Hon Keith (Withington)

      Clark, Dr Lynda (Edinburgh Pentlands)

      Bradley, Peter (The Wrekin)

      Bradshaw, Ben

      Clark, Paul (Gillingham)

      Brake, Tom

      Clarke, Rt Hon Tom (Coatbridge)

      Breed, Colin

      Clarke, Tony (Northampton S)

      691

      Clelland, David

      Harris, Tom (Glasgow Cathcart)

      Clwyd, Ann

      Harvey, Nick

      Coaker, Vernon

      Healey, John

      Coffey, Ms Ann

      Henderson, Doug (Newcastle N)

      Cohen, Harry

      Henderson, Ivan (Harwich)

      Coleman, Iain

      Hendrick, Mark

      Connarty, Michael

      Hepburn, Stephen

      Cook, Frank (Stockton N)

      Heyes, David

      Cook, Rt Hon Robin (Livingston)

      Hill, Keith

      Corbyn, Jeremy

      Hinchliffe, David

      Corston, Jean

      Hodge, Margaret

      Cotter, Brian

      Holmes, Paul

      Cousins, Jim

      Hood, Jimmy

      Cox, Tom

      Hope, Phil

      Cruddas, Jon

      Hopkins, Kelvin

      Cryer, John (Hornchurch)

      Howarth, Rt Hon Alan (Newport E)

      Cummings, John

      Howarth, George (Knowsley N)

      Cunningham, Jim (Cov'try S)

      Howells, Dr Kim

      Cunningham, Tony (Workington)

      Hughes, Beverley (Stretford)

      Dalyell, Tam

      Hughes, Simon (Southwark N)

      Davey, Edward (Kingston)

      Humble, Mrs Joan

      Davey, Valerie (Bristol W)

      Hurst, Alan

      Davidson, Ian

      Hutton, Rt Hon John

      Davies, Rt Hon Denzil (Llanelli)

      Iddon, Dr Brian

      Dawson, Hilton

      Illsley, Eric

      Dean, Mrs Janet

      Irranca-Davies, Huw

      Denham, Rt Hon John

      Jamieson, David

      Dismore, Andrew

      Jenkins, Brian

      Dobbin, Jim

      Johnson, Alan (Hull W & Hessle)

      Dobson, Rt Hon Frank

      Jones, Helen (Warrington N)

      Donohoe, Brian H

      Jones, Jon Owen (Cardiff C)

      Doran, Frank

      Jones, Kevan (N Durham)

      Doughty, Sue

      Jones, Martyn (Clwyd S)

      Dowd, Jim

      Joyce, Eric

      Drew, David

      Kaufman, Rt Hon Gerald

      Drown, Ms Julia

      Keeble, Ms Sally

      Eagle, Angela (Wallasey)

      Keen, Alan (Feltham & Heston)

      Eagle, Maria (L'pool Garston)

      Keen, Ann (Brentford & Isleworth)

      Edwards, Huw

      Kemp, Fraser

      Efford, Clive

      Khabra, Piara S

      Ellman, Mrs Louise

      Kidney, David

      Ewing, Annabelle

      Kilfoyle, Peter

      Farrelly, Paul

      King, Ms Oona (Bethnal Green)

      Field, Rt Hon Frank (Birkenhead)

      Kirkwood, Archy

      Fisher, Mark

      Knight, Jim (S Dorset)

      Fitzpatrick, Jim

      Kumar, Dr Ashok

      Fitzsimons, Mrs Lorna

      Lamb, Norman

      Flint, Caroline

      Lammy, David

      Flynn, Paul

      Laws, David

      Follett, Barbara

      Lazarowicz, Mark

      Foster, Rt Hon Derek

      Leslie, Christopher

      Foster, Don (Bath)

      Levitt, Tom

      Foster, Michael (Worcester)

      Lewis, Ivan (Bury S)

      Foster, Michael Jabez (Hastings)

      Liddell, Rt Hon Mrs Helen

      Foulkes, George

      Linton, Martin

      Francis, Dr Hywel

      Lloyd, Tony

      Gapes, Mike

      Love, Andrew

      Gardiner, Barry

      Lucas, Ian

      George, Andrew (St Ives)

      Luke, Iain

      George, Rt Hon Bruce (Walsall S)

      Lyons, John

      Gerrard, Neil

      McCafferty, Chris

      Gibson, Dr Ian

      McDonagh, Siobhain

      Gidley, Sandra

      MacDonald, Calum

      Gilroy, Linda

      McDonnell, John

      Godsiff, Roger

      McFall, John

      Goggins, Paul

      McGuire, Mrs Anne

      Green, Matthew (Ludlow)

      McIsaac, Shona

      Griffiths, Jane (Reading E)

      McKechin, Ann

      Griffiths, Win (Bridgend)

      McKenna, Rosemary

      Grogan, John

      McNamara, Kevin

      Hall, Mike (Weaver Vale)

      McNulty, Tony

      Hamilton, David (Midlothian)

      MacShane, Denis

      Hamilton, Fabian (Leeds NE)

      Mactaggart, Fiona

      Hancock, Mike

      McWalter, Tony

      Hanson, David

      Mahmood, Khalid

      Harris, Dr Evan (Oxford W)

      Mahon, Mrs Alice

      692

      Mallaber, Judy

      Sheridan, Jim

      Mann, John

      Shipley, Ms Debra

      Marris, Rob

      Simpson, Alan (Nottingham S)

      Marsden, Gordon (Blackpool S)

      Singh, Marsha

      Marsden, Paul (Shrewsbury)

      Skinner, Dennis

      Marshall-Andrews, Robert

      Smith, Angela (Basildon)

      Martlew, Eric

      Smith, Geraldine (Morecambe)

      Meacher, Rt Hon Michael

      Smith, Jacqui (Redditch)

      Milburn, Rt Hon Alan

      Smith, John (Glamorgan)

      Miliband, David

      Smith, Llew (Blaenau Gwent)

      Miller, Andrew

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

      Moffatt, Laura

      Soley, Clive

      Moonie, Dr Lewis

      Southworth, Helen

      Moore, Michael

      Starkey, Dr Phyllis

      Moran, Margaret

      Steinberg, Gerry

      Morris, Rt Hon Estelle

      Stevenson, George

      Mountford, Kali

      Stewart, David (Inverness E)

      Mullin, Chris

      Stewart, Ian (Eccles)

      Munn, Ms Meg

      Stinchcombe, Paul

      Murphy, Denis (Wansbeck)

      Stoate, Dr Howard

      Murphy, Jim (Eastwood)

      Strang, Rt Hon Dr Gavin

      Naysmith, Dr Doug

      Stringer, Graham

      Oaten, Mark

      Stuart, Ms Gisela

      O'Brien, Mike (N Warks)

      Stunell, Andrew

      O'Neill, Martin

      Sutcliffe, Gerry

      Organ, Diana

      Taylor, Ms Dari (Stockton S)

      Palmer, Dr Nick

      Taylor, Matthew (Truro)

      Pearson, Ian

      Thomas, Gareth R (Harrow W)

      Perham, Linda

      Thomas, Simon (Ceredigion)

      Picking, Anne

      Thurso, John

      Pickthall, Colin

      Timms, Stephen

      Pike, Peter

      Tipping, Paddy

      Plaskitt, James

      Todd, Mark

      Pollard, Kerry

      Tonge, Dr Jenny

      Pond, Chris

      Trickett, Jon

      Pope, Greg

      Truswell, Paul

      Pound, Stephen

      Turner, Dennis (Wolverh'ton SE)

      Prentice, Ms Bridget (Lewisham E)

      Turner, Dr Desmond (Kemptown)

      Prentice, Gordon (Pendle)

      Twigg, Derek (Halton)

      Prescott, Rt Hon John

      Twigg, Stephen (Enfield)

      Price, Adam

      Vis, Dr Rudi

      Primarolo, Dawn

      Walley, Ms Joan

      Prosser, Gwyn

      Ward, Ms Claire

      Pugh, Dr John

      Wareing, Robert N

      Purchase, Ken

      Watts, David

      Purnell, James

      Webb, Steve

      Quinn, Lawrie

      Weir, Michael

      Rammell, Bill

      Whitehead, Dr Alan

      Rapson, Syd

      Williams, Rt Hon Alan (Swansea W)

      Reed, Andy (Loughborough)

      Reid, Alan (Argyll & Bute)

      Willis, Phil

      Rendel, David

      Winnick, David

      Roche, Mrs Barbara

      Wishart, Pete

      Rooney, Terry

      Wood, Mike

      Ross, Ernie

      Woodward, Shaun

      Roy, Frank

      Worthington, Tony

      Ruddock, Joan

      Wray, James

      Russell, Bob (Colchester)

      Wright, David (Telford)

      Ryan, Joan

      Wright, Tony (Cannock)

      Salter, Martin

      Younger-Ross, Richard

      Sanders, Adrian

      Savidge, Malcolm

      Tellers for the Ayes:

      Sawford, Phil

      Mr. John Heppell and

      Sedgemore, Brian

      Mr. Phil Woolas.

      NOES

      Amess, David

      Bottomley, Peter (Worthing W)

      Atkinson, Peter (Hexham)

      Bottomley, Rt Hon Virginia

      Bacon, Richard

      Brady, Graham

      Barker, Gregory

      Browning, Mrs Angela

      Baron, John

      Burns, Simon

      Bellingham, Henry

      Burnside, David

      Bercow, John

      Cameron, David

      Beresford, Sir Paul

      Cash, William

      Blunt, Crispin

      Chope, Christopher

      Boswell, Tim

      Clifton-Brown, Geoffrey

      693

      Collins, Tim

      McLoughlin, Patrick

      Conway, Derek

      Malins, Humfrey

      Cormack, Sir Patrick

      Maples, John

      Cran, James

      Mates, Michael

      Davies, Quentin (Grantham)

      Maude, Rt Hon Francis

      Djanogly, Jonathan

      Mawhinney, Rt Hon Sir Brian

      Dorrell, Rt Hon Stephen

      May, Mrs Theresa

      Duncan, Peter (Galloway)

      Mercer, Patrick

      Fabricant, Michael

      Mitchell, Andrew (Sutton Coldfield)

      Fallon, Michael

      Moss, Malcolm

      Field, Mark (Cities of London)

      Murrison, Dr Andrew

      Flight, Howard

      Norman, Archie

      Flook, Adrian

      O'Brien, Stephen (Eddisbury)

      Forth, Rt Hon Eric

      Osborne, George (Tatton)

      Fox, Dr Liam

      Page, Richard

      Francois, Mark

      Paice, James

      Garnier, Edward

      Pickles, Eric

      Gibb, Nick

      Prisk, Mark

      Gillan, Mrs Cheryl

      Randall, John

      Goodman, Paul

      Redwood, Rt Hon John

      Gray, James

      Robathan, Andrew

      Grayling, Chris

      Robertson, Hugh (Faversham)

      Green, Damian (Ashford)

      Robertson, Laurence (Tewk'b'ry)

      Greenway, John

      Roe, Mrs Marion

      Grieve, Dominic

      Ruffley, David

      Gummer, Rt Hon John

      Sayeed, Jonathan

      Hammond, Philip

      Selous, Andrew

      Hawkins, Nick

      Simmonds, Mark

      Heathcoat-Amory, Rt Hon David

      Simpson, Keith (Mid-Norfolk)

      Hendry, Charles

      Soames, Nicholas

      Hoban, Mark

      Spelman, Mrs Caroline

      Horam, John

      Spicer, Sir Michael

      Howard, Rt Hon Michael

      Spring, Richard

      Howarth, Gerald (Aldershot)

      Stanley, Rt Hon Sir John

      Jack, Rt Hon Michael

      Steen, Anthony

      Jackson, Robert (Wantage)

      Streeter, Gary

      Jenkin, Bernard

      Swire, Hugo

      Johnson, Boris (Henley)

      Syms, Robert

      Key, Robert

      Tapsell, Sir Peter

      Kirkbride, Miss Julie

      Taylor, John (Solihull)

      Laing, Mrs Eleanor

      Taylor, Sir Teddy

      Lait, Mrs Jacqui

      Tredinnick, David

      Lansley, Andrew

      Turner, Andrew (Isle of Wight)

      Leigh, Edward

      Tyrie, Andrew

      Letwin, Oliver

      Viggers, Peter

      Lewis, Dr Julian (New Forest E)

      Walter, Robert

      Liddell-Grainger, Ian

      Waterson, Nigel

      Lidington, David

      Watkinson, Angela

      Loughton, Tim

      Whittingdale, John

      Luff, Peter

      Widdecombe, Rt Hon Miss Ann

      McIntosh, Miss Anne

      Wiggin, Bill

      MacKay, Rt Hon Andrew

      Willetts, David

      Maclean, Rt Hon David

      Winterton, Mrs Ann (Congleton)

      694

      Winterton, Nicholas (Macclesfield)

      Tellers for the Noes:

      Yeo, Tim

      Mr. Desmond Swayne and

      Young, Rt Hon Sir George

      Mr. Julian Brazier.

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

  DELEGATED LEGISLATION
  Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),
  DELEGATED LEGISLATION

    INVESTIGATORY POWERS
    That the draft Regulation of Investigatory Powers (Interception of Communications: Code of Practice) Order 2002, which was laid before this House on 8th May, be approved.—[Mr. Jim Murphy.]
    Question agreed to.

  DEREGULATION
  Motion made, and Question put forthwith, pursuant to Standing Order No. 18(1)(a) (Consideration of draft deregulation orders),
  DEREGULATION

    VACCINE DAMAGE PAYMENTS
    That the draft Regulatory Reform (Vaccine Damage Payments Act 1979) Order 2002, which was laid before this House on 29th April, be approved.—[Mr. Jim Murphy.]
    Question agreed to.

  NORTHERN IRELAND GRAND COMMITTEE
  Resolved,
  That—

  (1) the matter of the scope for a Bill of Rights in Northern Ireland, being a matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Grand Committee;

  (2) the Committee shall meet at Westminster on Thursday 27th June at 2.30 p.m.; and

  (3) at the meeting—

  (a) the Chairman shall interrupt proceedings at 4.30 p.m.; and

  (b) at the conclusion of those proceedings a motion for the adjournment of the Committee may be moved by a Minister of the Crown pursuant to Standing Order No. 116(5) (Northern Ireland Grand Committee (sittings)).—[Mr. Jim Murphy.]

  Overseas Students
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jim Murphy.]
  10.4 pm
  Sue Doughty: I am grateful for the opportunity to bring a matter of great concern to me to the attention of the House. In brief, the Government promise great things to foreign students who study here, but fail spectacularly to deliver when they arrive, not in the nature of their studies—our universities and colleges do a fine job—but through a series of extraordinary hassles with their passports and visas. I have had many examples in my constituency. The immigration and nationality directorate of the Home Office appears to be the main culprit. It makes Railtrack under the right hon. Member for Tyneside, North (Mr. Byers) look like a shining example of efficiency by comparison. The story that I shall tell shows a saga not so much of joined-up government as of one Department frantically working to undermine the work of another.
  The background to the problem is this: British universities and further education colleges, supported by the Department for Education and Skills, have much to offer overseas students, who, at the same time benefit the economy and education funding. We hope and expect that students gain not only an excellent education but a positive impression of this country which is of benefit to international relations as well as our international trading position. We hope that they will tell their friends what a good place the United Kingdom is to study so that more will come and extend that benefit.
  Figures produced by the Higher Education Statistics Agency for the academic year 2001–02 show that nearly 240,000 overseas students were studying in the UK. In total, they represented 11 per cent. of all students in these institutions—an increase of about 17.5 per cent. above 1995–96 levels. The income to higher education institutions in 1999–2000, the most recent year for which figures are available, was £672 million—5.2 per cent. of the total income for that sector.
  The Prime Minister is aiming to increase the number of overseas students, and in June 1999 he launched a campaign to make the UK a world-class leader in international education and lifelong learning. Two key objectives were set for further education and higher education institutions—to be the first choice for quality among international students at higher education level, with an increase of 50,000 non-European Union international students by 2005, and to be the world's leading nation for international students to undertake further education, with an increase of 100 per cent. in full-time students by 2005.
  To help achieve these targets, the Government put in place a four-element package of measures, consisting of a £6 million investment in the development and three-year promotion of a new UK education brand, led by the British Council, with enhanced marketing in priority countries, including India, Pakistan and China, the streamlining of visa arrangements for students applying to study in the UK, the easing of procedures on permission for students to work part time and in vacations and the expansion of the Chevening scholarship scheme.
  International nursing students want clarification from the Minister on these improvements. They want confirmation that there is no requirement for them to
  696
  commit to leaving the UK as a condition of obtaining a visa and that they are entitled to work up to 20 hours a week during term time and for an unlimited time during vacations.
  Our further and higher education institutions have risen to the challenge that the Government have set with these new measures. The provisional data show a fall, as requested, of 6 per cent. of students from other EU countries, and an increase of 12 per cent. of students outside the EU. Moreover, there will be additional income from off-campus spending by overseas students.
  This should be a good news story. Guildford college of further and higher education and Surrey university have marketed strongly in these countries. However, what should be a purposeful and pleasant visit to the UK by overseas students has been turned into forced exile for some and misery for many.
  Like other right hon. and hon. Members who have the privilege of serving constituencies with higher and further education establishments, I regularly see cases in which an application for a student visa has resulted in an unacceptably long time before a passport is returned.
  An example lies in the events that led up to my calling for this debate. A student at Guildford college, a Hungarian national, contacted me last October. She had first applied to the Home Office for a visa in April 2000 when she came to start a course of study at Chelsea. She then applied for an extension in good faith, having gained a place at Guildford college. I know that she is studying hard: her English has come on in leaps and bounds since I first met her. She has been here quite a while now.
  The student submitted her passport and trusted that all was in order. She registered her home address as that of her English relatives, to be absolutely certain that documents would reach her. She lives in Guildford. A member of my team telephoned the Home Office on 14 November and was assured that the matter would be looked into. We made follow-up calls, and having heard nothing by December, I wrote to the then Minister, enclosing further documentation and evidence of her current course, as requested. We asked for a progress report but got no reply. A member of her family also wrote to the Home Office.
  We followed up the problem in early February, having given the Home Office the opportunity to find the file, which we were told was in Becket house. We were promised a return call but never received it. On 27 February, we followed up again and were told that the file was with the Minister's correspondence officer. Meanwhile, the student was concerned that, after all this time, with my intervention, she should get her passport back. She wanted to go home for a visit before her exams. Having originally applied in April 2000, she thought that the passport would turn up and she booked a return ticket home.
  We were told that the passport was not in the Minister's office but with the immigration control inspectorate. The student rang Lunar house and was told that the papers were there and she should go there at 6 o'clock the next morning. This is like Kafka. She duly got up at 4 o'clock, but when she got there she was told that the passport was not there and was probably in Becket house, so she came back. We followed up and the Home Office said that it had probably been lost and she should apply to the Hungarian embassy for a replacement. She was really

  697
  worried that the embassy would take a dim view of her having lost her passport, so we got a letter from the Home Office and she applied for a passport from the embassy.
  By the end of March, we had learned from the Minister's office that the entire application had been lost and the student would have to start the whole process again. By the end of April, she received a new passport from the Hungarian embassy—it was rather more efficient that the IND—and by 8 May we were following up yet again and, lo and behold, the original passport turned up in Becket house. By late May, her file was back with the Minister. I am afraid that that is my fault, because with all that was going on we had by then requested this Adjournment debate.
  Surprise, surprise, having written three letters to the then Minister with no response to any, since securing this debate I have received a response from the current Minister. It came by fax at 1.20 pm last Friday. Half the information in it is wrong. Information requested has already been supplied, and other information about the history is simply inaccurate.
  I shall not go into the detail of the letter here, and I would not have brought the matter to the House if that was the only problem, but it shows the complete lack of competence in the handling of some applications. There is a fast-track scheme, and it works brilliantly. I have a student who does some cleaning for me who is really pleased with it, but when a student application is not allowed within the scheme and has to go through the standard route, there are problems.
  The system is unacceptably slow. Delays of six months are commonplace, and Surrey university and Guildford college have examples of delays of more than a year. The standard letter of reply mentions a likely delay of nine months. To deny a person his or her passport for so long is completely unacceptable and possibly an abuse of human rights. A person cannot travel or use the passport for identification, for example to set up a bank account or get part-time employment or concessionary student cards. Students without their passport feel insecure. They are brought up to have identification and expect to have it if asked by the police. They have a constant nagging feeling that they are doing something wrong. When we raised some of those points, we were told that a student could get their passport back by withdrawing their application, but that is fatuous because the student would have to start all over again thus prolonging the delay, or return to their own country to await the renewal of their visa there, thus interrupting their studies.
  I can understand the IND's concern about citizens from certain countries of the world. Among the student population it is strongly believed that applications from Libyans, Iranians, Pakistanis and Zimbabweans will never go through the fast-track system. That can be due only to suspicions that they do not desire to return home on completion of their studies, and the IND may want to check the facts. However, to create anxiety among people does no good; it does not help relations with their countries and makes a lasting impression on those people.
  Furthermore, there is deep suspicion among many students that those from more affluent families experience longer delays because money might change hands. I cannot substantiate that suspicion as I have no evidence, but it is a common belief.
  698
  The university has regularly called on me and on my predecessor to untangle problems—as has Guildford college. I shall quickly refer to other cases, to show that the situation that I described earlier is not a one-off.
  A Libyan student wants to spend a short period at a French university, with which her department has had contact, as part of her PhD programme. Her passport has been with the IND for six months and she cannot go to France.
  Two Turkish Cypriots sent separate visa applications in October and November 2001. Despite their requests, the visa stamps were put in their passports, rather than their identity cards as required by their home country. One ID card was never returned, while the other was returned without a stamp and had to be sent back. All the documents were mislaid—they are still missing. The students experienced great problems in travelling to their home country and incurred considerable expense in obtaining replacement documents.
  An Indian who visited my surgery made an application in December 2001. He had heard nothing by May when he was anxious to return home for a family wedding. His presence was urgently required as a close relative had been involved in a car accident and was in a critical condition. I managed to get that passport returned, but it needed my intervention.
  Iranian students frequently cannot return home when they want to. A Russian submitted an application in November 2001 and is still waiting. He has to go home on a visit this summer.
  It is embarrassing to have to apologise on behalf of my country for the way that we treat people who are not only our honoured guests but are also customers of education UK, yet I have to do so regularly in my surgery. I am repeatedly told that these events occur not only to students but to others, although we do not have time to deal with those cases.
  The purpose of the debate is to find out what on earth is happening and to get to the bottom of it. Will the Minister tell me how things have got so bad? Why has it taken so long to do anything to sort out the mess? I am sure that it is not a Guildford special.
  Will the hon. Lady tell me why we are advertising courses in other countries even though we know what will happen after students arrive in the UK? Do they know the hell that they will have to go through to sort out their documentation?
  Is the Minister aware that many new students from Pakistan and India—priority countries according to the Prime Minister—who are expecting to start courses in September and October are being denied access to entry clearance services and will not be able to take up their places? We are trying to sell courses to such people.
  Is the Minister aware that, although international postgraduate students are crucial to our economy and to the academic viability of many universities, the Home Office often takes more than eight months to process applications for extensions of leave? During that time students do not have their passports and cannot go home for vacations or travel elsewhere.
  Is the Minister aware that, although China has been identified as a priority one country by the Prime Minister, the majority of Chinese students experience delays of many months in the processing of their extension applications,

  699
  because of the inefficiency of interdepartmental security checks? Is she aware that, despite the resumption of diplomatic relations with Libya in 1999, there has been no change in the way that the Home Office processes applications from Libyan students, granting them only six months leave at a time and taking months to process their applications, so that they are unable to leave the UK during their entire stay in this country?
  Is the Minister aware that, despite the Prime Minister's initiative to recruit more international students to the United Kingdom, passport stamps and vignettes have still not been amended to reflect students' rights to work as accorded as part of that initiative? Is she aware that students who succeed in appealing against the refusal of entry clearance will usually be delayed in joining their courses for the whole academic year? Is she aware that the Home Office's public inquiry office in Belfast is now closed, leaving international students studying in Northern Ireland with no way to make applications in person?
  I know of many more examples from Guildford college that relate to the IND's friendliness. Getting the IND to do something—friendly or not—would be a good thing, but being helpful to those people and making them feel good while they are here might help to sell education UK. In short, we are trying to get joined-up government, but the IND does its best to undermine education UK—the British Council and the Department for Education and Skills in their work in attracting foreign students to our country. The situation is bleak. Can the Minister give me any hope for the future?
  10.20 pm
  The Minister for Citizenship and Immigration (Beverley Hughes): I congratulate the hon. Member for Guildford (Sue Doughty) on securing this debate, and I do not blame her for seeking it, certainly on the basis of the case with which I am familiar and about which she has written to the Department.
  I am pleased to have the opportunity to make our position clear. I have to say that the person in the case with which I am most familiar—the one that I have investigated—was treated unacceptably. Although the hon. Lady raised several other cases, that treatment is not typical, but I want to set out our general student policy and some of the difficulties that have affected a number of people, as well as to say something about that case.
  In the time left to me, I probably cannot deal with all the questions that the hon. Lady asked me at the end of her speech, but I will write to her following the debate to deal with anything that I do not cover now. She is right to say that the United Kingdom welcomes overseas students and wants to welcome them. More than 300,000 students entered the UK in 2000, up from about 200,000, 10 years previously. So there is clearly a growing trend, which we very much welcome.
  We recognise, as does the hon. Lady, the mutual benefit of attracting overseas students to the UK. That benefit is to the students and certainly to our country. For the students, the UK can offer—as it does at the college in her constituency—high-quality and competitively priced education in a stimulating environment. Those who experience UK education and training tend to become lifelong friends of the UK, with all that that implies for
  700
  future political, trade and economic benefits in the UK. They also generate significant income for the UK and the wider economy.
  One of the aims of the Prime Minister's initiative, launched in 1999, to attract more overseas students, to which the hon. Lady referred, was to make visa and entry arrangements more user-friendly for students. After her experiences, she may think that that has a hollow ring, but that was certainly one of the intentions. We have tried to make the visa application process as simple as possible: we have produced more information for applicants; we have tried to reduce waiting times; and we have ensured that, wherever possible, leave to enter or remain is granted for the full duration of a course.
  However, I have to tell the hon. Lady that this is a question of balance. I do not say that to justify the treatment that she has described, but people have to recognise that we genuinely want to minimise inconvenience and delay to genuine students while ensuring that we have the necessary checks in place to identify and deter those people who would otherwise try to use that avenue to circumvent the controls. That could have been an issue in the case that she has raised, with which I shall deal in a moment.
  Students are free to take part-time work while studying in the UK, including during sandwich courses and internships. Those who have completed degrees here may be eligible to obtain work permits and to stay on in employment. I shall write to the hon. Lady on her specific question about nurses.
  For most of the period since the launch of the Prime Minister's initiative, the initial decisions on all applications for extensions of stay in the UK were generally made within three weeks. Of late, however, some applicants, including students, have had to wait much longer than we would have wished for a decision on their applications for further leave to remain. I assure the hon. Lady that we are doing everything possible to ensure that students can study here without encountering immigration problems.
  Many overseas students come to the United Kingdom with a student visa. That is a mandatory requirement in the immigration rules for all visa nationals wanting to come here to study. It does not, however, apply to non-visa nationals. Many come here as visitors and apply to stay on as students.
  In 2001–02, more than 370,000 general and settlement applications were made by post and in person. That was a 20 per cent. increase on the previous year and reflects the year-on-year growth that we have experienced. Of those, student applications represent the largest single category. At peak periods, they account for about 40 per cent. of all applications. The IND's target is to complete 70 per cent. of all general and settlement applications on initial consideration and within the three-week period. That target applies to all categories, including students. Because of an exceptionally high intake during the second half of 2001, however, and the implementation of a new database—[Interruption.] I hear laughter from a sedentary position, but unless we get the information technology right we will never succeed in dealing with the huge volume of applications in the kind of time scale that we want to achieve and that people expect. Those two factors therefore resulted in an increase from three weeks to eight weeks by the end of that year. That coincided with the

  701
  peak period for student applications—September and October—with the result that many student applications were affected.
  The very high intake of cases has meant that those cases that cannot be decided on initial consideration, because they are not straightforward, have taken up to nine months to consider. That was one of the cases that the hon. Lady cited, and I shall deal with the reasons in a moment.
  In connection with the Prime Minister's initiative, a batch scheme was introduced in August 2000 for universities and publicly funded colleges of higher education affiliated to the United Kingdom Council for Overseas Student Affairs. Under that scheme, which has worked very successfully, applications can be submitted in batches by universities and colleges with a promise that they will be processed within two weeks if everything is straightforward. The majority of student applications are straightforward, but a number require further investigation or inquiry before a decision can be made.
  Applications are considered on their individual merits. In many cases, inquiries have to be made to establish whether the requirements of the immigration rules have been met, for example. These may be to check whether the student or the sponsor has sufficient evidence of financial support for the duration of the studies. Some applicants wait until the end of their leave to enter in some other category under the immigration rules before applying to remain as students. That has to be checked out. Inquiries need to be made to check whether the applicant is a bona fide student. For example—this was an element in the case quoted by the hon. Lady—a person can enter the UK as a visitor or, in this case, as an au pair. One of the requirements of that leave of entry is that the person will leave at the end of their permitted stay. If the person applies at the end of that period to remain as a student, further inquiries need to be taken into account.
  In some cases, the study quoted is at private education institutions. Again, that was a feature of the case cited by the hon. Lady. In fact, an investigation was under way at the particular college at which that person had proposed to study. Some colleges, we believe, are set up simply to be fronts for that kind of application route. As the college was being investigated, the person's application to study there could not proceed until the investigation had been concluded. Visits and reports by the immigration service may also be necessary. There are an increasing number of such cases so, unfortunately, the necessary inquiries mean that some applications take longer to complete than expected. However, every effort is made and will increasingly be made to keep students informed although I accept that that was not a factor in this case.
  The hon. Lady mentioned the return of passports, and I agree that it is another important issue. The applicant's passport must be included with the application so that the decision can be endorsed in it. As I am sure she will appreciate, the passport is also needed as evidence of identity. The practice of the IND is to retain the passport until the application has been decided, but if it is needed for urgent travel, arrangements will be made for it to be
  702
  returned. However, that means that the application will be deemed to have been withdrawn, and that creates a difficulty for some people who want to leave. I accept that the person in the case that the hon. Lady described was not dealt with well. The passport appears to have been mislaid by Becket house before it was refound. That should not happen, and we will have to deal with that point.
  The hon. Lady cited a number of issues in which there has been general frustration in dealings with the IND. I accept that there were problems earlier this year in contacting the immigration and nationality enquiry bureau—the INEB—but the situation is now much improved. The bureau had modern, state-of-the-art call centre equipment installed in March this year and many staff have been recruited and are now fully trained. The bureau answers more than 22,000 calls a week, and our aim is that no caller should have to try more than three times to make a successful call and be given the information that they want.
  At the moment, the bureau can provide general information but, as we develop the software and the database, it will also be able to say more precisely what stage a particular application has reached. A new computer system called the general casework information database is also being developed and installed. When it is fully operational, it will enable the bureau's agents to give much more detailed information. All those measures will help to continue the improvement that has been started. I accept that we have got nowhere near the position that we want to reach, but we are working very hard.
  The hon. Lady mentioned correspondence, and we are instituting a tracking system. My predecessor had no knowledge of the fact that the hon. Lady had written three times, because that information had not penetrated as far as his office. We need a system that will enable us to track the letters that Members have written because Ministers need to know about them.
  I am very sorry that the hon. Lady's constituent experienced difficulties. Inevitably, such cases are not always as straightforward as they appear at first sight, and I have explained some of the ways in which that case was not straightforward. I have had the position of the constituent reviewed, particularly in the light of the fresh application that she has made to study at a different college. I am pleased to say that I have instructed my officials to grant her leave to remain in the UK as a student for 12 months in the first instance as I understand that her course will last for that long.
  If the hon. Lady, has other cases that she would like me to investigate, I will certainly do so. However, I hope that she will accept that we are engaged in a big task. The volume of cases is enormous and they are sometimes complex and not straightforward. When that is the case, there will be delays. However, we are trying very hard to improve the system overall.
  Question put and agreed to.
  Adjourned accordingly at twenty-seven minutes to Eleven o'clock.