Sitting of 3 November 1988

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

PRIVATE BUSINESS
CITY OF LONDON (SPITALFIELDS MARKET) BILL (By Order)
Order for Third Reading read.
To be read the Third time on Tuesday 8 November.
NORTHAMPTON BILL [Lords] (By Order)
Order for Third Reading read.
To be read the Third time on Thursday 10 November at Seven o'clock.
TEIGNMOUTH QUAY COMPANY BILL (By Order)
YORK CITY COUNCIL BILL [Lords] (By Order)
CARDIFF BAY BARRAGE BILL (By Order)
FALMOUTH CONTAINER TERMINAL BILL (By Order)
Orders for Second Reading read.
To be read a Second time on Thursday 10 November.
RIVER HUMBER (BURCOM OUTFALL) BILL [Lords] (By Order)
PORT OF TYNE BILL [Lords] (By Order)
AVON LIGHT TRANSIT BILL [Lords] (By Order)
Orders for Second Reading read.
To be read a Second time on Tuesday 8 November.

ASSOCIATED BRITISH PORTS (No. 2) BILL
NORTH KILLINGHOLME CARGO TERMINAL BILL
Orders read for consideration of motions.
To be considered on Tuesday 8 November at Seven o'clock.

Oral Answers to Questions
  HOME DEPARTMENT

    Sunday Trading
    Mr. John Marshall: To ask the Secretary of State for the Home Department if he will make a statement on the number of convictions for breaches of Sunday trading law over the past three years.
    The Minister of State, Home Office (Mr. Tim Renton): The total number of convictions for Sunday trading offences in 1985, 1986 and 1987 were 604, 559 and 550 respectively. Figures are not yet available for 1988.
    Mr. Marshall: I thank my hon. Friend for his answer. Does he agree that a law that is frequently broken, rarely enforced and quite illogical should be reformed root and branch as a matter of urgency?
    Mr. Renton: I certainly agree with my hon. Friend. As he says, the law is out of date, shot full of anomalies and, at best, unevenly enforced. That is why we have consulted many groups to see whether there is a broad consensus for reform.
    Mr. Alton: Will the Minister take account of the large body of opinion, both in the country and in the House, that does not wish to see Sunday made into any other day, and wants to see it kept special? Will he take those views into account before bringing forward any legislation?
    Mr. Renton: I appreciate what the hon. Member says, but there are many ways of keeping Sunday special. Many people may find that they could, for example, combine going to a shop with going to church without ceasing to make Sunday a special day.
    Sir Charles Morrison: In the light of my hon. Friend's entirely sensible remarks about existing Sunday law, will he also consider the law affecting Sunday sport, particularly as every Sunday during the summer, and often during the winter, every sport or body of sport breaks the law in order to meet public need?
    Mr. Renton: I hear with sympathy what my hon. Friend says and shall certainly bear his comments in mind.
    Mr. Pike: Will the Minister recognise that the House expressed a view on the issue not all that long ago? Is it not wrong for his Department to wash its hands of the matter and leave it to local authorities to interpret the law as they wish? Should he not send a letter to local authorities advising them how the existing law should be administered and enforced?
    Mr. Renton: Certainly not. Clearly, in the Shops Act 1950 Parliament vested in local authorities the job of enforcing the law. As my right hon. and learned Friend the Attorney-General recently made clear, that is what we expect them to do. The hon. Member for Burnley (Mr. Pike) should bear in mind that on the previous occasion at which there was an attempt to reform Sunday trading laws every Labour Member voted against, including the Scottish Labour Members, who have enjoyed total deregulation in their constituencies for many years. When

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    does the hon. Member for Burnley think that his Scottish colleagues will help their English counterparts to act legally when they go shopping on Sundays?

    Firearms Amnesty
    Sir Michael McNair-Wilson: To ask the Secretary of State for the Home Department whether he will make a statement on the result of the recent firearms amnesty.
    Mr. Gerald Bowden: To ask the Secretary of State for the Home Department how many weapons have been recovered under the recent firearms amnesty; and if he will make a statement.
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): The firearms amnesty held in England and Wales in September netted 42,725 firearms and 1,511,000 rounds of ammunition. Some 4,280 other offensive weapons were also handed in to the police. This response compares very favourably with the last appeal made in 1968, when some 25,000 firearms and 795,000 rounds of ammunition were surrendered. The outcome of the amnesty represents a substantial success in removing from circulation those illegally held and unwanted guns, which might otherwise have fallen into irresponsible or criminal hands.
    I shall publish in the Official Report a summary of firearms, ammunition and other weapons surrendered to the police during the amnesty, by police force area.
    Sir Michael McNair-Wilson: The House will be delighted to have those figures. Has my hon. Friend any theory to explain why the amnesty, although of only a month's duration, was so much more successful than the one in 1968? Does he think that it owes anything to a reaction against what happened in Hungerford in the summer of 1987?

    Summary of firearms and other weapons and ammunition surrendered to the police during the firearms amnesty September 1988 by police force area

    England and Wales

    Number of items surrendered

    Total firearms

    Police force area

    Firearms

    Shotguns

    Other firearms

    All

    Total other weapons

    Total rounds of ammunition

    Avon and Somerset

    832

    378

    239

    1,449

    76

    46,096

    Bedfordshire

    213

    285

    100

    598

    6

    10,901

    Cambridgeshire

    284

    201

    86

    571

    112

    23,973

    Cheshire

    492

    214

    178

    884

    95

    24,999

    Cleveland

    164

    90

    86

    340

    15

    11,007

    Cumbria

    291

    249

    62

    602

    37

    26,162

    Derbyshire

    345

    172

    100

    617

    56

    17,159

    Devon and Cornwall

    1,284

    808

    321

    2,413

    539

    104,441

    Dorset

    686

    349

    256

    1,291

    199

    62,355

    Durham

    216

    79

    84

    379

    25

    10,335

    Essex

    676

    397

    190

    1,263

    64

    130,000

    Gloucestershire

    381

    203

    80

    664

    50

    29,867

    Greater Manchester

    703

    198

    510

    1,411

    46

    51,149

    Hampshire

    1,219

    566

    404

    2,189

    176

    83,426

    Hertfordshire

    418

    135

    166

    719

    165

    37,227

    Humberside

    302

    141

    118

    561

    159

    18,069

    Kent

    812

    369

    201

    1,382

    136

    52,124

    Lancashire

    581

    299

    253

    1,133

    234

    40,813

    Leicestershire

    455

    208

    138

    801

    172

    34,308

    Lincolnshire

    420

    274

    142

    836

    129

    32,352

    London, City of

    23

    2

    4

    29

    —

    6,507

    Merseyside

    563

    172

    310

    1,045

    67

    28,266

    Metropolitan Police District

    2,092

    545

    897

    3,534

    12

    117,112

    Norfolk

    419

    348

    110

    877

    26

    27,204

    Northamptonshire

    249

    124

    122

    495

    34

    15,085

    Northumbria

    649

    188

    201

    1,038

    2

    57,036

    North Yorkshire

    471

    356

    106

    933

    62

    24,133

    Nottinghamshire

    417

    175

    171

    763

    114

    17,873

    Mr. Hogg: I think that my hon. Friend is right. The tragedy at Hungerford focused attention on the unlawful possession of firearms. I also think that the amnesty's success was one of the consequential advantages of the Firearms Bill, which received its approval in the House last night.
    Mr. Bowden: I know that the public at large will be reassured by what my hon. Friend has said about the success of the firearms amnesty. Could he now give additional reassurance by saying when the increased penalties provided by the Criminal Justice Act 1988 for crimes committed by someone carrying a firearm will be implemented?
    Mr. Hogg: Provisions in the Criminal Justice Act 1988 that came into force at the end of September raise the maximum sentence for illegal possession of a shotgun to three years' imprisonment following conviction on indictment, and the maximum sentence for carrying firearms while committing a crime to life imprisonment.
    Mr. Tony Banks: I agree that there is an amazing collection of surrendered weapons and ammunition: perhaps we can expect a reduction in the Defence Estimates because of it.
    I know that this is probably a difficult question, but in view of the number and range of weapons collected, has the Department any idea how many are still around, perhaps waiting to be collected?
    Mr. Hogg: The weapons were held unlawfully and without certificate. It is therefore not possible to say how many are still held unlawfully and without certificate.
    Following is the information:

    Total firearms

    Police force area

    Firearms

    Shotguns

    Other firearms

    All

    Total other weapons

    Total rounds of ammunition

    South Yorkshire

    342

    116

    96

    554

    131

    17,943

    Staffordshire

    314

    197

    145

    656

    39

    19,131

    Suffolk

    418

    347

    111

    876

    57

    28,906

    Surrey

    681

    269

    149

    1,099

    50

    128,000

    Sussex

    1,043

    417

    395

    1,855

    133

    57,044

    Thames Valley

    893

    429

    248

    1,570

    165

    51,334

    Warwickshire

    233

    125

    59

    417

    124

    17,648

    West Mercia

    656

    383

    169

    1,208

    169

    56,626

    West Midlands

    708

    236

    329

    1,273

    235

    49,984

    West Yorkshire

    607

    198

    352

    1,157

    120

    19,361

    Wiltshire

    384

    204

    127

    715

    37

    35,865

    Dyfed Powys

    322

    246

    27

    595

    34

    20,108

    Gwent

    205

    100

    52

    357

    24

    15,063

    North Wales

    359

    247

    86

    692

    95

    19,938

    South Wales

    532

    215

    137

    884

    59

    33,777

    All forces

    23,354

    11,254

    8,117

    42,725

    4,280

    11,511,000

    1 Estimate.

    Rural Violence
    Mr. Burns: To ask the Secretary of State for the Home Department if he will make a further statement on action taken by the Government to curb rural violence.
    The Secretary of State for the Home Department (Mr. Douglas Hurd): I have reminded the police and courts of their powers—both the original ones and now the increased ones—for dealing with outbreaks of disorder and infringements of the licensing laws, and have asked them to arrange for swift prosecutions and court hearings after outbreaks of hooliganism and disorder. I have also approved pilot projects in seven areas, Coventry being the first, to test the effectiveness of byelaws making it an offence to drink alcohol in designated public places.
    Mr. Burns: I am grateful to my right hon. Friend for his answer. Will he confirm that the Licensing Act 1988 has given magistrates new powers to punish irresponsible licence holders? Will he also comment on what progress may or may not have been made in considering income-related fines to bring home to young, affluent people who have too much money and too little sense that the Government really mean business in curbing rural violence and loutish behaviour brought about by drinking?
    Mr. Hurd: I entirely agree with my hon. Friend's second point. It is very important that in each case the courts should have the information that enables them to make the fine bite as they want it to bite. We are trying to arrange that that is increasingly so.
    My hon. Friend's first point is entirely right. The Licensing Act 1988 gives magistrates new powers, for example to restrict the drinking hours in discos and to revoke a licence while it is current; in addition, of course, to strengthening the law against under-age illegal drinking.
    Mr. Campbell-Savours: I have received a number of letters from people in Cockermouth in my constituency who are angry about the police's failure to deal with rural drunkenness, irresponsibility and violence in that area. When I approached the police, they said that they needed more officers in the county. May I have an assurance that when more places are available the money will be spent in
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    Cumbria and that such problems will be resolved? Or does the Home Secretary intend to do what he has done in the past—nothing—and allow these problems to persist?
    Mr. Hurd: It is always difficult to know where to start with the hon. Gentleman. Even in the short time during which I have been Home Secretary, we have had a further record increase in the number of police in England and Wales. At a conference in Brighton not long ago I was able to announce a further increase of 1,100, which is a record on top of a record. I was also able to announce a further and substantial programme in the years to follow. We judge applications from police authorities as they come in, and when we receive the Cumbrian application I shall bear in mind what the hon. Gentleman has said.
    Mr. Alexander: Further to the question asked by the hon. Member for Workington (Mr. Campbell-Savours), is my right hon. Friend able to say that the Nottinghamshire police authority has all the police that it requires? Is he aware that, for example, at Southwell Minster, in my constituency, graves are regularly vandalised, and people in the area are desperate to have enough policemen to ensure that that does not happen?
    Mr. Hurd: The police have received a bigger increase in resources in real terms than any other public service. It is important that that increase should continue and that a record should be piled on top of a record. It is for the chief constable in each police force area to decide how to allocate his men. I am sure that the chief constable in Nottinghamshire will note what my hon. Friend has said about the county. We shall continue to preside over and administer a programme of steady increases in the police forces of England and Wales.
    Mr. Corbett: The right hon. Gentleman says that there is a record piled on a record, but is there not a further record—the record amount of violent crime on our streets in both rural and city areas, which increased by 12 per cent. last year alone? Does the Home Secretary not understand that it is not pious words but extra feet on the beat which are needed to combat the continuing and growing violence in rural and city areas? While he is at it, can the right hon. Gentleman explain why these loadsamoney lager louts behave in this way?
    Mr. Hurd: The hon. Gentleman will have noticed and, I am sure, given publicity to, the substantial achievements of the West Midlands police in reducing crime. He will have noticed that that force is among the pioneers who are finding the best ways to detect and deal with crime. The hon. Gentleman represents an area with an extremely good police force which is achieving substantial results in the reduction of crime. I am sure that he fully supports and encourages that.
    The hon. Gentleman will provide his own answer to the second part of his question. I simply note that, whereas a couple of years ago the Opposition Front Bench said that all such crime was the result of poverty and unemployment, it now appears that the Marxist explanation has changed. I do not find either sociological reason particularly persuasive.

    Association of Chief Police Officers
    Mr. Leigh: To ask the Secretary of State for the Home Department when he last met the Association of Chief Police Officers; and whether he will make a statement on what was discussed.
    Mr. Douglas Hurd: I hold many meetings with the officers and committees of ACPO. The most recent was with members of the ACPO traffic committee on 24 October. The matters that we discussed included police breath-testing powers and the enforcement of road traffic law.
    Mr. Leigh: With almost 5,000 police officers recruited in non-metropolitan areas since 1979, no one can doubt the Government's commitment to giving the police resources to deal with rural crime. However, when my right hon. Friend last met the association, did he make it clear that, having shown our commitment, Conservative Members demand from the police productivity, value for money and, above all, the concentration of resources on dealing with crimes against the person and property?
    Mr. Hurd: My hon. Friend is right. He simply emphasises what I said a few moments ago. We have a steadily expanding programme for the police, but, before we consider demands from particular forces, we must ask whether the taxpayer and ratepayer are already getting value for money. I am greatly helped in that by the Inspectorate of Constabulary and am glad to say that an increasing number of police forces are innovating and using civilians, who cost half as much, for jobs that were previously done by uniformed officers and are finding new ways of streamlining their procedures and coping more effectively with the wide range of tasks that increasingly fall upon the police.
    Mr. Ashton: Is it not a fact that police chiefs have said that the new registration scheme for football supporters is nothing but a fig leaf and that it will not stop hooliganism, which takes place on the way to the grounds rather than inside the grounds? The Government's attitude towards rural violence differs from their attitude towards football supporters. They are insisting on a registration scheme that will do a great deal of damage to the game and its finances and will have little effect on the national crime figures.
    Mr. Hurd: I do not understand the logic of the hon. Gentleman's view. It is true that much hooliganism takes
    1170
    place on the way to and from the football ground. That is one reason why we have drawn the attention of the licensing justices to their powers temporarily to close premises, such as off-licences and pubs, in such circumstances. However, there is no reason why we should not deal effectively with the other problem in the grounds. The scheme that will be produced by my hon. Friend the Minister with responsibility for sport—I do not think that the hon. Gentleman has yet seen the details—will be designed to deal with those problems.
    Mr. Hill: During my right hon. Friend's discussions with the chief police officers, will he once again try to revive the neighbourhood watch scheme in Hampshire? I have had words with the newly appointed chief constable, and the police say that they are 135 under establishment. That is one reason why they are unable to co-ordinate quite as well as they should with neighbourhood watch schemes. In some areas, such as large estates, there is a problem of co-ordination, because too few people wish to take part in the schemes.
    Mr. Hurd: The neighbourhood watch scheme movement has grown so fast—there are now about 60,000 schemes, whereas six years ago there were only two—that the police have a problem in deciding how to keep in touch with them, which is essential for the success of the scheme. My hon. Friend is right. It does not necessarily follow that all that must be done by uniformed police officers. In some areas of London it is being done by civilians working with the police. In other areas, such as West Yorkshire, it is being done by special constables. That is one area where the police can usefully innovate.
    Mr. Hattersley: Will the Home Secretary say how many chief constables at his most recent meeting had outstanding applications to him for increases in their forces? Is it not a fact that more than 50 per cent. of them have applications for increased establishments, which the Home Secretary has refused?
    Mr. Hurd: It is probably true that about that number have outstanding requests, but they know perfectly well that they are not refused. We carry on the applications into the next year and consider them. Thanks to the arrangements made with the Chief Secretary to the Treasury, I now have slightly more resources for next year, but they will be difficult to allocate. We are piling a record on a record. This service will continue to have a higher increase than any other public service, but it will be tight, and that is why the supplementary question of my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) is to the point.

    Robbery (Sentences)
    Mr. Nicholas Bennett: To ask the Secretary of State for the Home Department what has been the change in the last year in the average sentence for robbery; and if he will make a statement.
    The Minister of State, Home Office (Mr. John Patten): The average sentence imposed on men over 21, on conviction of robbery, has increased by 9 per cent. in the last year and by 22 per cent. since 1984.
    Mr. Bennett: I thank my hon. Friend for that welcome news. I welcome the decision of the inquest jury in the

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    recent case in which two armed robbers were shot dead by the police after being warned to surrender their weapons. Does he agree that those who go armed for robbery must be aware of the consequences of their actions and should desist from such actions?
    Mr. Patten: Anyone who goes out armed for robbery faces, on conviction, the risk of life imprisonment. The Criminal Justice Act 1988 strengthens that by making life imprisonment the punishment for anyone who carries a firearm in the conduct of crime.
    Mr. Grocott: Will the Minister confirm that most thefts, apart from those that feature in sensational headlines, involve sums of less than £100? Will he confirm also that the cost of imprisonment is at least £250 a week? Would it not make more sense to concentrate on compensating the victims of crime and on non-custodial sentences, which are much less expensive and often much more effective in preventing the recurrence of offences?
    Mr. Patten: The hon. Gentleman is right. The cost of keeping someone in prison is about £240 a week. I am sure that the hon. Gentleman welcomed the recently introduced new provisions for compensation in the Criminal Justice Act 1988 and in a recent circular issued by my right hon. Friend the Home Secretary. I agree with the hon. Gentleman that the possibility of punishment within the community for less serious, non-violent offenders is probably a much better deal for the community. Our proposals are contained in my right hon. Friend's recently published Green Paper.
    Mr. Hind: Given the increased level of offences of robbery, does my hon. Friend not feel that it is time that we took a close look at the remand centres that have been built in the United States in inner cities and close to the courts? That reduces the cost of transportation from prisons to the courts and frees the places that we have in our prison system for those who have been convicted and require long sentences of imprisonment. We need new designs and new thinking.
    Mr. Patten: We are already producing new designs and new thinking is taking place. That thinking is encompassed in my right hon. Friend's Green Paper, which was published in July. Passages in that document ask a series of questions about the possibility of introducing private management and private construction into the building of remand centres.
    Mr. Skinner: What sort of sentences should apply to City financiers who are intent on robbery, who arm themselves with bogus portfolios and kid on thousands of old-age pensioners? They are supported by Department of Trade and Industry Ministers, which means that they can continue their bogus business and rob people. Should not the Government round up and concentrate on these people?
    Mr. Patten: The hon. Gentleman's attack on my right hon. and hon. Friends who are Department of Trade and Industry Ministers is perfectly monstrous and totally without foundation. It is—[Interruption.] I believe that loutish behaviour is unparliamentary, Mr. Speaker, but we are seeing it on the Opposition Benches. It is for the courts to decide what sentences to impose for City fraud. The
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    hon. Gentleman has forgotten that in the Criminal Justice Act 1988 we increased the penalty for insider trading from two years' imprisonment to seven years.

    Video Recordings Act 1984
    Mr. Butler: To ask the Secretary of State for the Home Department what steps his Department is planning to secure the better enforcement of the Video Recordings Act 1984; and if he will make a statement.
    Mr. Renton: In the Criminal Justice Act 1988 we have provided powers for local authority trading standards officers to enforce the Video Recordings Act 1984. We are also discussing with the trade associations how video dealers can be made more fully aware of their obligations under the Act.
    Mr. Butler: When my hon. Friend meets representatives of the video trade, will he discuss with them how jointly they may clamp down on cowboys who deal in degrading filth?
    Mr. Renton: Yes. I have already met representatives of the trade and my right hon. Friend the Home Secretary is planning to meet them shortly. It is the sort of subject that we discuss with them. I emphasise that progress is definitely being made. Now that the Video Recordings Act is fully in force, all videos except for a few categories, such as religion and education, must be classified. There is a fine of up to £20,000 for selling an unclassified video recording. I assure my hon. Friend that progress is being made in achieving the aims that he has in mind.
    Mr. Randall: Does the Minister agree that if the number of prosecutions is anything to go by, enforcement is not working satisfactorily? Is it not hypocritical of the Government to advocate improved viewing standards that will reduce the showing of sex and violence without making more cash available to cash-strapped local authorities for enforcement? The Minister cannot have it both ways.
    Mr. Renton: The hon. Gentleman is quite wrong. The Criminal Justice Act 1988 gives local trading standards officers powers relating to videos similar to those that apply to other aspects of their work—[Interruption.] The hon. Gentleman should wait for a moment. The enforcement powers began only last month, but information shows that they are already having an effect. So far this year the British Board of Film Classification has issued 48 certificates in connection with proceedings under the Video Recordings Act 1984 and is now examining almost 500 video works for the same purpose, yet it is only a month since local trading standards officers were given those powers.

    Offensive Weapons
    Mr. Gill: To ask the Secretary of State for the Home Department what steps his Department has taken to prevent the manufacture and supply of offensive weapons; and if he will make a statement.
    Dr. Twinn: To ask the Secretary of State for the Home Department what steps his Department has taken to prevent the manufacture and supply of offensive weapons; and if he will make a statement.
    Mr. Douglas Hogg: We have taken powers in the new Criminal Justice Act enabling the Secretary of State to specify, by affirmative order, weapons that it will be an offence to manufacture, sell, import, hire, give or lend. The purpose of this provision is to take out of circulation altogether weapons that have no legitimate use. A draft order specifying 14 martial arts and other weapons was brought before Parliament for approval on 19 October.
    Mr. Gill: What possible legitimate justification can there be for the continued sale and manufacture of crossbows—a fairly recent phenomenon which the public increasingly feel to be a menace, not just to human, but to animal life?
    Mr. Hogg: My hon. Friend will recall that last year we tackled the problem of crossbows through legislation and increased controls over them. We intend to review legislation on crossbows to determine whether any further changes need to be made.
    Dr. Twinn: I congratulate my hon. Friend and his colleagues on the action they have taken to reduce the threat from knives and other weapons. Is he aware that there is still considerable concern about other weapons that will still be freely available? Is he further aware that this week in Enfield borough, which lies within my constituency, catapults are freely available and are being sold from the same shop window as sporting guns? That is of considerable concern to the public.
    Mr. Hogg: I understand my hon. Friend's concern. We considered catapults, but there were two difficulties about putting them on the order. First, they have a legitimate use, as many anglers use them for the distribution of bait. Secondly, it is difficult to make a sensible distinction between catapults made commercially and those made by young people at home.
    Mr. Cryer: Although I endorse the prohibition of minor weapons such as crossbows, may I ask the Home Office to go after the Mrs. Big of offensive weapons, a faded blonde who lives at No. 10 Downing street, who is producing more weapons—
    Mr. Speaker: Order. Such questions do not enhance our proceedings.
    Mr. Cryer: She is touting an international trade in offensive weapons—
    Mr. Speaker: Order. We refer to each other either by ministerial titles or as hon. Members. Please do that.
    Mr. Cryer: She is manufacturing weapons—
    Mr. Speaker: Order. Will the hon. Gentleman kindly rephrase his question?
    Mr. Cryer: Will the Minister take action—[HON. MEMBERS: "Withdraw."]—against the organisers—
    Mr. Speaker: Order. The hon. Gentleman will rephrase his question. I have already asked him to do so.
    Mr. Cryer: In case my question was unclear, I was referring to the Prime Minister as being the head of a Government who are engaged in the international arms trade and who are producing weapons of mass extermination. Surely such matters are of as great a concern to citizens as crossbows.
    Mr. Hogg: The hon. Gentleman's question is unworthy of response.
    Mr. Hoyle: Will the Minister reconsider high-velocity catapults? Is he aware that they have caused deaths, one wilfully? Is he further aware that they have caused tremendous damage in Cheshire, where one school has been severely damaged? I have already written to the hon. Gentleman and I now ask him to give the matter further consideration.
    Mr. Douglas Hogg: I will, of course, give the matter further consideration. The hon. Gentleman has drawn my attention to a particular case. The arguments that I have previously mentioned in the Chamber are persuasive. At the moment, it would not be right to depart from the conclusions that we reached.

    Safer Cities Initiative
    Mr. Sumberg: To ask the Secretary of State for the Home Department what progress his Department has made with its safer cities initiative; and if he will make a statement.
    Mr. Cash: To ask the Secretary of State for the Home Department what progress his Department has made with its safer cities initiative; and if he will make a statement.
    Mr. Hurd: Twenty safer cities projects will be established throughout England over three years, with nine of them during the first year. Wolverhampton, Bradford and Nottingham have already been announced as safer cities areas. Staff have been recruited for the Wolverhampton and Bradford projects, and advertisements for staff for the Nottingham project were placed last week. Detailed discussions on local projects are well advanced in six further areas: Birmingham, Rochdale, Coventry, Hartlepool, Lewisham, and Tower Hamlets.
    Mr. Sumberg: I congratulate my right hon. Friend on his reply and on this splendid scheme. When he reviews it, will he bear in mind that crime is not limited to large cities and inner cities? Therefore, will he consider expanding the scheme to areas such as mine, which would benefit from it?
    Mr. Hurd: My hon. Friend is right. We started with the five towns project, as he knows, and Bolton, which is not far from him, was one example of that, although not what he wants. It is because that was successful in bringing down crime that we have enlarged the project to take in areas of cities in which crime is a particularly serious problem.
    Mr. Loyden: On the question of safety in cities, will the Home Secretary give full regard to the distribution of police forces? In many cases, the outlying areas of cities in which there is a high level of crime are the most neglected. I hate to use the term "working-class", but in working-class areas there appears to be less police concern about criminality. When reviewing crime in cities, will he give full regard to such areas? There should be a better and more equal distribution of police forces on the beat.
    Mr. Hurd: It is for the chief constable of a force area, particularly a big force area such as Merseyside, to decide how to deploy his men. The hon. Gentleman is quite right. Many of the most difficult circumstances and conditions

    1175
    obtain on the edge of cities and not just in what are called the inner cities. The hon. Gentleman will have been pleased to see—I am sure that he has given publicity to it—that crime in Merseyside has been falling.

    Electoral Law
    Mr. Knox: To ask the Secretary of State for the Home Department if he has any plans to introduce legislation to implement the outstanding recommendations of the Speaker's Conference in the 1970–74 Parliament, relating to electoral law.
    Mr. Douglas Hogg: No, Sir. The primary aim of the legislation to amend electoral law, which we intend to introduce in this Parliament, will be to implement our manifesto commitment to extend the period in which British citizens abroad may register as overseas electors.
    Mr. Knox: Do the Government intend to do anything about the 1973–74 Speaker's Conference recommendation to reduce the age at which people can stand for election to the House?
    Mr. Hogg: I know of my hon. Friend's interest in this matter. He was a distinguished member of the Speaker's Conference. The recommendation to which he referred was reached by a vote of 10 to eight. There is no evidence that the public want to be represented by teenagers. We are sometimes accused of behaving as though we were teenagers. The question asked by the hon. Member for Bradford, South (Mr. Cryer) explains why such allegations are sometimes made. I would not wish to add further substance to that charge.
    Mr. Winnick: If it is right to control the amount of money that a candidate can spend during a general election—and it is right and proper that there should be such control—why is there no control on the amount of money that a party can spend nationally?
    Mr. Hogg: Because Parliament has not deemed it necessary.

    Electronic Tagging
    Mr. Anthony Coombs: To ask the Secretary of State for the Home Department where and when he now anticipates the introduction of pilot schemes for the tagging of offenders.
    Mr. Hurd: We shall consult the police and the courts before deciding the areas for the pilot schemes. We expect the projects to begin next summer, monitoring people remanded on bail.
    Mr. Coombs: Given the present overcrowding in prisons, despite a record building programme, and given the fact that it costs £1,000 a month to keep each prisoner in prison, does not electronic tagging represent a golden opportunity, especially for the 20 per cent. of those who are in prison for fine or maintenance default? It would represent a humane, realistic and flexible form of punishment, which will reduce the possibility of re-offending.
    Mr. Hurd: I am grateful to my hon. Friend. He has put the case exactly. We are all concerned about the increase in the remand population of people who have not been
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    convicted of anything. If we can help the magistrates in the courts by providing this extra alternative, it will be well worth trying.
    Mr. Mullin: Are there any plans for the electronic tagging of MI5 agents, since the Home Department seems to have lost track of what some of them are up to? May I commend to the Home Secretary an excellent book published today called "The Wilson Plot' by David Leigh, which will explain what some of them got up to in times gone by?
    Mr. Hurd: The answer to the first question is no. The answer to the second question is that I take note.
    Mr. Speaker: Mr. Latham, Question No. 13.
    Mr. Latham: Lucky 13.

    New Police Station, Oakham
    Mr. Latham: To ask the Secretary of State for the Home Department whether he is now in a position to approve the request by the Leicestershire police authority to proceed with building a new police station in Oakham.
    Mr. Douglas Hogg: Lucky indeed. I am pleased to say that we are now able to give approval for work on the new Oakham police station to start in 1991–92. We shall be notifying the Leicestershire police authority of this very shortly.
    Mr. Latham: That is a nice present for an eye test rebel. I thank my hon. Friend most warmly for that reply. Is he aware that it will be well received in Rutland, where the police station is in a poor condition, and that it shows the Government's commitment to rural policing?
    Mr. Hogg: May I say of and to my hon. Friend that he has been a persistent and determined advocate of the need to build a new police station at Oakham, and that the decision owes much to what he has said and done in this place and elsewhere.

    Police Manpower, Leicestershire
    Mr. Vaz: To ask the Secretary of State for the Home Department if he has received any further representations seeking more police officers in Leicestershire; and if he will make a statement.
    Mr. Douglas Hogg: The police authority wrote on 8 September notifying us of a revised application for 89 police posts subject to the county council's decision on the availability of finance. It has been asked to provide some further detail on the make-up of the new application. It will be considered along with applications that have been received from other authorities for increases in 1989–90.
    My right hon. Friend is able to approve 800 police posts for provincial forces in 1989–90. This is an increase on the 500 that were available for the present financial year. Demand, however, already exceeds this and he will look to Her Majesty's Inspectorate of Constabulary for advice on how the available posts should be allocated. The aim is to announce decisions around December.
    Mr. Vaz: Following the friendly exchange between the Minister and the hon. Member for Rutland and Melton (Mr. Latham) on the previous question, may I ask whether the Minister in aware of the deep outrage and anger in

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    Leicestershire against the Government, and the Home Secretary in particular, because of their failure to allocate a single extra police officer for the entire county in this year's allocation? Is he further aware that earlier this year a petition that was launched in my constituency to open Uppingham road police station on a full-time basis and for more police officers to be allocated to the outer estates has attracted more than 10,000 signatures? How long will the Minister persist in his snubbing of the chief constable and the police authority, which represents both political parties, by his refusal to allocate extra police officers to Leicestershire?
    Mr. Hogg: The hon. Gentleman does himself less than justice. The matter was raised previously in June 1988 in an Adjournment debate initiated by my hon. Friend the Member for Rutland and Melton (Mr. Latham), to whom I have just paid tribute. He will be gratified by the hon. Gentleman's support today. As to the figures, I heard very little that was accurate in what the hon. Gentleman said. He will recall that since 1979 the total manpower available to the Leicestershire force, inclusive of civilians, has increased by 187. He will also know that between 1985 and 1987 the process of civilianisation has increased the number of operational officers by 70, and that the process will increase the operational strength by another 82 officers during the next three years. I am sorry that the hon. Gentleman did not congratulate the chief constable on that.
    Mr. Speaker: Questions Nos. 16, 17, 18, 19, 20, 21, 22.

    Safer Cities Initiative
    Mrs. Hicks: To ask the Secretary of State for the Home Department what progress has been made in developing his Department's safer cities project in Wolverhampton; and if he will make a statement.
    Mr. John Patten rose—
    Mr. Patrick Thompson: On a point of order, Mr. Speaker. May I ask Question No. 21?
    Mr. Speaker: I have called Question No. 22.
    Mr. Patten: Wolverhampton was the first safer cities project to be announced. Since that announcement on 7 April 1988, a local steering committee, including representatives of the council, police, probation and voluntary sector, has been formed. It held its first meeting in July. I am encouraged by the progress that we have made in Wolverhampton. There has been an enthusiastic and energetic response from a wide range of organisations and individuals, and especially from my hon. Friend.
    Mrs. Hicks: I thank my hon. Friend for those comments, which I endorse. Does he agree that one of the most effective crime prevention measures that we can take is to instil in our young people, both at home and at school, a healthy respect for the law? In paying tribute to the junior crime prevention panel in Wolverhampton, I ask what steps have been taken to ensure that young people will be represented on the co-ordinating committees of those excellent schemes?
    Mr. Patten: The junior crime prevention panel in Wolverhampton is doing excellent work, and we encourage the local co-ordinating committees fully to involve it in its work.
    Mr. Speaker: If it was my fault, I will call Question No. 21.

    Gambling
    Mr. Patrick Thompson: To ask the Secretary of State for the Home Department if he has any plans to seek to change the law on gambling.
    Mr. John Patten: Yes. My right hon. Friend announced on 5 October that he proposes by regulation under the Lotteries and Amusements Act 1976 to prohibit "multiple" lotteries and by order to increase monetary limits on individual lotteries under the Act. We keep the law on gambling under review, but have no other immediate plans to change it.
    Mr. Thompson: I am grateful for the opportunity to ask this question. Is my hon. Friend aware of the concern felt in Norwich and elsewhere about young people who go into gambling arcades and get themselves into serious difficulties? Does he propose to give any further thought to this matter or take any action?
    Mr. Patten: I am aware of the concern in Norwich, because of the delegation which my hon. Friend recently led to see me in the Home Office. We have made a recent announcement about our proposals to tighten up—with the co-operation of the gambling industry and of local authorities—access to amusement arcades. We hope and believe that those will have a substantial effect on the limited numbers of young people who suffer from an addiction to gambling.

  PRIME MINISTER

    Engagements
    Mrs. Gillian Shephard: To ask the Prime Minister if she will list her official engagements for Thursday 3 November.
    The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): I have been asked to reply.
    My right hon. Friend is on an official visit to Poland.
    Mrs. Shephard: My right hon. Friend will have noticed in Tuesday's Autumn Statement the announcement that spending on the National Health Service is to increase next year by more than £2 billion—the largest increase ever announced. Does he agree that such an increase demonstrates overwhelmingly this Government's commitment to the continuing success of the National Health Service.
    Mr. Wakeham: My hon. Friend is right. The Autumn Statement demonstrates the commitment to the Health Service. It provides the largest increase in resources ever made to the National Health Service—more than £2 billion in 1988–89. Full funding has been provided for the nurses' pay, and in real terms that is an increase of more than 45 per cent. under this Government. The biggest building programme in the history of the National Health

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    Service is under way and record levels of patient care are being achieved. The contrast with the Labour Government could not be more marked. Their words cannot disguise their actions when they were in power. It was Labour that cut nurses' pay and the hospital building programme.
    Mr. Hattersley: Are the Government confident that charging for optical tests will not be a deterrent to examination, as the Minister of State, Department of Health hopes, or did the Under-Secretary of State for Health reflect the official view when she said on television last night that charging might well be a deterrent?
    Mr. Wakeham: I thought that the right hon. Gentleman would at least take the trouble to look at what my hon. Friend said in full rather than what she said in the reports in some—[Interruption.]—at what my hon. Friend was reported as saying in some of the papers. My hon. Friend was clearly making the point that it would be commercial suicide for opticians to charge a fee for sight tests at a level that would drive away customers for spectacles. Three out of four sight tests result in a prescription for glasses. What my hon. Friend said was perfectly sensible and I support it.
    Mr. Hattersley: I have the transcript, which clearly reveals that the Under-Secretary of State said that charges might be a deterrent, but on the other hand they might not. Was not the truth of the matter revealed by the Minister of State in the House in the early hours of Wednesday morning—that the Government have no idea whether they will or will not be a deterrent? In fact, the Government do not know whether they are cutting back on eye tests, and they do not care.
    Mr. Wakeham: The Government do not believe that such charges will be a deterrent. We have had two very good debates on the issue in the House. Each time the Government have won the argument and the vote that followed. The right hon. Gentleman does not like to accept that. He will have to wait to see what happens down the Corridor. The right hon. Gentleman will try to have it both ways. If the Government win he will say that it is undemocratic, and if the Government lose he will say that it is a triumph for democracy. He cannot have it both ways.
    Sir Anthony Grant: Will my right hon. Friend please ask all Ministers to speed up the replies that they give to letters from hon. Members? In particular, will he ask my right hon. Friend the Secretary of State for the Environment to reply to two requests that he has received from me on behalf of my hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) and me, to which we have not had the courtesy of a reply?
    Mr. Wakeham: If my hon. Friend has not had a reply to his letter I shall look into it and see what can be done. It is timely that my hon. Friend should remind us that it is important that all Ministers reply to letters as speedily as possible. I hope that my hon. Friend will ask me the same question in a year's time and that there will be an improvement where there has been any shortcoming.
    Mr. Ashdown: Is the Leader of the House aware that the United States Government have now refused to supply key software to British universities because they refuse to take action on end users, which his Government have described as illegal under international law and an infringement of
    1180
    British sovereignty? We all know that the Government have refused to stand up to the United States Government in protecting British industry. Will he now stand up to the United States Government in protecting British universities and academic freedom?
    Mr. Wakeham: The relationship between the British Government and the United States Government is a good, long-standing and enduring relationship. Any difficulties that there might be in any particular instance can be dealt with through negotiation between the two Governments.
    Mr. Bowis: Will my right hon. Friend find time to study Mr. Dukakis's criticism of the British legal system and courts? Does he agree that either that gentleman is muddle-headed or mischievous, and in either case there is a question mark over his judgment?
    Mr. Wakeham: I have no wish to make any comments about the United States presidential candidates on either side at this time. I am sure that if any presidential candidate studies the United Kingdom's justice system he will find that it does not match up with some of the reported comments.
    Mr. Bell: To ask the Prime Minister if she will list her official engagements for Thursday 3 November.
    Mr. Wakeham: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave recently.
    Mr. Bell: Can the Lord President of the Council tell the House why the Cabinet met on Tuesday morning, agreed public expenditure of £167,000 million, agreed a welcome £2,000 million for the Health Service, agreed a balance of payments deficit of £13,000 million, agreed a contingency of £9,000 million, and then reassembled here late at night and in the early hours of the morning to take three quid from the pockets of our constituents for dental checks and ten quid from their pockets for eye tests?
    Mr. Wakeham: The hon. Gentleman gives an inaccurate account of a Cabinet meeting at which he was not present, and an inaccurate account of a meeting of the House at which he was present. At the Cabinet meeting in the morning we approved this year's Autumn Statement. That Autumn Statement shows the success of the Government's policies. Spending on priority programmes continues to grow. Total public spending as a share of gross domestic product is lower than it has been for 20 years and we are repaying the national debt. We have taken firm action to ensure that inflation resumes its downward path next year. Strong investment growth is adding to capacity, which will boost exports, discourage imports and help to reduce the current account deficit. All this will happen in the ninth successive year of economic growth. Any Labour Government would have been proud indeed to announce programmes of that kind, but they never did.
    Mr. John Browne: To ask the Prime Minister if she will list her official engagements for Thursday 3 November.
    Mr. Wakeham: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Browne: Will my right hon. Friend support the drive against leaded fuel, highlighted in today's Daily Mail? Is he aware that although we appreciate Government action to date in terms of publicity and petrol tax incentives, we expect far more decisive and speedy action? Will he think in terms of legislation to set maximum percentage sales levels for leaded fuel, which would decrease into the future?
    Mr. Wakeham: I agree that this is an important subject. The Government are playing a major part in the campaign to persuade motorists to switch to unleaded petrol. I urge all drivers to find out whether their cars can run on unleaded petrol. I am delighted to say that mine can and does. I hope that the industry will ensure that the clearest possible information is given to assist motorists in this.
    Ms. Ruddock: Does the right hon. Gentleman agree with the British ambassador to Dublin that nuclear power is popular in Britain, and will he confirm the ambassador's assertion that a possible sight for a nuclear power station has been considered in east London?
    Mr. Wakeham: The Government are strongly committed to nuclear power and in that, I believe, we have the overwhelming support of the British people, but I am certainly not getting involved in discussing sites for nuclear power stations.
    Mr. McCrindleTo ask the Prime Minister if she will list her official engagements for Thursday 3 November.
    Mr. Wakeham: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. McCrindle: Will my right hon.Friend join me in suggesting to those nurses who have a grievance about their grading that the way to overcome the problem is to use the appeals machinery that has been introduced, rather than to contemplate industrial action? Does he further agree that the British taxpayer will find it curious if, having met the bill for the largest ever wage settlement for nurses, the result were a diminution rather than an enhancement of patient care?
    Mr. Wakeham: I agree very much with my hon. Friend. I am sure the public recognise that the great bulk of the nursing profession are very satisfied with the generous and well-deserved settlement. On average, even after inflation, nurses' pay is 45 per cent. higher than in 1979. That compares with a cut of 21 per cent. under the Labour Government. I am afraid that it is typical of some trade unions to prefer industrial action to sticking to agreements that they have reached, whether about the grading structure itself or about the way in which grading disputes should be handled.
    Mr. Mallon: Is the right hon. Gentleman aware that basic essentials such as food, heat and electricity cost 30 per cent. more in Northern Ireland than in other regions, with the result that many people will not be able to put food on the table in the winter? Are the Government intent on tampering with the right to eat in the same way as they are tampering with the right to silence, the right to free speech and the right to a free and open franchise?
    Mr. Wakeham: The hon. Gentleman gives a one-sided account, although I accept that there are many problems in Northern Ireland. The hon. Gentleman put the same question to my right hon. Friend the Secretary of State for Social Security the other day, and I have nothing to add to what my right hon. Friend said.
    Mr. Hannam: To ask the Prime Minister if she will list her official engagements for Thursday 3 November.
    Mr. Wakeham: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Hannam: Is my right hon. Friend aware of the growing public demand for higher standards in broadcasting, especially with regard to violence and pornography on the screen? Will he ensure that proper safeguards are built into the future deregulation of broadcasting to protect viewers against what could be a flood of undesirable material?
    Mr. Wakeham: My hon. Friend is right, and it was in response to the increasing public concern about the portrayal of sex and violence on television and radio that the Government decided to set up the Broadcasting Standards Council, which will serve as a focus for public concern on these matters. The need to maintain proper standards of taste and decency has been taken fully into account in our preparation of the White Paper on broadcasting, which will be published shortly.
    Mr. Faulds: After the disturbing scenes at the Nuremberg rally at Brighton a couple of weeks ago, when do the Government intend to introduce uniforms for their followers?
    Mr. Wakeham: I have a feeling that the hon. Gentleman would like to be wearing a uniform, and a year or two ago he might have looked quite smart in it. I have to tell him that we have no such plans.
    Mr. David Porter: To ask the Prime Minister if she will list her official engagements for Thursday 3 November.
    Mr. Wakeham: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Porter: Will my right hon. Friend acknowledge the warm welcome given by most East Anglians to this week's Autumn Statement and in particular that part which gives extra money to sea defence spending, coast protection and flood prevention? Will he confirm that it is Government policy that flood prevention is a national undertaking and not merely a local problem?
    Mr. Wakeham: As a Member representing an east coast constituency, I share my hon. Friend's pleasure at the fact that my right hon. Friend the Chancellor of the Exchequer has given priority to improving our flood defences, and an extra £25 million per annum was announced in the Autumn Statement. We believe that local communities are the best judges of sea defence priority and costs, but the Government recognise that the expenditure can be heavy, and thus contribute substantial grant-aid to water authorities undertaking sea defence works.

Business of the House
3.30 pm
Mr. Frank Dobson: May I ask the Leader of the House whether he will state the business of the House for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Wakeham): Yes, Sir. The business for next week will be as follows:
MONDAY 7 NOVEMBER—Committee and remaining stages of the Rate Support Grants Bill.
TUESDAY 8 NOVEMBER—Motion on the Criminal Evidence (Northern Ireland) Order.
The Chairman of Ways and Means has named opposed private business for consideration at 7 o'clock.
Consideration of Lords amendments to the Copyright, Designs and Patents Bill [Lords].
WEDNESDAY 9 NOVEMBER —Consideration of Lords amendments to the Housing Bill.
Consideration of Lords amendments to the School Boards (Scotland) Bill.
THURSDAY 10 NOVEMBER—There will be a debate on a motion to take note of the draft revised guidelines for handling Members' representations in immigration cases.
The Chairman of Ways and Means has named opposed private business for consideration at 7 o'clock.
Remaining stages of the Road Traffic Bill [Lords], the Road Traffic (Consequential Provisions) Bill [Lords] and the Road Traffic Offenders Bill [Lords], which are consolidation measures.
Motion on the Consumer Protection Act 1987 (Commencement No. 2) Order.
FRIDAY II NOVEMBER—There will be a debate on housing and homelessness on a motion for the Adjournment of the House. The Environment Committee's Second Report Session 1987–88 so far as it relates to homelessness will be relevant to the debate.
MONDAY 14 NOVEMBER—There will be debates on motions to take note of EC documents on safety in the workplace and personal protective equipment, on tar yields of cigarettes and the labelling of tobacco products, and on waste from the titanium dioxide industry. Details of the EC documents concerned will be given in the Official Report.
The House may also be asked to consider any Lords amendments and messages which may be received.
[Monday 14 November 1988 (3 separate debates), Relevant European Community Documents: (a) 5211/88 Health and safety in the workplace; (b) 5762/88 Personal protective equipment; (c) 4192/88 Labelling of tobacco products; (d) 4193/88 Control of maximum tar yield of cigarettes; (e) 6387/83 Titanium dioxide industry wastes; (f) 7733/84 Titanium dioxide waste pollution.
Relevant Reports of European Legislation Committee: (a) HC 43-xxiv (1987–88) paragraph 3; (b) HC 43-xxxiv . (1987–88) paragraph 2; (c) HC 43-xix (1987–88) paragraph 1; (d) HC 43-xix (1987–88) paragraph 2; (e) HC 78-viii (1983–84) paragraph 6; (f) HC 78-xxxiv (1983–84) paragraph 3, HC 43-xxxiv (1987–88 ) paragraph 1 and HC 43-xxxv (1987–88) paragraph 1.]
Mr. Dobson: Why is there no proposal for an Opposition day this week? This parliamentary year is about 25 per cent. longer than the average parliamentary
1184
year, so, in equity, the Opposition should have got five extra Opposition days to match the increase in time available for Government business.
Even if the Leader of the House now has so little time left in this Session to meet his obligations to the Opposition, will he turn his attention in the forthcoming Session to all aspects of his official job description? The list of ministerial responsibilities issued by the Cabinet Office states that the Leader of the House
"should uphold the rights and privileges of the House as a whole."
Will the right hon. Gentleman either do that or get the Cabinet Office to change the job description?
While considering his obligations to the House, will the right hon. Gentleman also consider his obligations to Britain, and in particular to the people of Scotland? Last week, I named four Tory Members who took part in the debates on the Housing (Scotland) Bill and on the poll tax in Scotland. My hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) has written to no fewer than 17 of the right hon. Gentleman's Tory colleagues who have asked questions at Scottish Question Time asking them whether they would take up places on the Select Committee on Scottish Affairs.
Surely, with such breadth of talent available to him, the Leader of the House should be able to use his influence to get at least four of his hon. Friends to serve on that Committee. Earlier this week, the Tory Whips worked hard to deprive people of free eye tests; could they put their threatening talents to work again, at least to bring the Scottish Select Committee into action? We would rather that happened than have a debate about why the right hon. Gentleman has failed to constitute the Committee.
Have the Government now agreed that the House will be given an opportunity in Government time to hold a separate debate and vote on the failure to uprate child benefit? As we said last week, the usual omnibus debate on all the benefits is an inadequate way of dealing with this matter.
Finally, arising from last night's debate, will the right hon. Gentleman arrange for the Home Secretary to make a statement to clear up the confusion created last night by the conflict between what he and the Minister of State said about who may or may not be interviewed live on television and radio in the context of terrorism? The Home Secretary owes that clarification to the House and the broadcasters.
Mr. Wakeham: The hon. Gentleman raised four questions about next week's business. First, I congratulate him on his re-election to the shadow Cabinet with, I gather, one or two more votes than he managed lo get the year before. I hope that his performances on Thursdays have helped him in his endeavours.
I regret that it has not been possible to find an Opposition day. We have much important business next week, but the Standing Orders clearly provide that 20 days shall be allotted in each Session to proceedings on Opposition business. We have already provided the Opposition with one additional day, and in accordance with the wishes of the minority parties we have agreed to carry over one of their days to the next Session. I regret to say that the Opposition do not receive fewer Opposition days in a Session which is shorter than average.
We have had a number of exchanges about Scotland in recent months; I want to move the debate on a bit further.

1185
I would welcome such a debate, but, unfortunately, it has not been possible to find the time. I have given an undertaking, and the discussions are best resolved through the usual channels.
I told the House last week, in the context of child benefit, that benefits will come before the House before Christmas. I stick by that undertaking, and I shall discuss through the usual channels how best it should be carried out.
Neither the Home Secretary nor the Minister of State believes that any confusion arises out of last night's debate, as a fair reading of Hansard will confirm.
Sir Anthony Meyer: Despite the isolationist gloss which the Prime Minister's press secretary seems to put on her perfectly sensible statements about Europe, there is a general recognition in the House of the need to co-operate more closely. Will my right hon. Friend be in a position next week to make any statement about improved facilities for contact between this Parliament and the European Parliament?
Mr. Wakeham: I do not accept for a minute what my hon. Friend has said about my right hon. Friend the Prime Minister's press secretary. I thought that my right hon. Friend's speech was important and interesting, and it received considerable support. I believe that her officials did not attempt to put any gloss on it. I recognise the importance of the point that my hon. Friend has raised about closer contact. I have been trying for some time to make arrangements that are acceptable to all parts of the House. I shall continue my endeavours. However, I need other people to agree with me if we are to make progress.
Mr. James Molyneaux: In regard to the Criminal Evidence (Northern Ireland) Order on Tuesday evening, we understand that the Home Secretary is contemplating the introduction of similar legislation. Does the Leader of the House agree that it is desirable that such legislation should be similar throughout the United Kingdom, even if that means a delay in introducing the Northern Ireland order?
Mr. Wakeham: That is a perfectly proper point of view for debate. My right hon. Friend the Home Secretary has said how he wishes to proceed, subject to the approval of the House, and so has my right hon. Friend the Secretary of State for Northern Ireland. The best thing for me to say to the right hon. Gentleman is that these points will be relevant to the debate next week.
Sir Peter Emery: Is my right hon. Friend getting rather tired of seeing me rising each week to ask whether he will provide time for a debate on the reports of the Select Committee on Procedure? He gave an assurance to the House that a debate would be held before the summer recess in 1987. As we are coming to the end of this Session, will my right hon. Friend assure the House that we shall have a debate within a fortnight of the completion of the debate on the Queen's Speech?
Mr. Wakeham: I assure my hon. Friend that, whenever he rises in the Chamber to ask me a question, I look upon it as a bright part of the day. I enjoy it very much.
When trying to find time to debate the Select Committee's reports, we have to consider that the reports
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contain a number of important issues on which we need to advance with as much co-operation as possible from all parts of the House. Some parts of the House have not, perhaps, been as quick to understand the implications of those issues as my hon. Friend has been. A debate will be held on the reports as soon as I feel that it would be a profitable exercise.
Mr. Alfred Morris: Is it not utterly disgraceful that life-saving medical help here is being denied to Marquita O'Garro, aged five, the severely disabled child in the British dependency of Montserrat, whose case is described by The Sunday Times as "Britain's shame"? Is the Leader of the House aware that, without an operation which cannot be performed in the dependency, she will probably die by Christmas? Will the right hon. Gentleman therefore arrange for a very urgent statement, either by the Secretary of State for Foreign and Commonwealth Affairs or the Secretary of State for Health, on whether they are prepared to intervene to save the child's life? Can we also have an early statement on the Government's whole attitude to patients in British dependencies who need urgent and specialised medical care?
Mr. Wakeham: The right hon. Gentleman raises a case that is obviously of concern to everybody. I cannot answer the question immediately, but I shall ensure that my right hon. Friends are aware of his concern and that he receives an answer about the way in which the Government feel best able to help.
Mr. Speaker: I call Mr. James Hill. I apologise for miscalling him previously.
Mr. James Hill: Did my right hon. Friend see last week the excellent documentary on the environment, presented by a member of the royal family, which described some of the monstrosities that are being passed by local council planning committees? Is there not a case, at a time when the issue is almost daily news in the national papers, for a debate on the process of environmental planning? Could we also not consider ten commandments for good, tasteful planning for human purposes?
Mr. Wakeham: I did not see the programme, but somehow I seem to have heard a bit about it. It sounded like an interesting programme for somebody who had studied the issue carefully. I know that those who are responsible for such matters will study the points that were made.
Ms. Marjorie Mowlam: Will the Leader of the House find time in the near future for a debate on environmental pollution, especially on Teesside, because although there has clearly been some progress, there is an increased level of public concern about the amount of waste which is being imported to be reprocessed and redirected in England?
Mr. Wakeham: No sooner asked than delivered:
tomorrow's debate will be relevant to that subject.
Mr. Michael Latham: Between now and next Wednesday evening, when on the Adjournment I and other Leicestershire Members of Parliament will raise the question of hospitals in Leicestershire, will my right hon. Friend please speak to

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the relevant Minister of the Department of Health and tell her—I assume it will be "her" —that it will not be sufficient to make some generalities in reply because we shall expect to hear that the proposals to close all rural maternity units have been dropped?
Mr. Wakeham: I do not know which Minister will reply, but if it is my hon. Friend the Member for Derbyshire, South (Mrs. Currie), I should say that I have not heard her being accused of making generalities in most of her speeches. Nevertheless, I shall put my hon. Friend's points to her.
Mr. David Alton: Arising out of the right hon. Gentleman's reply to the right hon. Member for Lagan Valley (Mr. Molyneaux), first, what further work is being done in looking into the way in which the House deals with Northern Ireland business, especially the Orders in Council procedures? Secondly, at what stage are the proposals to establish a British-Irish parliamentary tier?
Mr. Wakeham: I know that the way in which we conduct our affairs in matters relating to Northern Ireland is not entirely satisfactory, but I do not see any immediate chance of changing it, although it would obviously form part of progress generally in these matters if we could reach agreement. On the hon. Gentleman's second point about a parliamentary tier, I had some discussions with the leaders of parties in the House just before the summer recess to suggest where I thought we might be able to make some progress. I intend to have further discussions with them in the near future to see how they feel we should now proceed.
Mr. Nicholas Baker: In providing time for discussions on the future of the National Health Service, will my right hon. Friend deplore the method adopted by the right hon. Member for Manchester, Wythenshawe (Mr. Morris) when discussing the future of the NHS by reference to hard, individual cases, however sad they may be? Will my right hon. Friend remind his noble Friends in the other place of the constitutional convention that in money matters relating to the Health Service—for example, charges—they should defer to the opinion of this House?
Mr. Wakeham: I certainly do not wish to criticise the right hon. Member for Manchester, Wythenshawe (Mr. Morris), but my hon. Friend has made a valid point. It is sometimes difficult, when an hon. Member raises an individual case and that hon. Member is the only one with access to the facts, for others to be able to make a considered comment upon it, because there are often many more facts that should be brought out first.
With regard to the House of Commons' decision on the Health and Medicines Bill and the other place, I believe that the constitutional rules by which we conduct ourselves are right. The House of Lords will make its own decision in its own way. I am sure that it will take into consideration the fact that this issue has been discussed twice, very adequately, by the House of Commons and that in both debates the Government won the argument and the vote.
Mr. Bill Michie: The Leader of the House will he well aware of the early-day motions which raise the issue of Barlow Clowes and of its effect on
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ordinary citizens of this nation who, in all honesty and with good advice, invested their hard-earned money in that enterprise. Unfortunately, we have been unable to have a proper debate on that, so will the Leader of the House consider having such a debate, or will the Government dodge that issue for ever?
Mr. Wakeham: No, it has not been possible to arrange a debate in the period up to the prorogation of Parliament. Obviously, many right hon. and hon. Members would like one, but that is a matter to which we can return after the Queen's Speech.
Mr. Harry Cohen: The Leader of the House will no doubt have noted early-day motion No. 1169,
"Créche facilities at the Palace of Westminster".
[That this House considers that créche facilities should be established within the Palace of Westminster for the children of Right honourable and honourable Members and members of the staff working within the Palace.]
That motion, which is in the name of one of the right hon. Gentleman's right hon. Friends, has attracted more than 100 signatures. Will the Leader of the House study that motion and make a considered response to whether créche facilities can be introduced—not just for the children of right hon. and hon. Members but also for those of staff who work here?
Mr. Wakeham: This matter has already been referred to the relevant Sub-Committee of the Services Committee for further consideration. We must leave it to that Sub-Committee to consider the matter first.
Mr. Ian Bruce: Can my right hon . Friend arrange a debate in the new Session, if not before, on a matter that touches on many problems, from football hooliganism and law and order to terrorism? I refer to the provision of a national identity card. We seem to be playing with that proposal and suggesting that others should introduce such a card, but even electronic tagging will be impossible without a national identity card system so that we may know where our population live and the rights they have.
Mr. Wakeham: I know that some people believe that such a card would be helpful in dealing with some problems. However, the Government have not been persuaded of the desirability of going down that road at present, although we encourage the voluntary issue of identity cards in certain cases, such as by licensed victuallers. I agree with my hon. Friend that this matter could be debated at some time. It may be relevant to debates that we shall be having in the not-too-distant future, but I cannot promise a special day.
Mr. Tony Marlow: I wonder whether it would be possible next week to arrange Prime Minister's questions and business questions at a time convenient for the right hon. Gentleman the Leader of the Opposition. Incidentally, does my right hon. Friend know where he is today? It could not be, surely, that he is too important to honour the House with his presence when the Prime Minister happens to be abroad on important business?
Mr. Tony Banks: Well, he certainly does not come in to see you.
Mr. Wakeham: The Leader of the Opposition always very courteously tells me when he is not able to be present, and I appreciate that. It is for him to decide how he best uses his time.
Mrs. Alice Mahon: Will the Leader of the House allow time for a debate on journalistic standards? I draw his attention to a headline in last night's Yorkshire Evening Post that casts a slur on Opposition Members by blatantly lying about their attendance during consideration of the Health and Medicines Bill. May we have such a debate urgently?
Mr. Wakeham: If we had a debate every time that either the press or the electronic media says something untrue or disagreeable about right hon. or hon. Members, we would discuss nothing else; that is something we must accept. By and large, the media do their best, but they do not always get it right. I agree that journalistic standards are an important matter, but I cannot promise an early debate. There will be one on the broadcasting White Paper that will touch on some of the issues, but perhaps not in the way that the hon. Member for Halifax (Mrs. Mahon) phrased her question.
Mr. Edward Leigh: In the debate that my right hon. Friend has just mentioned, will it be possible to raise the issue of media standards generally? Despite the controversy surrounding "Death on the Rock", Central Television recently allocated two hours of prime-time televison to accuse three gentlemen of President Kennedy's assassination, without bothering to find out that they all had cast-iron alibis. Right hon. and hon. Members are increasingly fed up with the powers of self-appointed TV producers to conduct trial by television and accuse innocent men without giving any right of reply. It really is disgraceful.
Mr. Wakeham: My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) makes his point extremely well and clearly, but what will be in order in any debate is a matter not for me but for you, Mr. Speaker, to decide.
Mr. Richard Livsey: Will the Leader of the House consider the six early-day motions 1475 to 1480, referring to local government and competitive tendering?
[That an humble Address be presented to Her Majesty, praying that the Local Government Act 1988 (Defined Activities) (Exemptions) (Scotland) Order 1988 (S.I., 1988, No. 1415), dated 8th August 1988, a copy of which was laid before this House on 11th August, be annulled.]
[That an humble Address be presented to Her Majesty, praying that the Local Government Act 1988 (Defined Activities) (Competition) (Scotland) Order 1988 (S.I., 1988, No. 1413), dated 8th August 1988, a copy of which was laid before this House on 11th August, be annulled.]
[That an humble Address be presented to Her Majesty, praying that the Education (Mandatory Awards) Regulations 1988 (S.I., 1988, No. 1360), dated 29th July 1988, a copy of which was laid before this House on 10th August, be annulled.]
[That an humble Address be presented to Her Majesty, praying that the Local Government Act 1988 (Defined Activities) (Specified Periods) (Wales) Regulations 1988
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(S.I., 1988, No. 1470), dated 12th August 1988, a copy of which was laid before this House on 19th August, be annulled.]
[That an humble Address be presented to Her Majesty, praying that the Local Government Act 1988 (Defined Activities) (Exemptions) ( Wales) Order 1988 (S.I., 1988, No. 1469), dated 12th August 1988, a copy of which was laid before this House on 19th August, be annulled.]
[That an humble Address be presented to Her Majesty, praying that the Local Government Act 1988 (Defined Activities) (Competition) (Wales) Regulations 1988 (S.I., 1988, No. 1468), dated 12th August 1988, a copy of which was laid before this House on 19th August, be annulled.]
Will the right hon. Gentleman consider also the three orders that have been laid in relation to local government and competitive tendering in Wales, and the situation in Scotland in particular? Can there be an early debate on those matters because of the uncertainties affecting local government employees and local authorities in general?
Mr. Wakeham: I know about the orders and the anxiety of the hon. Gentleman and some of his hon. Friends that a debate should take place, but I think that it is a matter for discussions through the usual channels.
Mr. Andrew MacKay: Does my right hon. Friend feel that it would be for the convenience of the House to curtail important debates by midnight, bearing in mind our experience with the Health and Medicines Bill on Tuesday, when two important votes took place in the early hours of the morning and at least two senior members of the SLDP found it more important to be at home in their beds than present to vote?
Mr. Wakeham: I am afraid that those of us who seek and obtain election to the House must recognise that our hours are what I believe is known as unsociable. There have been attempts over the years to change that, and my task is to keep business down to the minimum, but I am afraid that late nights will still be involved from time to time. Nevertheless, I do not think that we have as many late nights as we used to.
Mr. D. N. Campbell-Savours: Has the Leader of the House read the Le Quesne report on Barlow Clowes? Has he noted that, despite what was said at the Dispatch Box, it points to the guilt of the Department of Trade and Industry? Investors throughout the country want Parliament to discuss that report, but the decision is for the Leader of the House. Can we debate it?
Mr. Wakeham: I cannot add anything to what I have already said, which is that I cannot find time for a debate at present. I have, however, read the report, and I do not accept the hon. Gentleman's conclusions. I believe that the problem arose because a private sector firm defaulted on its obligations, and I do not think that the use of taxpayers' money to make good such losses can be justified. Investors must consider for themselves whether they have grounds for legal action and, if so, against whom. Let me repeat to the hon. Gentleman that no taxpayers' funds were used in the 1970 lifeboat operation for the secondary banking crisis, or when equity prices fell sharply in the mid-1970s.
Mr. Jacques Arnold: Is my right hon. Friend aware of the exceptional support on the

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Conservative Back Benchers for early-day motion 275, which calls for the abolition of the national dock labour scheme?
[That this House believes that the National Dock Labour Scheme is an anachronism which both endangers the viability of jobs in the scheme areas and acts as a deterrent to job creation by new ventures; and calls on Her Majesty's Government to abolish the scheme, and open negotiations immediately with employers and unions to bring that about.]
Is he aware of the considerable dereliction on the banks of the Thames and elsewhere in the docklands of the inner cities, largely brought about by the scheme? Can we hope for an early debate, or perhaps action to bring an end to the scheme and return jobs to those areas?
Mr. Wakeham: The Government are aware of the views of many of my hon. Friends about the drawbacks of the national dock labour scheme. As I have made clear to the House on other occasions, however, we have no plans at present to change the scheme's operation, although such matters are of course kept under review.
Mr. Doug Hoyle: May I draw the Lord President's attention to early-day motion 1503, signed by 84 Labour Members, which refers to British Airways' decision to purchase the Boeing 737 rather than the Airbus 320?
[That this House condemns the decision by British Airways to buy Boeing 737 in preference to the Airbus 320; regards this decision as a body blow to the United Kingdom and the European Aerospace industries; believes that it will threaten the long-term job prospects of workers in the Aerospace industry; recognises that this is a classic example of a privatised industry taking decisions without regard to the best interests of the United Kingdom; calls upon the Government who have supplied launch aid for the A320 to point out strongly to British Airways that their decision could adversely affect the repayments of the launch aid and the United Kingdom balance of payments; and requests them to reconsider their decision as the national carrier to fly the Stars and Stripes instead of the British flag.]
The move will bring very little work to this country, and is a matter of great concern to the aerospace industry. British Airways is one of the only national carriers in Europe to turn its back on the Airbus 320, which is technologically far in advance of the Boeing 737. Will the right hon. Gentleman arrange for an early debate?
Mr. Wakeham: I cannot arrange a specific debate on the subject, but there will be occasions on which the hon. Gentleman can raise points of concern to him. British Airways is of course a private company, and the way in which it chooses to equip its fleet is entirely a matter for its own commercial judgment. It is not for the Government to seek to influence its decision making in this or any other commercial matter.
Mr. Harry Greenway: Is my right hon. Friend aware of the apparently surreptitious acquisition of 65 acres near Heathrow airport by or for British Airways, which my constituents and others living nearby in west London suspect to be on offer for a fifth terminal? Could we have an early debate so that hon. Members may express their determined opposition to the establishment of a fifth terminal there?
Mr. Wakeham: My hon. Friend raises an important matter, but I cannot promise him a debate on it. I am sure, however, that he will, with his usual ingenuity, find a means of raising it.
Mr. David Winnick: Will there be an opportunity for the Prime Minister to make a statement on Monday—the day of industrial action over GCHQ—about how she can talk in Poland about trade union rights while in Britain she denies people at GCHQ their basic right to join a trade union? If the Prime Minister makes a statement on Monday, will she also be able to explain how she can sympathise about a shipyard in Poland being closed when she shows absolutely no interest in the imminent closure of a shipyard in Britain?
Mr. Wakeham: Those are two typical, but still mischievous, questions. The hon. Gentleman knows the difference perfectly well. We believe that workers should have the freedom to join a trade union of their choice—
Mr. Winnick: At GCHQ?
Mr. Wakeham: —or not to join one. There are, however, special considerations when national security is involved.
Mr. Winnick: That is what they say in Poland.
Mr. Wakeham: Members of the security services have never been allowed to join a trade union. The hon. Gentleman must accept that there was a considerable amount of industrial difficulty at GCHQ between 1979 and 1981. The differences have been well aired in the House, and the hon. Gentleman knows it. I cannot imagine that that matter will form part of any statement that my right hon. Friend the Prime Minister may or may not make in the House next week.
The hon. Gentleman drew a wholly false comparison with regard to shipbuilding. The North-East Shipbuilders Ltd. issue is important and should not be treated lightly or casually. No decisions have been taken. My right hon. Friend the Chancellor of the Duchy is getting additional information that he wants about one of the bids, and will no doubt make a statement when a decision has been made.
Mr. Geoffrey Dickens: Will my right hon. Friend find time early in the new Session for a full debate on Barlow Clowes? A debate would give us an opportunity to show how the City got it wrong in terms of solicitors and accountants advising the Department of Trade and Industry and intermediaries advising investors. A debate is important as there cannot be an hon. Member who does not have some sad cases in his constituency. It is important to show the country and investors in Barlow Clowes that we care about their plight and are prepared to join in a rescue fund. Such a debate would also clarify the situation.
Mr. Wakeham: My hon. Friend is always very persuasive, but I cannot add to what I have already said on the subject.
Mr. Tony Banks: How did the Leader of the House feel when the Prime Minister so cruelly dashed his political hopes by dismissing the prospect of his or his colleagues ever taking over as leader of the Conservative party? Perhaps he will take this opportunity to get his own back by announcing that he has speeded up consideration of the

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terms of the experiment for televising the House, as it is about time that we had an opportunity to discuss the initial report. When will that report be presented to us? Does he yet have a date for the televising of the House?
Mr. Wakeham: One thing that we cannot criticise the hon. Gentleman for is lack of imagination. He can dream up all sorts of things to ask questions about.
Members of the Select Committee set about their work seriously and conscientiously. They are dealing with an important and substantial topic. Any rumours in the press about dates of reports and postponement are mostly in the imagination of people who want to disrupt us from the course we set ourselves, which was to produce a report having considered all the issues. If the House had wanted just a working party to set up this experiment, it would have got a working party. It wanted a Select Committee, and the hon. Gentleman knows that a Select Committee has to take evidence, consider it and make a report. It takes some time to do that properly, and it is being done properly.
Mr. John Bowis: My right hon. Friend will be aware of a recent incident of appallingly bad driving, when a barge went into Battersea bridge. He will also be aware that Battersea is an area of London with no rail or underground links. Traffic is prevented from going north across the river and only cars are allowed to go south. Will he arrange for a statement next week on when the bridge will be open? I hope that it will be open before Christmas. Will he also arrange for a statement on what steps are being taken to avoid such incidents in future?
Mr. Wakeham: I know all about that, because I was stuck in my hon. Friend's constituency for about an hour last Monday morning on my way to the House. Only because I saw so many people who had voted for my hon. Friend did my temper stay nice and cool. I shall refer the matter to my right hon. Friend the Secretary of State for Transport to see whether a statement is required. If so, it can be made.
Ms. Mildred Gordon: Will the Leader of the House find time for an early debate on the problems that many pensioners will experience this winter in getting enough money to keep warm? It is a national scandal that there are so many deaths each winter from hypothermia in what is hardly the coldest climate in Europe. Can we also debate what practical steps can be taken to abolish the disconnection of utilities from people aged over 60?
Mr. Wakeham: The hon. Lady, I know, takes a serious view of these matters, but I must tell her that the Government's record on helping old-age pensioners is substantially better than that of the Labour Government who were in office before she came to the House. Also, additions to take account of heating costs are substantially greater now than they used to be.
Mr. Max Madden: Will the Leader of the House arrange for the Secretary of State for Employment to come to the House next week to explain what action he has taken to make a reality of the Government's guarantee to school leavers of a youth training scheme place or a job? Does he realise that thousands of 16 and 17-year-olds who left school this summer have neither a YTS place nor a job and that, since 12 September, they have been unable to claim benefit? Is it not wildly irresponsible of the Government to leave thousands of 16 and 17-year-olds without any income, thereby forcing some of them into trouble and crime? It seems recklessly irresponsible. Will the Government take urgent action to reverse this policy?
Mr. Wakeham: I have heard this before. When I looked into it, I discovered that there are substantially more places than people to fill them, but that in some areas the match is not as it should be. In those very few cases, the Government are taking urgent action with the providers of training to get over any little difficulties that there may be in one or two places. By and large, the scheme is working extremely well.
Mr. Bob Cryer: Can we have a debate in the near future—preferably next week—to consider the bids that have been put in for the Settle-Carlisle railway line and to see whether they have any sense, sensibility and realism? British Rail has treated the whole exercise as though it is a major defence secret. We could at the same time discuss the Government's plans to close 1,000 miles of branch line, fattening up—or slimming down—British Rail for privatisation, thereby destroying a valuable public service and forcing travellers to go on already overcrowded roads which yield more than 5,000 deaths and hundreds of thousands of injuries each year, instead of preserving a full public network. It is vital to have a debate before this organised vandalism is implemented.
Mr. Wakeham: I can deal with great authority with the article in The Guardian about the 1,000 miles of railway which is to be closed. One word describes it: the article is rubbish. I know that the hon. Gentleman has taken a keen interest in the Settle-Carlisle railway. I cannot add to what I have said to him in the past, but I shall refer the matter to my right hon. Friend the Secretary of State.
Mr. Alfred Morris: On a point of order, Mr. Speaker. Will the Leader of the House, with his customary courtesy, correct a factual inaccuracy? He said that I alone was familiar with the case of the 5-year-old disabled child who is dangerously ill and in need of urgent medical care. While I may know more about the detail of the case than other people, how can the Leader's statement possibly be true when the case was reported at length and in detail by the Sunday Times?
Mr. Wakeham: If I said something that upset the right hon. Gentleman, of course, I withdraw it.

Health and Medicines Bill (Lords Amendments)
4.10 pm
Mr. Dennis Skinner: On a point of order, Mr. Speaker. This morning, the radio was retailing an account of representations that had been made to you regarding the continuation of the debate that took place on Tuesday about eyes and teeth. It was being suggested that the Parliament Act would prevent the debate and the vote on one of those issues taking place.
I am probably the last person in this building to want to give an oxygen cylinder to the other place, but the plain fact is that, under the Parliament Act as I see it, and in view of the fact that the other place has debated these two issues, it would be able to continue the debate and perhaps bring the matter back to this place, if the vote is carried.
Will you confirm, Mr. Speaker, that there have been no representations from the Government on this issue, that no decisions have been made and that, contrary to all the reports on the airwaves this morning, those debates will take place?
Mr. Speaker: I cannot confirm that, because I am not in any sense connected with the Government, but I heard what I judged to be a somewhat inaccurate statement on the news about my ruling.
To clear that up, I should say to the House that I have given no ruling on the Health and Medicines Bill other than that which I gave when I was in the Chair during the debate. Lords amendments Nos. 20 and 22 involve Commons privileges. The House gave a reason for disagreeing with the Lords on amendment No. 20. It did not do so in respect of amendment No. 22 as it is not the custom to give a reason when consequential amendments are made to a Bill.

Confidential Documents
4.11 pm
Mr. William Cash: On a point of order, Mr. Speaker. I would be greatly obliged if you would consider and express, in due course and in principle, a view on an issue relating to a matter set down in extenso on page 93 of "Erskine May" under the general heading
"Matters arising outside Parliament which may be treated as proceedings inside Parliament".
This point arises by virtue of the close relationship of those two matters, pending business in the House and, especially, in the context of breaches of the Official Secrets Act. I refer generally to the release of certain stolen confidential documents from within Whitehall relating to the pending business of this House, and their use by hon. Members, inside or outside the House.
In the light of condemnation of such actions by the Law Lords in the "Spycatcher" case, I simply ask whether you would be good enough in due course to give a general ruling on such matters and to explain to the House what guidance it might take from your ruling.
Mr. Speaker: That is a hypothetical matter, but, if the hon. Gentleman is making an allegation about the leaked documents of which we have heard this week, as a matter of privilege, he should write to me in the usual way and I shall certainly consider the matter.
Mr. Brian Sedgemore: Further to that point of order, Mr. Speaker. Will you confirm that, in the late 1930s, when Winston Churchill was leaking information and documents that he received from the Ministry of Defence, which was leaking like a sieve, an inquiry was set up in the House and the House ruled that it was his duty to bring that information, however he obtained it, before us?
Mr. Speaker: I cannot confirm very much of what went on in 1930. I was still at school.
Mr. Frank Dobson: Further to your response to the point of order raised by the hon. Member for Stafford, (Mr. Cash), Mr. Speaker, will you confirm that, in the event of the hon. Gentleman writing to you and your ruling on matters relating to the privilege in respect of leaked Government documents, any ruling by you will apply to any document, whoever leaks it?
Mr. Speaker: These are hypothetical matters. I will wait to receive a letter and look carefully into the question.

BILL PRESENTED
  COUNTING WOMEN'S UNREMUNERATED WORK
  Ms. Mildred Gordon, supported by Mr. Keith Vaz, Mrs. Alice Mahon, Mr. Tony Benn, Ms. Joyce Quin, Ms. Marjorie Mowlam, Mr. John Hughes, Mr. John Battle, Mr. Tony Banks, Ms. Dianne Abbott, Mr. Doug Hoyle and Mr. Bill Michie, presented a Bill to require government departments and other public bodies to include in the production of statistics relating to the gross domestic product and other accounts a calculation of the unremunerated contribution of women and to include this calculation in the Gross National Product: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 225.]

Public Accounts Committee
4.14 pm
Mr. Robert Sheldon: I beg to move,
That this House takes note of the 1st to 36th and 41st Reports and First Special Report from the Committee of Public Accounts of Session 1987–88 and of the Treasury Minutes on those Reports (Cm. 307, 323, 367, 410, 502 and 509), with particular reference to the following Reports:—

16th: Monitoring and Control of Charities in England and Wales

20th: Ministry of Defence: Fraudulent expenses claims; Meteorological Services

26th: Community care developments

31st: Naval warship and weapons procurement

32nd: Review of the operations of the Land Registry

Today we are having our annual debate on the public accounts reports. They do not cover all the matters that we have discussed; they are the matters on which we have had a reply from the Financial Secretary to the Treasury, who, acting on behalf of the Treasury, produces the Treasury minutes for us.
Our last debate was on 3 December last year when we considered the 54 reports tabled in the motion. This time, we are dealing with 38 reports and six Government replies. There are fewer this year because, first, it is only 11 months since the last debate and, secondly, as a result of the election, we took rather less evidence during the year. I must put the House on notice that we are likely to bring significantly more before it next year.
As on recent occasions, we have chosen five reports to highlight in the motion. The way in which we selected those reports reflects the lessons which can be learnt and should be drawn to the attention of the House because substantial sums of money are involved and particular interests should be explained and discussed. A number of other reports are likely to be mentioned in the debate.
I must give my personal thanks to Committee members. It is an extraordinarily hard-working Committee, frequently interviewing two Departments each week. That means that there is a vast amount of paperwork and the work is now undertaken by the Committee far more assiduously than it has ever been during the period that I have been associated with the Committee, which, like that of the hon. Member for Scarborough (Sir M. Shaw), goes back over 20 years. That work has borne fruit in the reports now before the House.
A number of hon. Members have left the Committee. The hon. Member for Horsham (Sir P. Hordern), has become chairman of the commission which looks after the detailed operations of the National Audit Office and the Northern Ireland Audit Office. He considers such matters as pay, conditions and recruitment. I am also a member of that commission and, only this week, we visited Northern Ireland to see the National Audit Office there and to ensure that it has the appropriate impact.
The value of these reports—I cannot stress this too highly—is that we have unanimity in every report. That is important because we differ from other Select Committees, which have their differences from time to time. We achieve this unanimity because we are trying to protect the taxpayer. That matter is of overriding importance to us. We achieve that unanimity, not by diluting the force of our report, but by concentrating on whether the taxpayer is obtaining value for money. That is why we have such an impact and, I hope, always will have. The Financial
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Secretary to the Treasury will reply to the debate. He is welcome to attend our meetings whenever he wishes, but we know that the burdens of his office prevent him from attending frequently.
If the Committee and the National Audit Office are to work successfully, they must do so in a form of partnership. That is much easier to achieve now that the Comptroller and Auditor General is an Officer of the House. That is an important change. He is responsible to you, Mr. Speaker, and to the House. That was not so in the past and has been an enormous improvement. In the past, we had almost a branch of the Civil Service, which meant that recruitment had to be undertaken within the normal rules of the Civil Service.
Now the situation has changed and the staff are auditors and accountants in their own right. They have more in common with accountancy firms in the City and in provincial towns than they have with the Civil Service generally. This is as it should be. So successful are they that a number of them are being attracted by the City and other areas of the private sector, where they are paid higher salaries, because of their expertise. When the recruits sit their accountancy examinations, we find that they take about 80 per cent. of the top places when the results are announced. These are the recruits of the National Audit Office. It is a great success story and we should be proud of it. We can be proud of this part of Parliament in which we have some responsibility.
The PAC works closely nowadays with the National Audit Office's investigations. Our work is based upon detailed examination of all Government papers that deal with the work undertaken in the Department which is the subject of the report from the Comptroller and Auditor General. The NAO produces its report to the House, and the Government know that the PAC and the NAO monitor the action that they take in response to the Committee's reports. We know that under the National Audit Act 1983 the Comptroller and Auditor General has discretion in the investigations that he chooses to make. There are regular discussions with the Committee, which is a novel feature of the PAC's work. This is part of the process which involves annually a detailed NAO corporate plan and a detailed examination of the reports and areas of activity. The relationship between us has prospered as we have brought our views to bear. The NAO gives us its views on important issues within the areas that are under investigation.
The new NAO Comptroller and Auditor General, John Bourn, was appointed by the Queen after the relevant motion was approved by the House, and we have a happy relationship with him. We feel that he has proved to be a successful choice. The office has nearly 1,000 staff members and it needs to keep under review the value for money that is achieved by the Government. The staff members are comparable to the sort of staff that would be found in industry. They examine the way in which the Civil Service spends public money.
I visited the National Audit Office in Northern Ireland on Tuesday. The task of auditing Northern Ireland expenditure on behalf of the Committee is an arduous one. There are particular problems in dealing with expenditures in Northern Ireland, but there is power now to make reports on value-for-money investigations. Five years ago, before the National Audit Act 1983 came into force—this was prompted by my hon. Friend the Member for

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Norwich, South (Mr. Garrett)—we had the appropriation accounts. These were one or two voluminous reports that dealt with detailed matters.
We are now engaged in the process of getting value for money, and I shall say something about the way in which we go about that. Our prime consideration must always be to ensure that public money goes for the purposes which Parliament intended. Our purpose is to ensure that when the House votes money it goes to those whom Parliament intended to receive it and for the purpose which it intended. That must always be a prime consideration as we assure ourselves of the probity of the public service, and perhaps we take for granted too readily that probity.
I have met members of PACs from other parts of the Commonwealth. Their major preoccupation is to reduce fraud and corruption, and they want to know how we tackle the problem. Once fraud and corruption starts, it is extremely difficult to root out. The greater barrier to fraud and corruption in the public service is formed by honest individuals within the service. Once a group acts in concert to defraud the public, it is extraordinarily difficult to root out. Whenever we see any possibility of fraud or corruption we treat it as the most serious matter to come before us, and it is right that we should do so.
I am happy to say that these occasions are few and do not take as much of our time as they demand of other PACs in other countries. Thus we are able to deal more effectively and more usefully with the value-for-money parts of our operation.
Mr. Ralph Howell: I am interested to hear the right hon. Gentleman's remarks. I ask whether he is being rather complacent. How can we be sure that we are getting value for money in the National Health Service, for example, when there is no real accounting system, which means that there can be no real auditing system? It has been arranged deliberately that there should be no inventory control in many sectors of the NHS. This is made clear in the 14th report of 1985. Having considered the situation in the Health Service over all the years of its existence, the Department still did not know whether there were too many nurses or too few. The comment was made that that was unsatisfactory. I questioned my right hon. and learned Friend the Secretary of State about this matter only the day before yesterday and he still could not say whether there are too many nurses or too few. The necessary information is not available and there is nothing on which to make comparisons. There is no proper accountancy system in the NHS or, I think I am right in saying, in any other sector of Government. I feel that complacency is being shown, and that talk of getting value for money is unrealistic.
Mr. Sheldon: I had not really moved to the question whether we are getting value for money. The hon. Gentleman is anticipating what I have to say about the problems of getting value for money. If he had waited a little longer he might have learnt rather more about the way in which we approach the issue.
I do not know whether the hon. Member for Norfolk, North (Mr. Howell) has read the PAC's 11th report, which deals with the internal audit of the Health Service. We set out what we need to have if we are to assure ourselves on these matters. In the past two years we have undertaken, with the co-operation of the Comptroller and Auditor General, a close and continuing examination of the NHS.
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The report on nurses was one of the early fruits of that work. We showed that the Department did not know whether there were too few nurses or too many. There was a report produced last week about the state of the NHS. It deals with whether it is being looked after properly. We cannot discuss the issue fully within this debate because we have not had a Treasury minute. There has been no opportunity to debate it properly. The important issue of operating theatres will be arising shortly. We are giving consideration also to family practitioners and doctors. We have suddenly moved into this area.
I am aware of the continuing interest of the hon. Member for Norfolk, North in these matters and I am pleased that we are able to deal with them. That is largely because of the way in which the NAO has superseded the old Exchequer and Audit Department. The value of the reports that are produced will become more widely appreciated.
Mr. Harry Cohen: I appreciate that my right hon. Friend has moved on from fraud and corruption to value for money. I revert to fraud and corruption, however, because he has said that there are relatively few examples of it. It would seem that there are some spectacular rake-offs as a result of fraud and corruption, especially that which involves the Ministry of Defence. Some of the large defence contractors, or defence monopolies, have taken the taxpayer for a ride. Investigations appear not to be bearing fruit and, in effect, the taxpayer is not recovering his money. What is the PAC doing in this area?
Mr. Sheldon: I was dealing with fraud and corruption as a proportion of the work that we undertake. I shall be dealing with specific instances that arise in two of the reports among the five which have been singled out. My hon. Friend and the hon. Member for Norfolk, North are right to attribute to these matters the importance that they deserve.
The elimination of fraud and corruption must be our major task. After that, we shall have time to consider value for money, economy, efficiency and effectiveness, all of which are written into the National Audit Act 1983. Economy is simply a matter of ensuring that we are not paying any more for what we are getting than we need to pay. That is a straightforward undertaking with which the accountants can usefully deal. Efficiency is a little harder because sometimes it is worth paying a little more to have something a little better. It is a trade-off between extra efficiency and how much more might have to be paid for that. Effectiveness is more difficult. We must ask, "What do the Government intend?" We do not question policy, which is the major difference between our Committee and other departmental Select Committees. We take the policy for granted, even though many of us may disagree with certain aspects of it. We ask what the Government are doing to make the policy more effective. When we know that, we can compare results with expectations.
All that actually lies at the heart of the auditing function. Every time that a civil servant comes before the Committee, we want to know about the programme that he sets out before us—when it was initiated, how he quantified what he wanted to achieve, when it would be achieved, how much money it would cost and his arrangements to monitor month by month, or year by year, how effectively the programme operated. It is the

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comparison between expectation and achievement quantified. That is important. There have been some disastrous experiences of the failure to do that. The civil servants did not know what they wanted to achieve, they did not know when they had achieved it, they did not know the cost and they did not know whether the programme had ended. We must avoid those horrors if there is to be proper public accountability. We must know, with some precision, what is expected, how much it will cost, when it will be achieved and that proper monitoring arrangements have been installed. In fairness to Government Departments, they are now aware of that and it is relatively rare for those expectations not to be built into the programmes that we examine.
I must mention the Treasury Officer of Accounts, Mr. John Beastall, and his Northern Ireland counterpart, Peter Small, who work closely with us and are valuable contributors to our discussions. The accounting officers take our evidence sessions seriously and spend a great deal of time preparing for them. I am conscious of the amount of time that we take from those senior civil servants, who have many other activities to undertake. I know that when they are informed that we will take evidence, they spend a great deal of time—several days or even more—preparing for their appearance before us. The easiest thing in the world would be to browbeat those civil servants, as do some of the Congressional committees. However, that is not the way that we take evidence. Part of our major task is to ensure that we improve the administration of the way in which money is spent. We understand the problems of the accounting officers and I and my colleagues try to take them into account in our questioning.
I am not sure about the number of reports that will be published this Session and whether we will beat the previous record of 52 reports in the 1985–86 Session. Of course, it is not the number of reports that is so important. Indeed, we used to combine all reports into one big report. It was unwieldy and few people were interested in it. The way that we do things now—one report per subject—makes them more digestible. People then know what they are doing and can go about it rather more quickly than if they had to wait for an annual report.
Mr. John Garrett: My right hon. Friend knows that I greatly admire the functioning of the PAC under his chairmanship. In many ways, it has carried out the improvements and the changes that many of us have wanted for a long time. Today we are considering 38 reports, of which five have been selected for particular debate. The Committee often produces 50 reports in a year. Does my right hon. Friend agree that some of them are rather superficial? Would it not be far better to concentrate on, say, half the number in much more detail?
Mr. Sheldon: I fully understand my hon. Friend's point, as it is one that arises from time to time. Part of our job is to ensure that Departments expect supervision of their work. If there were only a limited number of reports, we would not get round many of the Departments. That is the way that the Canadian House of Commons operates. Some of its Members visited our Parliament two years ago and said that they were unhappy with the system and that their relationship with their Comptroller and Auditor General was little short of disastrous. Their relationship
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with the other Members of their House did not appear to be that good either. They came here to find out how we handled matters. There could be no greater tribute to our work than the fact that they returned two years later to examine our work in greater detail because they had been so impressed with the way that we operated. Their Committee produces fewer reports, which the various Departments do not take seriously because it could be a few years before the Committee dealt with those Departments again.
One of our great strengths—and this applies especially to the large Ministries such as the MOD—is that Departments know that we will come to them again and again on matters such as procurement and that we take a continuing interest in what they are doing. For example, if they tell us that they have dealt with certain problems, they know full well that the next time that they come before us they will be confronted with that statement and be held to account for it.
I grant that the Committee might be working far too hard, and for the benefit of those who work with me I should dearly like to find some way to limit the load. I fully understand both sides of the argument and we shall continue to keep these matters in mind.
It is likely that there will be a larger number of reports this year than in the record year of 1985–86. The National Audit Office is, rightly, planning a gradual increase in the number of value-for-money studies, and we welcome that. We want it to become active in many areas. It is probable that a number of those reports will not have the great depth that the Committee rightly requires. We have it in mind to ask certain questions and, if we receive fairly satisfactory answers, we will leave it at that and not necessarily produce a report on each occasion. The alternative would be to set up a sub-committee, but we are very much against that because we believe that all of us must have responsibility for the expenditure of public money and the examination of the way in which it is spent. We have always been against any division of responsibility within the Committee.
I must say a few words about the way that we review past actions. One of the features of the past year has been the large number of representations from inside and outside the House asking for examinations of all sorts of matters. Indeed, some have asked us to consider future matters, and I have to remind them that we essentially consider the past, monitoring whether money has been spent effectively, economically and efficiently. We are trying to learn lessons and to offer lessons to Departments in the expenditure of moneys. Of course some lessons are valuable, because they highlight some points that are worth examining. We discuss with the Comptroller and Auditor General how they might fit into his rolling programme. That is also an important development.
Mr. Toby Jessel: On matters in which the Public Accounts Committee has taken an interest, will the right hon. Gentleman, on behalf of the Public Accounts Committee, accept my warmest congratulations on its excellent reports on Ministry of Defence schools of music? They were thorough, effective and crucial in the representations that were made to Her Majesty's Government on the survival of the royal military school at Kneller hall. The Public Accounts Committee's reports were extremely important and had a bearing on the result that was obtained. The Royal Military School of Music at

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Kneller hall was saved, as a result of which it continues to produce the finest military bands in the world, which are the envy of every other nation.
Mr. Sheldon: The hon. Gentleman has given the House part of the lesson that I was about to give. I might as well introduce it now. The interest of many hon. Members and of those outside alerts the Committee to certain matters that are worthy of further consideration. The hon. Gentleman's case is precisely within that definition. Because of his efforts, we realise—[An HON. MEMBER:There were others as well.] Yes, there were others as well.
Because of the efforts of the hon. Member for Twickenham (Mr. Jessel), we realised the full extent of the problems involved, and carried out a more detailed investigation than we might otherwise have undertaken. We found that the Ministry of Defence proposals and the way in which it carried out its examination were woefully inadequate. We were able to satisfy ourselves that alternative methods were better. The fact that it pleased the constituents of the hon. Member for Twickenham is a bonus for him, and it is a pleasure for us that we were able to deal with the matter effectively and sensibly.
As the activities of several Government Departments are hived off agencies will come into being. It becomes important to consider how they will be dealt with and who will appear in front of us. We must have before us the person who makes the final decision. We do not want to be fobbed off with seconds or, God forbid, thirds. We want in front of us the people who are to make crucial decisions. With agencies, it is a more complicated matter, because an agency might be a minor body in which the permanent secretary might make the major decision, or an agency's chief executive might make a final decision on a major spending matter. We content ourselves by saying that we must have the main person responsible. We have sent a note to the Treasury detailing our interest and concern and putting forward our recommendations.
I now refer to the Government's response to our various proposals and recommendations. We shall soon begin to quantify matters. The quantification of proposals and acceptances is not an exact science. For the record, I point out that the National Audit Office, which I asked to produce figures for me, said that, in 1987–88, out of 161 specific recommendations or findings, 153 were agreed by the various Government Departments involved. I suppose that that is a success rate of 95 per cent. But let us not make too much of it, because it depends more on the importance of the recommendations than on the numbers. However, it is a sign—no more than that—of the way in which our reports are treated and accepted, and we value that. An essential part of our task is to make sure that we not only get value for money and proper accountability but try to improve administration in the way that I mentioned.
I shall deal with one or two reports apart from the five that are set out on the Order Paper. I begin with the report on the monitoring and control of charities in England and Wales. We would not have had that kind of report, say, five years ago. The Committee considered that it was important because there is a clear Government responsibility dealing essentially with value for money. Nobody is questioning whether any certification work has gone adrift—for example, fraud or corruption within the Charity Commission.
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Charities are big business. There are more than 150,000 of all shapes and sizes. They spend over £10 billion a year —frankly, when I first saw that figure, I thought that there had been a mistake—and hold assets of more than £2·5 billion. They enjoy tax concessions and get support from public funds worth an extra £2·5 billion a year. Obviously, by their nature, they have a special place in the minds of the general public. It is crucial that charities be seen to be not only above fraud but perfect in their operation, or as near to perfect as we can get them. The Public Accounts Committee was disturbed that charities were not properly controlled and efficiently managed and that there were major gaps in the Charity Commission's control and monitoring systems. We found that the register of charities was seriously out of date, unreliable and ineffective, and that there was no computerisation of records. All that they had were brown folders and they were not undertaking their responsibilities. Paragraph 9 of our report states:
"All registered charities are required, under the Act or by the Commission, to submit annual accounts to the Commission. But the NAO found that this requirement was being widely ignored, with little attempt at enforcement by the Commission. And less than a third of the accounts received had been professionally audited."
Paragraph 14 states that we found that an NAO
"test examination indicated that the Commission examined only 4 per cent. of the limited number of accounts received from charities".
Two thirds of charities' accounts were not submitted in the past five years. We found that administrative charges varied from 0·5 per cent. to 20 per cent. in top charities. Apart from the top 21 charities, some charities were charging 95 per cent. for administration. That is clearly fraud, unless something has gone wrong. One of the advantages of our report is that it stimulated many other people to investigate further. We discovered charities that really were rackets. People were going from door to door, saying that they were from a registered charity. It is the easiest thing in the world to become a registered charity. All that one must say is that one's objects are charitable, not whether what one is doing is charitable. That is an absurdity. There is no need to submit any accounts, because nothing happens. One can go from door to door, pick up money, and put it in one's pocket. That is shameful. There is now a new broom in the Charity Commission, and we wish him the very best.
Something could have been done. I can understand problems with staffing, a lack of money for computerisation, and a vast amount of work to do. Because charities could not do everything, it did not mean that they should do nothing. That was one of the saddest aspects that occurred to the Committee. There could have been a sample examination, for example, and there could have been an undertaking to publicise the charities that had not published their accounts. The Commission could have threatened to do that. There were many possibilities that fell between doing nothing and doing everything. That would have satisfied at least part of the criticism. The Committee was gravely concerned at the risk of fraud, abuse and maladministration. We considered that such organisations needed to be much more positive and purposeful.
Since we produced that report steps have been taken to tackle some of the problems, and we are happy to have prompted some action. Like many other bodies, when the Charity Commission knew that we were examining this area, it took steps to discover the true position and

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produced its own report. That happens frequently with the work of the Public Accounts Committee. One must not compare the position that we discover with the position as it should be, but with the position that might have existed had we not announced our intention to examine. The very announcement of that intention often prompts changes. My hon. Friend the Member for Norwich, South (Mr. Garrett) will be aware of that. I am delighted when bodies say to us, "Things are not as bad as they used to be", and I make no criticism of them, but I am aware that much of the progress is a direct result of the understanding that the Committee will take its examination further.
We are pleased that action is being taken, and pleased with the Treasury minute, which endorses the Committee's anxieties and fully accepts the need for revised priorities and firm action in the areas identified. The change in senior management in the Charity Commission and the fresh impetus in its work appear to be leading to continuing improvement. We look forward to those aims being vigorously pursued.
Mr. Ian Gow: Is this the first occasion on which the Public Accounts Committee has investigated the Charity Commission?
Mr. Sheldon: I know of no previous investigation. The Home Office, which had responsibility for the Charity Commission, never regarded it as having the importance that charities should have. The great thing about our country is the way in which the charitable impulse is readily catered for. We need only a disaster or information about something terrible happening for a great deal of money to come forth, even from very limited pockets. That is a great tribute to the response of the British people, but we must ensure that the money goes to the right people to carry out the right task.
Mr. Tim Smith: I am sure that the right hon. Gentleman is right when he says that with such large sums—about £10,000 million a year—the potential for abuse, and indeed for a major scandal, is great, but does he agree that, although the Committee was right to criticise the Charity Commission, the fact is that the law under which it operates is wholly unsatisfactory? For example, there is no requirement for a charity to produce audited accounts, so there is no external check on its finances, and the Charity Commission itself is under-resourced. Might it not be a suitable candidate to become an executive agency?
Mr. Sheldon: The hon. Gentleman is right to say that there is a fundamental need for a change in the law. The Government accept that, but the problem now is one of time. I agree that audited accounts must be produced, or an alternative found for smaller charities, but whatever happens the legislation will take some time, and in the interim I am anxious that people's confidence in the value and work of charities should not be diminished. The Committee was conscious of the need to retain respect for charities, most of which are perfectly well run. I did not want there to be a gap between what was wrong in the past and what will be as near right as one can get it in the future. We have handled the matter reasonably well, and it is for the Government to produce their proposals. We hope that they will not be too long delayed.
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The Committee's 20th report related to fraudulent expenses claimed in the Ministry of Defence, mainly fraudulent travelling, and subsistence claims made by its ordnance searchers staff. The amounts of money were difficult to determine. We identified more than £203,000, but the true sum may have been millions of pounds. The important matter was not that the money was obtained fraudulently by people who regularly went home every evening but still claimed subsistence in hotels and other accommodation, but that the claims were countersigned by military personnel.
It goes without saying that the Public Accounts Committee is always greatly concerned about evidence of fraud by public servants who handle public money. This was a serious and shocking case, and there was evidence of long-established local malpractices and management connivance. But, following police inquiries, the Director of Public Prosecutions advised that criminal prosecutions could not be sustained. Although the Ministry of Defence considered disciplinary action, none was taken and nothing has been recovered. The Public Accounts Committee found that astonishing. It regarded as extremely disturbing the scale of the fraud, the blatant control failures and the weak disciplinary approach and delays of the Ministry of Defence. What disturbed us most was that military personnel who were responsible for civilian employees were conniving in the operation. We were sad that the vigorous action that was vital was not taken, and the public standards which rest on the truthfulness and integrity of supervisors were found to be sadly lacking.
In the Treasury minute, the Ministry of Defence assured the Committee that serious fraud cases should normally be followed by prosecution or disciplinary action, and that the effort needed was not sufficient reason for not pursuing such action. It is easy to say that it would cost more to get the money back than the amount of money at stake, but that can never be the argument when one is dealing with public money. With private money, we may decide individually that it is not worth throwing good money after bad. But that argument cannot easily be sustained in the public sector. Taxpayers' money should be more rigorously controlled than our private money, about which we may decide as we think fit.
We are pleased that the Treasury minute accepts that such cases require prompt, vigorous action and that it has taken decisions to improve internal control. That emphasises what we considered to be the deplorable handling of the cases that we examined. I hope that the Financial Secretary will be able to say whether there has been any success in recovering money and what has been done to give all Departments guidance on disciplinary action in serious fraud cases.
The 26th report deals with community care developments. We noted the Government policy that elderly, mentally handicapped and mentally ill people should, as far as possible, be cared for in their own homes or in the local community. Most of the 8 million elderly, mentally handicapped or mentally ill people are cared for in their own homes, but 220,000 people live in residential homes and 155,000 in National Health Service accommodation. The implementation of a policy of transferring from hospital into the care of local services run by the NHS and the local authorities demands a certain relationship between the two bodies, but we found that relationship to be inadequate.

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We examined the success of the transition from hospital into community care and placing people in their own environment. We found a complex administrative framework involving local authorities, NHS hospitals and family practitioner services, and the danger that patients could be transferred to the community without appropriate services being in place. In one case, people were being discharged from hospital, sent to their homes, sent back to hospital in an ambulance and then sent back home. Joint planning and finance schemes were not as effective as they should be.
The funding mechanisms needed to be improved to provide practical ways of moving people to the community without penalising those who wish or need to stay in hospitals. The Committee also examined the rapid growth of residential care for the elderly, many of whom have been financed by supplementary benefits, which amounted to £500 million in 1986. That support was provided irrespective of any assessment of the need of the claimant for that sort of care. Almost a quarter of those receiving benefits could have stayed in their own homes had community support services been available. What is more, it could have been done more cheaply and more in line with the claimants' requirements and wishes.
We were concerned that those in residential homes might not be receiving good value for the money paid to the proprietors, and that the registration and inspection of homes were inadequate. We were told that, if value for money was not being obtained, that would prompt the elderly to go elsewhere. I shall read one question put to the accounting officer—at 1786 in the 26th report—by my hon. Friend the Member for Birmingham, Hodge Hill (Mr Davis). He asked:
"Have you done any comparisons on the basis of value for money as between private residential homes"?
He then went on to ask:
"you say you do not bother about value for money because you leave it to the customer, the person who is receiving supplementary benefit … Do you think that is realistic?"
Mr. Partridge replied:
"Yes, it is realistic."
My hon. Friend asked further:
"Have you ever heard of the fears of elderly people of being victimised if they complain about what is going on in a private residential home"?
Therefore, the claim that one can receive value for money by asking elderly people to make their protests and to take their custom elsewhere, if they are not satisfied, was not only unrealistic, but it disturbed us that this was the view held by the official concerned. We have all been to these homes and know that these people would not take their custom elsewhere. Many of them dare not make a squeak of protest. The House may recall that this report led to a number of further examinations, one of which showed what happened in some of those homes. That added to the force of our argument that these homes need to be looked at more fully and more regularly. We said that the registration and inspection of homes was inadequate. I am pleased with the response that we have received. The Treasury minute promises further consideration of the need for care assessment, which is essential to achieve not only the right care for the elderly, but, of course, value for money for the taxpayer.
The Treasury minute promised an increase in the minimum number of inspections from one to two a year,
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and that the question of the reasonableness of charges would be researched further. That would seem essential to ensure proper value for money.
Our report on this was issued before Sir Roy Griffiths' report, "Community care: Agenda for Action", was published. The Griffiths report recognised the need for fundamental changes in the funding and administration of community care. The recommendations of that report are still under consideration by the Government. However, whatever changes are made, they need to ensure that individuals receive adequate and appropriate forms of care that also provide good value for money, which was a point made by the Public Accounts Committee.
The 31st report, "Naval Warship and Weapons Procurement", followed up earlier Public Accounts Committee reports on the Ministry of Defence's management of torpedo programme and design and procurement of warships and management of Trident programmes. Those are substantial expenditure programmes. It is bona fide because we must have a Ministry of Defence examination of at least one of its reports in our regular annual reviews, because of the amount of money involved as well as the lessons that need to be learned.
The torpedo expenditure programme is more than £5 billion and the programme for Trident is more than £9 billion. There is a long history of poor value for money in defence procurement. We now know that up to half of defence expenditure on procurement was not anticipated at the time that these defence contracts were considered.
It is important to look first at the question of torpedoes, because the Public Accounts Committee has lived with them for more than 20 years. If one were to start from scratch and consider whether it was worth spending £5 billion on a torpedo programme, or whether it would be better to get them off the shelf from America or somewhere else, few of us would have any doubt. We have had extremely poor value for money. Paying £5 billion for a weapons system would be appropriate if it were a weapons system that would determine many conflicts at sea or elsewhere, but torpedoes do not come into that category. They are not so crucial as to require that amount of money when they can be obtained elsewhere so much more cheaply.
Perhaps I may start with the way in which the Ministry of Defence has been operating, because we acknowledge the Department's efforts in response to earlier Public Accounts Committee criticisms. We know that the MOD is pursuing possibilities for introducing competition for the first time in main torpedo production contracts in the light of Marconi's previous monopoly position. We were encouraged by the way that Mr. Peter Levene is studying those contracts and trying to introduce competition wherever possible. Clearly the proof of the pudding will be in the eating, and we shall not be eating very much for a few years yet, but the process, the examination and the instructions that he has given have been satisfactory. The Committee would like to see, especialy in those large elements of expenditure on weapons procurement where one cannot get competition—for example, for a submarine —competition in the subcontracts that are placed, which is important. Further to that, Peter Levene has assured us that he is encouraging those firms that have not previously considered themselves as defence contractors to enter the field. The difficulty of entering the field is obvious to

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anyone in industry, but given the right encouragement this can be done, and that will introduce competition in a way that would not be possible otherwise.
We are pleased, too, with the way in which Mr. Peter Levene is trying to eliminate gold plating. That is the system whereby one waits for the very latest update and then tries to incorporate that into one's weapons system, so that one has the very last word. The importance of Mr. Levene's work is that he sets a date so that one will not get something which is right up to the minute, but something that will work in the time scale required. It is no use having a weapon that is never ready because it is always being updated. Almost equally important is the fact that, once one starts adding to and altering specifications, control of costs is lost. That is a lesson that we have had again and again. We find that the way in which Mr. Levene is tackling this is satisfactory, and we hope that it will lead to results in the next few years.
We felt that it was important for the Ministry of Defence to have a strategy for reconciling the conflict between the objectives of securing competition and preserving a viable warship building industry, and for it to give warship builders sufficient information for them to plan efficiently.
We welcomed evidence that financial control and project management of the main programme for Trident appeared to be operating reasonably, and that the programme costs had been reduced overall in real terms. We noted the constraints on competition in Trident work, particularly submarine production, but we were concerned at the lack of control on the size and cost of the atomic weapons establishment programme, which is not charged to the main Trident programme, although it is obviously vital to its successful completion. The atomic weapons establishment programme increased from nine projects, valued at about £134 million, in 1980 to 32 projects in 1986 with an estimated cost of £1 billion plus on a worst cost basis. Cost increases and delays illustrate the dangers of departing from accepted control procedures, which I mentioned earlier.
The MOD should have ensured from the beginning that arrangements at the atomic weapons establishment were as good as those for the main programme and that adequate co-ordination existed between the two programmes. The Committee was worried that the resulting reliance on the use of existing aging facilities at the Atomic Weapons Establishment and, taking account there of staff shortages, identified warhead production as a major risk to the Trident programme.
On all that we have received Treasury minute 501. On torpedoes and warships, it generally welcomed and accepted our comments. On Trident, it said that competition was sought where feasible and competitive subcontracts would be secured for submarines; that the works programme had been brought under effective control; that old atomic weapons establishment services can be used until new ones are ready, and that staffing will be kept under constant review. Obviously, a programme as big as that will be kept under constant review by the PAC. We would be failing in our duty if we did not go at least that far.
Let me deal now with the fifth of the reports that have been singled out for special mention—the review of
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operations of the Land Registry. The main point is that the Land Registry's business lies at the heart of land and property transactions. Therefore, the speed and efficiency of its operations are important to almost everybody. It is not so much its work as the impact that that has on other people's transactions and operations that is important. It really needs to be efficient, like the Companies Registry and other such bodies, not so much in its own right but because of its effect upon the rest of business and other communities.
On the face of it, the registry is a profitable organisation, spending £90 million a year and collecting fees of £140 million. That is a nice business to have. What did it do? Under Treasury rules, it was prevented from using that income to meet a major upsurge in demand. As a result, there was a large backlog of 400,000 unprocessed cases and long delays. It had 8,000 staff but its productivity had fallen well below 1982–83 levels. It is hard to think of any other area of clerical activity where efficiency would be reduced as much as that. There were continuing staff shortages and the registry was trying to regain lost ground from 1982–83 and computerisation had been delayed. Productivity was less than it was six years ago. I know that it had some problems then, but this was, after all, a number of years later. Despite that poor service, customers had been significantly overcharged in recent years and the fees needed to be reduced. Fairer and more flexible fee-fixing arrangements were required.
Such a monopoly, which has its effect on the community, is a serious matter and we recommended improvements in those and other areas. The Committee emphasised the importance of strengthening the registry's planning and management to speed up its response to increasing demand. We recommended a review of its management structure, organisation and location. There is no reason why it should be where it is. It could be in any part of the country. Speaking personally, not as Chairman of the Committee, may I say that it is sad that we have far too often accepted that congestion in the south-east means that people must be paid a bit more. That makes the area more attractive, more people come and they need to be paid a bit more again. It is a vicious circle that the Government and others should be able to break.
The Treasury minute was published only a few days ago. It accepted in virtually all respects the concerns expressed by the Committee and the recommendations made. Funding has been changed from 1 April 1988 to allow the registry greater freedom to use its full resources to meet changing work loads. Staff numbers are being increased and training improved. Output is being improved to cut the backlog as soon as possible. Higher standards of productivity, service and cost-effectiveness are being built into forward plans and computerisation is now moving forward. Fee arrangements are being closely watched and the need for fresh legislation is being pursued. There is a firm commitment to strengthening planning and management to meet increasing responsibilities and the registry is now being considered for agency status under the Next Steps initiative. We hope that that will lead to improved work by the registry. We shall wait to see and, like all the examinations that we undertake, we shall keep it under review.
I should briefly mention a couple of other aspects. In reply to the hon. Member for Norfolk, North, I mentioned the internal audit in the NHS. Also important is internal audit in Government Departments. The need for internal

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audit is becoming greater. It is not just certification that is important; it should be undertaken for value for money. It should be undertaken—not every firm does it—to ensure that a Department is as effective and efficient as it should be. One way of doing that is not to wait for the National Audit Office to produce a report every now and again, but for the firm to undertake the work itself. If Departments do that, when the National Audit Office comes, a useful relationship can develop between the Department concerned, the National Audit Office and the PAC. It should be able to ensure that adequate quality and quantity of resources will be provided and proper aims met.
Then we dealt with the Export Credits Guarantee Department. That has a number of uncertain debts and obligations because it has not carried out what we felt was the proper way of applying the Bank of England guidelines to the money that was lent overseas. Now there is an indeterminate amount of debt of doubtful quality. The sums of money can be substantial and we found that it had failed to meet one particularly important requirement.
A report that has only just been published, which is not strictly the subject of today's debate, relates to the royal ordnance factories. That will be covered in a subsequent debate. I would only briefly point out that the need for Government Departments to value their properties properly and effectively is of great importance. We need to ensure that whenever public money is accounted for it is done properly and that we have proper valuations. We may be going further into that in other areas, but the royal ordnance factories report stands on its own. Because there has been confusion on this, I would just point out that the royal ordnance factories were the subject of a report that was produced before the recent outcry and our further examination was a consequence of that.
Those are the matters that we have discussed and deliberated upon at great length. I am happy to say that we had a good working relationship within the Committee and with people outside. It is one of the great pleasures that we have such a happy relationship. It means that the effectiveness of our work can be that much more precise, accurate and valuable, and long may it remain so.
5.18 pm
Sir Michael Shaw: I am glad to follow the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who properly covered the wide area dictated by the motion. The Public Accounts Committee has done a lot of work and made a number of reports. The right hon. Gentleman has dealt with those which are of particular significance. One must take cognisance of the fact that the debated covers a year's work. Some of the reports are more than a year old and some of the Treasury responses are already nine months old.
We used to be very upset that our reports were not debated more quickly by the House, but I have since changed my view. One must accept the facts as they are and as they are developing within the Committee. As the right Member for Ashton-under-Lyne mentioned, in the old days the Chairman did virtually everything and ordinary Committee members had very little to do. I am glad to say that under the right hon. Gentleman's leadership that attitude has changed and all are brought fully into the discussions and the examination of witnesses. Indeed, it is hard to conceive of our working much more
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efficiently than we do. That is largely due to the right hon. Gentleman's leadership and I take this opportunity to thank him on behalf of the Committee for all that he has done.
Another change has been that the Committee no longer meets in secret. Now that we meet in public, the impact of our activities is far more immediate. That must be a good thing. The reports of the National Audit Office attract a certain amount of publicity and reaction, which sets the ball rolling. We then cross-examine witnesses and if we deem it necessary—we do not always do so—we prepare a report of our own which, in its turn, has an effect on the public and certainly on the Department concerned. The effectiveness of our work is thus far more clearly centred on the work that we do upstairs. It is significant that, as we discuss these reports, we already know the reactions not just of the Treasury but of the Departments concerned. A great deal has happened in relation to those reports before they are debated in the Chamber. This debate is therefore much more of a tour d'horizon, seeing how the system is working and picking up one or two special points in the year's work. Sometimes certain trends also appear which need picking out and emphasising.
Now that our meetings are nearly always open—not quite always, as some matters have to be discussed in private—there is the danger that members of the Committee may be tempted by the desire for publicity which, I am afraid, is never very far from the minds of Members of Parliament. I believe, however, that members of the Public Accounts Committee can take credit for the fact that we put that temptation aside and genuinely try to get on with the business of examination rather than headline-seeking or party politics. So far, I believe that we have been successful in that respect—here, again, our Chairman has given a very good lead—and long may that continue, because if ever we cease to abide by that precept the value of our Committee will largely disappear.
A major change this year has been the departure of Sir Gordon Downey. We wish him well in his future activities. He has played a notable part in developing the National Audit Office in its new form. I also join the right hon. Member for Ashton-under-Lyne in welcoming Mr. Bourn and hoping that relationships will be equally fruitful in the future.
Mr. Tim Smith: Does my hon. Friend agree that publicity for the Committee's work and reports is a great help? If we can expose some of the maladministration and inefficiencies of Government, that must be a good thing. And will it not be even better when the television cameras come to the Public Accounts Committee and the public can see for themselves the complacency of the accounting officers and the "Yes Minister" answers that we sometimes receive?
Sir Michael Shaw: I entirely agree. That is why I welcome the fact that our meetings are open these days. If they receive the publicity that they so often merit, that is certainly good, but if members of the Committee began attending meetings bent on seeking publicity for themselves or sensational headlines that would be a very bad thing. Frankly, after a number of years in this place, I am thankful that certain Members were never appointed to the Public Accounts Committee.
I should like to deal with certain specific reports, beginning with the seventh report. That report deals with

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the BBC external services, in which I believe strongly. They do an extremely good job. One has only to travel abroad to realise their importance. I draw attention particularly to paragraphs 29 and 31. Paragraph 29 states: "we cannot emphasise too strongly that the BBC External Services should, in common with other second-tier bodies funded by grant-in-aid, be directly accountable to Parliament through the audit of the C & AG".
I stress that point because the BBC is not examinable by the National Audit Office due to the terms of its charter and the way in which it draws its money from licence fees rather than from the Government. The external services, however, draw their money from the Government and it is right that they should be examined by the CAG and the NAO. To examine the external services accounts, we must have all the information and not just part of it. It was noticeable that in the past the BBC had refused access for the Exchequer and Audit Department, as it then was, but happily, according to the Treasury minute, there has now been agreement.
I emphasise this as a general principle as well as a specific one. Whether one is considering the BBC external services as a separate department within the BBC or a particular business function run by a local authority, if there is not access to all the information it is all too tempting to feed into a department being paid for by someone else overheads which should not exist in that department. It was therefore absolutely right that the CAG should insist on looking at all the facts and figures. Almost every year we have an argument with the Treasury and others about how much money is to be spent on the BBC external services. I wish to ensure that every penny that possibly can be used goes towards putting the message across to people abroad in the way that has been done in the past. There should never be any danger of any of that money being used to pay for overheads which, strictly speaking, should not be suffered by that department.
The 10th report deals with internal audit in central Government. The right hon. Member for Ashton-under-Lyne has already dealt with this and we have examined it in considerable detail over the years. I am glad to say that over the years we have noticed—whether as a result of our nagging or for other reasons—a great improvement in the internal audit service. In the past, it was regarded as just a temporary function of civil servants as they moved through the department and up to higher things, and I thought that that was a most unsatisfactory way to proceed. They were birds of passage, passing their time as quickly and as best they could, and then moving on to other things, and they had no expertise in internal audit, despite the importance of their having that expertise.
Things are now much better. The whole subject of internal auditing is taken much more seriously. The internal audit should be a vital management tool in the hands of the finance officer. I hope that this fact has been realised. It is significant that now, according to evidence given to us, the ideal period for somebody to work in the internal audit department is five years, and in that five years it is expected that full training will be given. I expressed doubts about whether all the high-fliers regarded this as seriously as they should, and suggested that they might try to avoid it as not being their cup of tea. I was assured that it was taken seriously and the finance officer, Sir Peter Middleton, whom I was questioning, said
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that he would use his power to the utmost to make sure that my doubts were unfounded. On page seven, at paragraph 2185, he said:
"You will see the statistics for people being promoted who have done internal audit improving quite noticeably if you give it another five years. There are two reasons for this: one is that we have been promoting a lot of people within internal audit as we have been improving the grading and secondly, they have not been out long enough to have been promoted in many cases."
That is in interesting contrast to the earlier evidence that we took. I hope that it is true. If so, there will have to be a different atmosphere within the Civil Service because there will be more emphasis on those who enter it, and those who proceed, expecting to be makers of policy. There will be fewer of them, and more people learning the skills of management because in many cases Departments are there to manage rather than to make policies. I know that the function of Departments is neither one thing completely nor the other completely, but more of a mix, and it may be that, as a result of what is happening, we shall get the right mix in the end.
The 11th report deals with the internal audit of the National Health Service. We did not spend too long on taking evidence, but it is an important report, and I have thought about it a great deal since we took our evidence. I asked questions when we took that evidence. The internal auditors at district level are appointed at district level and they work entirely within the district level. We have regions and districts and I know that there are arguments about whether that is the right set-up and whether the regions should exist. I am not arguing about that, because it is a matter of policy, but if we have regions and regional auditors, it is worth looking at whether the regional internal audit system should be aligned all the way down the line with the district audit system. That should not stop the district auditors having close contact at district level with the chairman and director, but there should be a much more direct contact with the regional internal auditor. That would be of benefit to everyone, and would ensure that everything is done as it should be. That is just a thought and a reflection arising from our questioning and study of the NHS internal audit.
The 26th report deals with the community care developments. The right hon. Member for Ashton-under-Lyne dealt with that in some detail, and rightly so, because it is one of our most important reports. I shall not go over the details again, save to say that many people are involved in community care and their number is growing rapidly. That means that we have to get our treatment of them right, and that the money that we spend on their care must be spent to the best advantage. It is not for us in the Public Accounts Committee to look at the policy, but it is our duty to see that the money is spent in the best way.
As a result of talking to various people, I have become worried about whether the resources and the planning are adequate to the growing needs of community care. In particular, I am worried that the responsibility for community care lies with no one authority. It is a joint responsibility, and I hope that the Government will look as carefully as they can at the way in which joint responsibilities are carried out. All too often, people tend to say, "Well, it is the other chap's duty to look after this or that." I hope that the final responsibility is clearly defined in every case.

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During their life, those in care may move from Government responsibility to local authority responsibility, and back to Government responsibility. I hope that those lines, and the responsibility, are clear. I also hope that when people are moved back into their homes or outside institutions full plans are made for their safe arrival in their new homes and that there are adequate safeguards to ensure that they are looked after. I am by no means convinced that in certain cases I have seen that is always so.
I am convinced that the work that we do is essential to the smooth running of Government. There is a job to be done and it is important that those of us who decide to join the Public Accounts Committee do not decide to do so just for a month or two, or even a year or two. If we join the Committee we must be prepared not only to put in the time to study reports, but to put in a number of years' service. The value of seeing the same pattern repeating itself is inestimable because of the influence that we can bring to bear on the Departments whose staff we interview. This is an important matter. We have seen it all before, and probably long before any of the witnesses started in that Department. That puts us at a great advantage—an advantage for the Government and for the country as a whole.
5.39 pm
Mr. D. N. Campbell-Savours: When the hon. Member for Scarborough (Sir M. Shaw) said that we had seen it all before, I was reminded of the fact that he is the most senior member of our Committee, with many years of responsibility for examining these matters. I listened intently to his contribution; if he saw me discussing something with my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) that was because we were talking about his reference to arrangements for audit at district, as opposed to regional, health authority level. Perhaps the hon. Member for Scarborough would care to raise the interlocking arrangement he mentioned in future proceedings on the matter.
Tonight I want to discuss other reports that are not on the Order Paper but which we are in a position to mention. I do not expect authoritative answers from the Minister today, but perhaps he will write to me about some of these issues in the future. I particularly want to discuss something that I have frequently spoken about over the years, drawing on a little new material, as is my wont each time that I discuss it.
I am concerned about defence contractors and procurement irregularities and fraud. In the appendix to our 35th report, we set out several cases of fraud against the Ministry of Defence which were allegedly perpetrated by defence contractors. Having considered all those cases together, I shall give the House my overview of them. The first case, which concerned the Aish company, resulted in £421,000 being refunded to the MOD; yet no prosecution was brought, for reasons of insufficient evidence.
The third case, which involved Thorn-EMI, resulted in £69,000 being refunded to the MOD, and again no prosecution was brought, as a result of a decision of the Director of Public Prosecutions that there was insufficient evidence. Case number 4 involved Rolls-Royce, and case number 5, involving Marconi, is now the subject of investigation by the DPP's fraud investigation group. In
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the sixth case, the name of the company is not identified, but as in the seventh, eighth, ninth, 10th, 11th, 12th, 13th and 14th cases, it was concluded that there was insufficient evidence of fraud.
The DPP refused to bring action in all those cases. Cases 16 to 24 also resulted in no action being brought by the DPP—but he instituted proceedings in two cases, which, interestingly, involved only companies that had gone into liquidation. Another case was brought against an official who had accepted a couple of electric kettles and a toaster. The prosecution was brought for minimal offences.
An examination of the prosecution policy of the DPP shows that in cases of major defence fraud no prosecutions ever seem to be brought. In case number 16,
"the MOD police investigation in 1986 revealed a prima facie case against the firm and/or its directors on fraud based charges involving about £40,000. However, the Crown Prosecutor decided that the evidence was not sufficient to justify a criminal prosecution."
I brought another case that made me angry to the Public Accounts Committee some years ago—that of Dowty Rotol. In that case, almost £500,000 was handed back to the MOD. There was clear evidence of fraud; I interviewed the chap who was involved in it through having been asked by his company to participate in it. Today he is unemployed. He was one of my five whistle blowers. He cannot find a job and has never been compensated. I want to know why no prosecution was brought in that case.
My preliminary view about defence contractors and fraud is that the DPP has decided that when it might be said that the reputation of a company could be damaged in overseas markets the DPP will not bring proceedings for fraud in a British court of law whenever possible. The list of cases I have mentioned shows that all the companies operating in export markets which were involved in fraud were not the subject of legal action by the DPP.
I quote from the case of Dowty Rotol:
"It was referred to the Director of Public Prosecutions who ruled, nine months later"—
following a great number of parliamentary questions from me—
"that it was not in the public interest to institute criminal proceedings."
What precious words
"not in the public interest".
In these cases, they mean that, when a defence contractor has markets overseas and its reputation may be damaged, no prosecution for fraud will be brought against it, even if there is prima facie evidence of major fraud having been committed.
Let us compare this with what happens in the United States of America. We suggested in our report that the Ministry of Defence should consider examining the hotline system in America—a system that enables people to ring in with information about Government Departments—especially the Department of Defence—to alert the American equivalent of our National Audit Office to fraud in the places in which they work. I quote from a General Accounting Office report that I picked up in Washington about three weeks ago. Referring to the hotline, it says:
"In its nine years of existence the GAO toll-free fraud hotline has received over 94,000 calls, of which 13,992 have warranted further review. Seventy per cent. of the latter were received from anonymous sources. Some of these were from Federal employees. Altogether calls from Federal employees

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totalled 26·2 per cent. and the majority of cases were reported to have taken place in California, with Washington DC coming in second place"—
that is, in the administrative head state of the United States.
It is worth considering what all this fraud reporting has meant. Here I am using another document produced by the GAO in America, a report entitled "Defence Procurement Fraud: Justice's Overall Management can be Enhanced". The Americans have set up a system called the FACT system. It provides an overview of all fraud inquiries and investigations and legal proceedings against defence contractors. The problem with the system is that it does not collect all the information. The report questions its ability to attract all the information that is available about prosecutions of American defence contractors:
"For the period October 1 1983 through to May 31 1987 the FACT system showed that Justice received 680 defence procurement and DOD-related fraud referrals involving 1,184 subjects for bribery of Government officials, conflicts of interest, anti-trust violations and procurement fraud. Of the 680 referrals 599 were sent to the US Attorney offices for action, 75 to the criminal division, six to another Justice headquarters litigation division. As of September 1987 211 referrals have been accepted, 183 referrals declined and 286 referrals were pending action. As of January 1988 the FACT system showed that Justice components obtained indictments on 180 subjects, of which 113 were convicted, 5 were acquitted and 62 are pending final court action."
I read this into the record to point out that they mean business in America. They bring actions in the courts; they do not sit down and work out whether a particular defence contractor's reputation might be damaged in foreign markets. If the law has been breached and a way can be found of prosecuting, the Americans prosecute—they do not dither like the DPP in this country.
I shall now deal with the question of whistle blowers who ring in on the hot line. Some are identified and they are in a particularly difficult position. We have had a number of whistle blowers in this country. Burgess Cooper from Dowty Rotol has been unemployed since blowing the whistle and may never find employment again. Other whistle blowers have been Don Pitman of Thorn-EMI and Jim Smith of Aish and Company. We now have Mr. Thrower in Preston, the man who gave information to me and to members of the Ministry of Defence police about allegations of fraud in Marconi.
It is interesting to examine the pressures that are exerted on people who have decided to be whistle blowers unless the state steps in to give them some form of protection. Don Soeken, an American psychologist, has done research on whistle blowers. He examined 233 whistle blowers in the United States of America and found that 90 per cent. of them had lost their jobs or been demoted, 27 per cent. faced law suits, 26 per cent. faced psychiatric and medical referral, 25 per cent. admitted to alcohol abuse, 17 per cent. lost their homes, 15 per cent. were divorced during the aftermath, 10 per cent. attempted suicide and 8 per cent. went bankrupt. The pressure on whistle blowers is extensive.
In the United States of America, an organisation called the Government Accountability Project has been set up to help whistle blowers. We do not have such an organisation here, although we need one. Whistle blowers are crucial to the Ministry of Defence in establishing what is going on in defence contractor companies.
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That brings me back to the report of defence procurement irregularities. If the Committee is to do its job properly, we need to be assured that we have the resources and procedures to ensure that information about defence contractors which are involved in fraudulent activities is made available to the people who can either prosecute or bring rapid action. Unfortunately, I have no confidence in the current arrangements. I have confidence in the new arrangements which Mr. Levene has introduced on the general question of defence procurement and in the substantial training that is carried on in his department.
However, if the Director of Public Prosecutions repeatedly fails to bring action against fraudulent defence contractors, the morale of those who are responsible for investigating those matters in the Ministry of Defence police and in Mr. Levene's own department will drop and those people will lose confidence. They rely on the Director of Public Prosecutions to bring legal actions, but he has failed in his public duty by bringing so few actions. I hope that every pressure will be brought to bear on him to review that position.
I want to deal now with the 33rd report and particularly with the evidence that we took from Her Majesty's Customs and Excise about VAT collection and fraud. The hon. Member for Scarborough referred to publicity. When I raised the matter, considerable publicity surrounded my allegation—and many of my colleagues may not have believed what I was saying. It subsequently emerged that the allegation was true.
The appendix to the report states:
"Offences are normally investigated for criminal proceedings when one or more of the following conditions apply: the evasion of at least £75,000".
I had uncovered the fact that the policy in operation was that, if someone was involved in a VAT fraud for a sum of less than £75,000, the chances were that he would not be prosecuted and a deal would be done behind closed doors whereby the money would be repaid. I understand that that system is called compounding. It is defined in annex A:
"Compounding is one of a range of sanctions available to the Commissioners of Customs and Excise. It is a process whereby as an alternative to taking legal proceedings for an offence under the Customs and Excise Acts, they may offer the alleged offender the option of being prosecuted or settling out of court."
The people concerned are invariably respected in their local communities. They will want to do a deal with the Revenue or with Customs and Excise because they do not want their names to appear in the newspapers in connection with a prosecution. However, they are the very people we should be prosecuting. I know that such prosecutions will cost a lot of money, but it will be a rapidly reducing sum, because the day that Customs and Excise announces that it intends to start prosecuting people for much smaller amounts of VAT fraud, many of the people involved in such activities will quickly pull their socks up because they will be frightened by the prospect of being mentioned in the local newspapers in communities in which they may be church wardens or chairmen of Rotary clubs.
The Government should look carefully at the principle of compounding and be a little more liberal in their attitude to prosecution. The Government's talk about the resources not being available is not the issue. We should frighten small VAT fraudsters into cleaning up their act by making it clear that we intend to prosecute. If the

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Government do so, they will quickly find that there is a rapid reduction in the number of people and small firms involved in VAT fraud.
It is invariably small firms that are involved. Large firms find it hard to cheat in that area because employees often want to break ranks. Such frauds often take place in small companies in which the chap who does the books is the proprietor or has some special relationship with the proprietor. We should be far more rigorous in our prosecution policy.
I turn now to our 22nd report. Our introductory paragraph states that that report
"concerns the arrangements for the employment of works consultants by government departments and health authorities where the PSA"
has been the biggest spender. Our report expressed concern about the arrangements for hiring such consultants. We were not convinced that competitive tendering had been the order of the day in all cases. However, we stated:
"We welcome the very recent reduction in the PSA's competitive tendering threshold to projects valued at more than £1 million. We acknowledge that it may not be cost-effective for PSA to abolish thresholds completely."
The whole question of consultants has come up in a number of reports in the past 12 months. For example, allegations were made, in which I played a part, about irregularity in the award of contracts for docklands development.
Development corporations are another area that we should consider. The PAC may well end up doing a full-scale inquiry at some time. All I am doing now is alerting those people who might be considering such matters to the fact that the Committee will inevitably have to consider development corporations. I make particular reference to the Milton Keynes development corporation. We all know what has happened in Milton Keynes. A development corporation was set up—I believe by a Labour Government—and a lot of public money was spent. Although I do not agree, I understand that the Government wanted to switch emphasis from development by a public sector organisation to development by the private sector. Although I argue against that, I accept it as the Government's ideological position.
When development corporations are wound up—the Milton Keynes development corporation will be phased out by 1992—a special responsibility is placed on the people who are responsible for that winding down to ensure that work is given out properly and fairly. One must ensure that, once work is awarded to the private sector, competition prevails and everyone has equal access to the cake. I am not convinced that that is the case in Milton Keynes. I am told that there, legal services have been given to a local firm of solicitors; that a landscaping contract has been awarded to a firm called Country Landscaping Design; that engineering contracts have been given to a company named Pell Frishman; that accountancy services are being provided by Touche Ross; that a national firm of estate agents is undertaking the strategic planning services; and that architectural services have been awarded to a firm called Planning Design and Development Limited.
Are the people who awarded those contracts absolutely sure that if, at some stage, the PAC examines the way in which they were awarded, and the way in which that work was tendered for, if it was, it will be satisfied that they are above suspicion? If not, let the people concerned get their
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house in order now. I give them advance warning that, in the event that an opportunity arises, I shall question them on those matters in detail.
Consideration should also be given to what will happen in 1992. I return to the subject of the Royal Ordnance factory land scandal, for want of a better description. I am told that, when Milton Keynes development corporation is wound up in 1992, a large acreage of land will be available for development. Some people put a value of £500 million on that land today. Let them know in Milton Keynes that that value is placed on it by someone here in Westminster. If that sum is not realised when the land is sold, uprated to 1992 values, then I shall be asking questions. We shall want to know that, in every way, that land, if its disposal is necessary, has gone to the private sector at its full market value.
I turn to the 18th report of the Committee, "Regulation of Heavy Lorries". When taking evidence, I sensed—as I believe did the majority of Committee members—that the Department of Transport was dragging its heels over the arrangements for weighbridges at British ports. Yet we know that in Kent there has been for a number of years a major argument that overloaded foreign lorries often enter the United Kingdom but manage to reach their destinations without being stopped by the police. Throughout the report, the PAC comments that the Department of Transport hid behind a lack of resources as an excuse for failing to deal with the matter. Several months ago, Kent county council produced a report showing that many of its own weighbridges were not even in working order. Such is the authorities' lack of priority in ensuring that equipment is maintained in perfect condition at all times to guarantee the maximum possible number of weight checks of vehicles entering Britain from the continent.
That report also drew attention to the fact that fitting improved suspension systems to all heavy lorries could save about £100 million annually in road maintenance. The Committee commented:
"We believe that DTp should have taken earlier and stronger action to encourage the use of vehicles which take advantage of available suspension systems and axle configurations which cause least wear."
The Department of Transport has not responded or legislated for and required that the authorities put in place the equipment required and that transport companies ensure the fitting of equipment designed to minimise road damage. If they had done so years ago, millions of pounds worth of damage that has already occurred, the repair of which will inevitably have to be funded by the taxpayer, would have been prevented—and even less money would have to be spent in future.
This is a crying priority. The Department of Transport must act. I hope that it takes the report very seriously. During our proceedings over the past 12 months, it was one of the reports most debated behind the scenes and away from the Committee Room. It was felt that the Department's position was indefensible. If I might say so, it was a disgrace.
6.4 pm
Mr. Michael Shersby: It is always interesting to participate in one of these debates, because the work of the Committee of Public Accounts is, from the

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point of view of most hon. Members and of the public, among the most important instruments in Parliament for ensuring that the taxpayer receives value for money.
There are 38 reports lying on the Table, constituting much material that could be examined in considerable detail by right hon. and hon. Members. I am only sad that there are not more of them present, as I see from looking around that most of the right hon. and hon. Members present are themselves members of the Committee. Although I have not in the past been greatly in favour of introducing television into the House of Commons, one factor that persuades me to change my mind is the hope that its introduction will cause some of our absent colleagues to take a greater interest in the Committee's reports and that we shall have an opportunity to examine them by the light of that wonderful medium and bring the oxygen of publicity to bear in sharpening up the accountability of Government Departments.
The Committee is an interesting one because it is by convention non-political. That it does not reach political decisions is an important aspect of our work and it contributes substantially to the agreement we reach over the reports that have been presented. I echo the remarks of my hon. Friend the Member for Scarborough (Sir M. Shaw) in paying tribute to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) for his unfailing courtesy and encouragement to all members of the Committee, which makes our work pleasurable as well as extremely interesting.
I shall focus on the 32nd report, "Review of the Operations of the Land Registry". Of all the reports we have considered and to which the Order Paper refers, this sticks in my mind because we were able to discover what was undoubtedly a most unsatisfactory situation. When the PAC examined the chief land registrar and his colleagues on 1 February, it was concerned to discover that there was a backlog of nearly 1 million items representing four months' work. Every right hon. and hon. Member knows only too well the importance of the registry's work to the average citizen. The evidence we received pointing to that considerable backlog was, I repeat, a matter for great concern.
The Committee was told that the cause of the backlog was a massive surge of work occurring between 1986 and 1987. However, having taken fully into account that surge, which is a matter of fact, we were disturbed to discover that, instead of productivity improving, it was deteriorating, and that in 1985–86 it was 6 per cent. less than in 1982–83. The levels of productivity ranged from 3·07 per cent. in Peterborough to 2·01 in Harrow—which, incidentaly, happens to be the office serving my constituents living in Hillingdon. The chief land registrar told the Committee that the reason for those variations was varying conditions. One was the difficulty of recruiting suitable people of the right calibre in the south-east of England. Another factor, at the Harrow office in particular, was that the conveyancing work was especially complex because that office is responsible for work involving properties in central London.
I am the first to admit that there is a considerable problem in recruiting suitable staff of the right calibre in a town such as Harrow. That points to the need for the Government to look urgently at the location of the Land
1222
Registry's offices around the country. If ever there was a case for moving them to areas where recruitment is easier and properties less expensive, this is it. But it is gratifying to note the improvement in productivity in 1985–86 and in 1986–87.
One measure taken by the Land Registry to deal with the backlog has been the transfer of responsibility for two of the London boroughs, Hillingdon and Hounslow, to Swansea—a somewhat novel development, but one that perhaps can point the way to the future and bring improvement in its train.
We are told that at Harrow—that hard-pressed office —a measure of computerisation is to be introduced, and we hope that that will result in a reduction in the backlog there, but I found it astonishing to sit in the Public Accounts Committee in 1988 and to learnt that
"a measure of computerisation was to be introduced."
Why was it not done years ago? Why is an organisation like the Land Registry still operating manually, with a quill pen system, when all around it are businesses operating very satisfactorily with modern computerised methods? I believe that the average property owner has the right to expect an office of this kind to use modern business methods, and to have a high standard of management with the resources at its disposal to do such a complex and responsible job.
At the time when we examined our witnesses, the registry had accumulated a surplus of some £84 million. That was in March 1986; by April 1987 the surplus had risen to £110 million. As the registry is a statutory monopoly, I think it particularly important—and I know that my colleagues agree, for they say so in the report—that the public are not overcharged for its services. But as our Chairman has pointed out in the report and subsequently, that has clearly happened. It is not good enough that a Government Department, responsible for the organisation, should have allowed it.
Fees have not been properly aligned with costs. We were told when we took evidence that lower fees were in prospect when a new fee order was approved. We understand from the Treasury minute that we have received that that order has now been made, and I hope that those who use the registry's work will pay less for its services in the future.
As I have said, the Land Registry's work is of great importance to everyone. The substantial backlog, poor productivity, large accumulated surplus and higher than necessary fees were features of the session in which we took evidence from the chief land registrar and his colleagues, and. I am glad to see that the position has been recognised in the Treasury minute. Alternative resource control measures have been introduced with effect from 1 April this year, and substantially more staff have been recruited to improve output and to reduce backlog.
We are told that a radical review is under way to establish what further activities can be moved from the south-east, and that plans for further transfer of responsibility for registration in certain London boroughs and south-eastern counties are being developed. I hope that my right hon. Friend will be able to tell us the extent of that development, what progress is being made and how much longer it will be before we hear about it. It is also encouraging to learn that the fees order has been approved and that that will reduce the ad valorem fees for most applications.
Paragraph 27 of the report bears quotation. It says:

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"In giving evidence to us, the Land Registry seemed to assume that the current level of activity, with its pressures on the Registry's performance and efficiency, is only temporary and that the level of transactions will return to 'normal' in two years or so. We do not think it is safe to assume this will happen, since changes in the pattern and volume of business could persist. If the present level of activity continues, we believe that planning and management will need to be strengthened to enable the Registry to respond much more quickly to increasing demands … We accordingly recommend that the position be reviewed and further consideration given, as necessary, to the management structure, organisation and location of the Land Registry."
I emphasise my belief that an urgent review of the registry's management is needed, and if ever there was a case for a change in the way in which it is run, it is made in the report. I hope that my right hon. Friend will be able to say whether the Government have yet reached a preliminary conclusion on whether the registry is to become an agency. It was established by Act of Parliament in 1862 and I believe that the time has now come to change the way in which it operates—to turn it into an agency and to ensure that it has the resources, the management, the modern business methods and the proper supervision that will provide a first-class service for all our constituents, so that they no longer have to put up with the delays and backlogs of recent years.
6.17 pm
Mr. Terry Davis: There have been several references to the unanimity that usually, indeed always, surrounds PAC reports; but it would be a careless observer who concluded that the unanimity of our reports reflected identical views. The speech by the hon. Member for Uxbridge (Mr. Shersby) illustrates my point: although we may agree about the report on the Land Registry, we certainly differ on the conclusions that we would draw as party politicians. I shall not, however, pursue the hon. Gentleman's point, because I wish to touch on several other reports.
As one of the newer members of the Committee, I associate myself with all that has been said about our Chairman. I had been a member of the Committee some years ago, in 1979, and I thought that I knew my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) quite well before I returned to the Committee a year ago. I can only say that the respect in which I held him before my return has been greatly enhanced—if that were possible—in the last 12 months. I have become a great admirer of the deft way in which he chairs our proceedings. The highest compliment that I can pay my right hon. Friend is to say that, although I thought his predecessor Lord Barnett very good, he is even better.
Just before my return to the Committee, there was a change in the appointment of the Comptroller and Auditor General. The House debated the appointment. I had some reservations about Mr. John Bourn's appointment as Comptroller and Auditor General, although I was not one of those who voted against the recommendation of my right hon. Friend the Member for Ashton-under-Lyne. All members of the Committee have, during the past year, come to respect the work of Mr. John Bourn. I have also formed a very high opinion of the work done by his deputy, Mr. David Myland, and all the other National Audit Office staff. We sometimes forget that it is the more junior members of the NAO staff who really do the work. I am sure that Mr. John Bourn agrees with that
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view, and I must tell the House that I have formed a very high opinion of the NAO's reports and the work on which they are based.
The shortage of hon. Members present to debate these matters has been commented on. I think that it would be much better if, instead of one all-inclusive debate involving 38 reports, there were several perhaps shorter debates on individual reports. Almost all of these reports are important. That is not surprising because there is a sifting process. It must be noted that not every investigation by the NAO results in a report, so reports are done only on matters which it considers significant. There is a second sifting because the PAC does not take evidence on every NAO report. It follows, therefore, that if we have taken evidence on an NAO report and produced a report of our own, there must be some significance to the subject.
It is obviously impossible to deal with more than a handful of the 38 reports before us. It might be better if we had debates by Department, and included PAC reports in debates on the reports of departmental Select Committees. That is a personal suggestion—I am not speaking for my colleagues.
During the past year, I have several times wished that we had more time for our work by being able sometimes to return to a subject because there have been times when accounting officers have not been able to satisfy us. Some have not come properly prepared and have been unable to answer all our questions. They are always willing to send information later, but that is quite different from being able to ask questions about that information at the time. Because the Committee meets twice a week, and because we have such a busy timetable, it is not practicable to recall witnesses very often. We have done it only once or twice during the past year. I appreciate that asking an accounting officer to return is a sort of sanction and that we do not want to do it too often, but I sometimes wish that it was possible to take evidence on a memorandum which we have received afterwards.
My right hon. Friend the Member for Ashton-under-Lyne said that fraud is rare. I agree. We have come across few examples of proven fraud during the past 12 months. My right hon. Friend mentioned the expenses paid by the Ministry of Defence to some of its staff. There are questions to be asked about decisions that were taken then and the Ministry apparently doing so little, or nothing, about it. There were no prosecutions and no disciplinary action.
My hon. Friend the Member for Workington (Mr. Campbell-Savours) referred to VAT frauds, which were the subject of our discussion with the chairman of Customs and Excise, and my hon. Friend rightly said that several decisions have been taken to compound those frauds. I disagree slightly with his assertion that the frauds were committed by small firms rather than large ones. My understanding of the evidence was that the frauds subject to investigation by the investigation division—which is supposed to be the elite—of Customs and Excise were frequently committed by large firms. Indeed, we were told that some were committed' by large-scale criminal organisations. The decision to compound the fraud is therefore all the more surprising.
We should contrast the treatment of such significant fraud with that of small business men who make mistakes. I drew the Committee's attention to a self-employed newsagent in my constituency who had recently set up in business. Although the newsagency belonged to a large

1225
business, he was on self-employed terms. The man made a mistake with VAT, and it was agreed to be a mistake by Customs and Excise. Nevertheless, he had to pay the VAT and a penalty. There was no doubt about the man's integrity, and when I compare the treatment he received with that given to large companies which commit VAT frauds involving many thousands of pounds, I am surprised by what appears to be public policy.
Mr. Campbell-Savours: My information, which I repeated, that small companies are more likely to be involved came from the person who told me about the £65,000 threshold. He went to some length to tell me that, in his experience, large companies are not involved.
Mr. Davis: I am grateful to my hon. Friend. Perhaps we are quibbling about the definition of large and small. I am talking about self-employed business men and he is talking about small companies. I was comparing one-man business with large companies. I suspect that my hon. Friend is talking about something in between.
Several examples of what I can only describe as fiddling came before the PAC. It would not be too strong to describe some of them as cheating. I refer to our evidence about "Financial Support for the Fishing Industry in Great Britain". The Government operated a Common Market scheme for the decommissioning of some fishing vessels. I am not questioning the motivation of the policy. It was decided that there was excess capacity, and that decommissioning grants should be paid. But the Marr company received £591,000 in grant as a result of returning a ship to fishing solely to qualify for grant. The vessel was doing seismic work at the time of the application. It returned to fishing for exactly 100 days and then went back to survey work. Members of the PAC will remember that, to qualify for grant, a ship had to fish for 100 days during a certain time. It was clear to me and, I think, other members of the Committee that that company had fiddled. It returned a ship to fishing for just as long as it was necessary to qualify for £591,000 worth of grant.
There are several small examples of cheating, and the Committee is right to draw attention to them. My hon. Friend the Member for Workington mentioned Ministry of Defence contractors, who often work on an even bigger scale. My hon. Friend's pursuit of those people, who are fiddling the taxpayer, should be admired.
The hon. Member for Norfolk, North (Mr. Howell) intervened in the speech of my right hon. Friend the Member for Ashton-under-Lyne to call into question our enthusiasm for value-for-money studies done by the NAO, and the hon. Gentleman referred specifically to the National Health Service. He has done that before. His concern for value for money in the Health Service takes on the appearance of a vendetta against it. Our experience in the PAC during the past 12 months suggests that there is a great deal of inefficiency and much money-wasting in many other Departments, not least the Ministry of Defence.
If I were to part company from my right hon. Friend the Member for Ashton-under-Lyne, it would be in respect of his regard for some of the accounting officers who come before us. It would be easier to single out those accounting officers who have impressed the Committee rather than those who have not impressed us.
Mr. Campbell-Savours: The Chairman could not say that.
Mr. Davis: My hon. Friend says, in effect, that the Chairman could not be so blunt.
Some of the civil servants who come before us appear to regard their role as being to defend the indefensible. Those who come before us and admit that mistakes have been made and that matters could have been better administered receive much kinder treatment and more sympathy from Committee members than those who pretend that everything is for the best in the best of all possible worlds.
My right hon. Friend referred to the fraud involving subsistence allowances and expenses at the Ministry of Defence. It is important to note that the permanent under-secretary at the Ministry of Defence told us that
"After going into it now with great thoroughness I think that the decision that was taken not to pursue disciplinary action against these men was on balance the right one."
I give that as one example of senior civil servants who are accounting officers and appear to take a much more relaxed view about inefficiency than Members of the House of Commons.
It is fair to say that there is far too much complacency among some senior civil servants. Hon. Members have referred to the National Audit Office report on community care developments and the report from the Public Accounts Committee. My right hon. Friend referred to the unrealistic attitude taken by the second permanent secretary at the Department of Health and Social Security, as it used to be. He appeared to think that the question of value for money, given the substantial amounts being paid through income support or, as it was formerly, supplementary benefit, to people who run private residential homes, should be decided by people resident in the homes. In practice, it is simply unrealistic to think that such elderly people can judge whether they are receiving value for money.
I asked the accounting officer what could be done to ensure value for money. He replied:
"We would say that profiteering in private homes, if it exists, is something that we would look to the market to rectify. If they charge too much then one would expect … people to be able to go elsewhere."
That is not the real world. If accounting officers take that attitude, we must question whether we are ever going to obtain value for money.
Similarly when the accounting officer was asked whether it was more cost-effective for taxpayers and ratepayers to provide for people to live in private residential homes or, alternatively, to provide for them to live in local authority homes, he was unable to tell us whether any study or comparison had been undertaken in any part of the country. That was a most unsatisfactory reply.
I refer to those accounting officers only as examples, but the complacency sometimes exhibited in the evidence that we took can also be seen in other respects. The National Audit Office report on community care developments referred to the shortage of district nurses and occupational therapists. It stated that there would be a shortage by 1994 if current recruitment and training patterns remained unchanged. The Committee asked a few questions about that and concluded that it was concerned that the shortages in nursing and therapy professions would adversely affect the implementation of plans and the

1227
standards of care provided. In new sums then we may also have been complacent to some extent because we underestimated the facts, based on the information given to us. Only this week, I was told that, in east Birmingham, 700 people are waiting to be assessed by occupational therapists. People whose condition is classed as urgent have been waiting four months to be assessed. The social services department says that the reason that those people are waiting in the most dreadful circumstances can only be attributed to the lack of occupational therapists.
There is, therefore, not only a need for the Committee of Public Accounts to maintain the work that it undertakes, but to be a little more questioning, within the limits of time—the Chairman is always anxious that we should bear in mind time constraints—than we have been, even in the past 12 months.
6.35 pm
Mr. Ian Cow: It is a matter of deep regret to you, Madam Deputy Speaker, as it is to the hon. Member for Birmingham, Hodge Hill (Mr. Davis), that our debate has been deprived of any representative of the Liberal party, but, although it is a matter of regret, it is not a surprise, either to the hon. Gentleman or to me.
This is the first occasion on which I have spoken in a debate on the reports of the Committee of Public Accounts since I became a member of the Committee. I was pleased to become a Committee member for three reasons. First, it has given me the opportunity to serve under the chairmanship of the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). I join Opposition Members and my hon. Friends in paying tribute to his chairmanship. Anyone who wishes to be instructed in the art of chairmanship would do well to come to our Committee when it is in public session and take a few lessons from the right hon. Gentleman.
Secondly, I was pleased to become a member of the Committee because I have always believed that one of the areas of highest priority of the House is to scrutinise public expenditure. I have always believed, and still believe, that there is a greater duty on those who spend other people's money to take care of that money than there is on us to take care of our own money. This place is a trustee for the proper spending of other people's money.
Thirdly, I was pleased to become a member of the Committee because I believe that it carries out effectively its task of scrutinising properly the spending of public money. That is why our debate is important.
There is another truth. The need for scrutiny of public expenditure will not diminish as the years go by. Only this week, my right hon. Friend the Chancellor of the Exchequer told us that the Government had in mind to spend £167 billion in the coming year. That is a greater sum in real terms than any Government have ever spent in this country, in war or in peace. Hence, although one might have believed that, as the proportion of public expenditure to total national wealth falls, there might be a diminished need for scrutiny of public expenditure, precisely the opposite is the case.
Further, whether our time in the House is long or short, I hope that there will always be those willing to serve on the Committee of Public Accounts, who will be vigilant in the defence of the proposition that other people's money requires continuing protection.
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I wish to devote my remarks to only two reports. The first is the 16th report which deals with the Charity Commission. I agree with the right hon. Member for Ashton-under-Lyne that sometimes the complacency and even self-satisfaction of the accounting officers who come before the Committee is a matter of the deepest regret. I shall illustrate that general proposition by reminding the House of the evidence given to the Committee by the former Chief Charity Commissioner. First, I shall remind the House of the Committee's unanimous findings. Secondly, I shall contrast the findings with the words of the former Chief Charity Commissioner. The Committee found that
"the Commission's register of charities is seriously out of date and unreliable and is ineffective … The Commission has adopted … a passive attitude to its registration responsibilities … We are disturbed at the … failure of the Commission to obtain annual accounts from charities … We feel that the Commission is too complacent … We regard it as unsatisfactory that the Commission has not devoted greater resources to monitoring and investigation work."
My hon. Friend the Minister for Trade is right to be in his place, and I am extremely glad that he should be there. It is not only he who has entered the Chamber, for sitting next to him is my hon. Friend the Member for Thanet, South (Mr. Aitken). Mercifully, both my hon. Friends are vigilant when it comes to public expenditure. They might be worthy successors to myself on the Committee of Public Accounts one day. However, I do not wish to be diverted.
I move to another finding of the Committee, which reads:
"we are astonished that the Commission has no qualified accountants on its staff."
A devastating exchange took place between a member of the Committee and the Chief Charity Commissioner, and we are able to read the precise words which were used. The hon. Member for Redcar (Ms. Mowlam) was in her place, as usual, during the cross-examination. First, let the House be in no doubt about the name of the former Chief Charity Commissioner. His name is Mr. Peach. He is a Commander of the Bath, no less. This is the exchange which took place:
"After five years as Chief Charity Commissioner do you think it would be unfair to describe this report as a massive indictment of the Charity Commission?"
Those were the words of the hon. Member for Eastbourne on 28 October 1987. The reply was as follows:
"It would be indeed unfair."
The hon. Member for Redcar, whom I almost describe as my hon. Friend, is being reminded of the very words that she heard on that day. I say to my right hon. Friend the Financial Secretary to the Treasury, who is to reply to the debate, that anyone in his old regiment or mine who gave that reply when an indictment of that sort had been read out and found proved by jury would have been the subject of the most harsh disciplinary action.
It has always been a matter of consternation to me that ministerial responsibility for the Charity Commission should rest with the Home Office. Legion are the merits of the Home Office—there is no dispute about that—and my hon. Friend the Member for Thanet, South will be the first to pay tribute to my right hon. Friend the Home Secretary. Nevertheless, it is difficult to understand what can be the logic in having ministerial responsibility for the Charity Commission falling with my right hon. Friend the Home Secretary and, unless I am mistaken, with my noble Friend Lord Ferrers. Am I right in thinking that Lord Ferrers is Minister of State, Home Office? I believe that I am. There

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is no need to have anything but praise for my noble Friend and my right hon. Friend, but I suggest to my right hon. Friend the Financial Secretary that logic requires that responsibility for the administration of the Charity Commission should be transferred at the earliest possible date from the Home Office to the Treasury. That is where the responsibility belongs.
In the report which was published in May 1987, the Comptroller and Auditor General stated:
"Charities"—
it was the right hon. Member for Ashton-under-Lyne who reminded us of this—
"are big business."
Yes, they are. That was said in April 1987, and even the Home Office would agree that we are now in November 1988. In that interval, charities have become even bigger business. The tax relief from which charities benefit is not one which diminishes as the years pass, save, of course, when the rates of taxation are reduced. Substantial benefit is still given—in my view, rightly—to charities. My right hon. Friend the Financial Secretary has no need to consult my right hon. Friend the Home Secretary. When he replies, I ask him merely to agree with the excellent suggestion that responsibility for the Charity Commission should be transferred with effect from 6 April next year to the Treasury.
A matter of deep concern was recognised in part of the Treasury's response. We must have confidence in the proper administration of charities or we shall have some awful scandal, as a result of which those who currently give generously to charity will be sceptical about continuing their donations. It is a matter of great urgency that we should do all that we can—we cannot do everything—to prevent improper conduct by charities, and we can do much more than we have been doing. What I am about to say is a criticism of the Home Office, not of my right hon. Friend the Financial Secretary, who stated in the Treasury response:
"The Commissioners share the Committee's concern that in certain important respects the Central Register of Charities is deficient."
The next sentence reads:
"They"—
that is the Charity Commissioners—
"have long recognised that an up-to-date computerised Central Register would provide a much-improved source of basic information about registered charities to the public."
This is all elementary stuff. Fairly modest businesses in Britain have computers. These are businesses that are not responsible for £10 billion for which the Charity Commission is responsible. If relatively modest businesses —I have no doubt that some of them are run by Labour Members in the new entrepreneurial spirit of the age, with others being run, no doubt less efficiently, by Liberal Members—can have computers, why cannot the Charity Commission? Why should the commission be such a hopelessly inefficient body? I welcome the undertaking that has been given by my right hon. Friend the Financial Secretary that we shall have legislation before the end of this Parliament to deal with these matters. When we come to the Gracious Speech in three weeks' time, I hope that we shall find that there will be a measure to reform the law of charity that will give greater powers to the commission.
I know that my right hon. Friend will tell the House that he cannot anticipate the Gracious Speech. Well, if it
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is not in the Gracious Speech now, he has three weeks in which to include a commitment to reform the law on charity in the coming Session. If he were to do so, I assure him that there would be widespread support from both sides of the House—even from the Social and Liberal Democrats—for an urgent measure to update the law on charities and to give greater power to the Charity Commission.
We are fortunate to have in the Chamber my hon. Friend the Parliamentary Under-Secretary of State for the Armed Forces. We are happy about the arrival of Ministers of the Crown. My hon. Friend the Minister for Trade is one of the most distinguished military historians ever to serve in this place. It is, therefore, timely to deal with matters relating to the Ministry of Defence.
We have heard a really amazing story. The right hon. Member for Ashton-under-Lyne rightly referred to the episode of the 90 civilians employed by the MOD, whose task in life was to journey all over the kingdom—even to Wales and Scotland. I think that only Northern Ireland was spared such a visit. They sometimes travelled by motor car, sometimes by train, sometimes apparently by both—occasionally on the same journey at the same time —and sometimes, no doubt, by air. They made those journeys over some considerable time. Hon. Members need not take my word for that—harken not to me but to the Comptroller and Auditor General. So that this may be preserved for all time, what that gentleman said can be found in his report, which is available in the Vote Office. He said:
"The losses statement—
that is, the losses in the MOD—
"on page 11 includes a sum of £203,416 relating to the falsification of travel and subsistence claims by certain MOD staff. In 1984 MOD Management Information highlighted the fact"—
my hon. Friend the Member for Norfolk, North (Mr. Howell) will wish to pay particular attention to this—
"that the searchers unit was absorbing 10 per cent. of the Army's total civilian travel and subsistence expenditure."
So 10 per cent. of all the costs of travelling, for example, all the way to the Falkland Islands and the whole of the subsistence and travel costs of the Ministry of Defence —the Army, the Navy, the RAF, the Royal Marines, the Territorial Army Volunteer Reserve—was being absorbed by those 90 people, not in some banana republic in central America but in this United Kingdom. What on earth is happening?
What did the MOD do when that astonishing saga came to light? Hold on to your seat, Madam Deputy Speaker, this is what it did—nothing. It was to that absence of action that the Committee drew particular attention. The hon. Member for Redcar was at my side when that great saga unfolded before the Committee.
To say that I am looking forward to my right hon. Friend the Minister's reply—he used to serve in the MOD and is therefore especially well qualified to comment upon such doings—is an understatement. I must say a word of praise for my right hon. Friend. I have a deep affection for the Treasury—a Department in which, for 10 glorious weeks, I served. I very much welcome my right hon. Friend's prompt decisions. I even offer one word of praise for the MOD. However, the decision not to prosecute any of those involved was not taken by Ministers. That was disgraceful. A decision not to prosecute in such a serious case of fraud should always be taken by Ministers. They were not consulted, which was quite wrong.

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I very much welcome the assertion in paragraph 55 of the Treasury response:
"The MOD accepts that in future Ministers should be consulted before disciplinary action is ruled out in any case of serious fraud."
I congratulate the Government on that decision. I welcome the reminder that the Treasury has sent to all Departments about the PAC's concern with fraud of any sort and its belief—which, I am pleased to say, is also the Government's—in the importance of maintaining effective controls to prevent fraud.
If we seek evidence for the belief that the PAC has an important influence on good government, we can find it in the reports that we are debating. It should be a matter of pride in the House that the Committee can be effective and vigilant, and it is a matter of pride to the Committee that it has the right hon. Member for Ashton-under-Lyne as its Chairman.
6.57 pm
Ms. Marjorie Mowlam: I echo the last words of the hon. Member for Eastbourne (Mr. Gow), paying tribute to the Chair of the Committee. New members of the Committee find it a little forbidding to learn its regulations and my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) has been incredibly helpful. It is certainly forbidding to be faced with accounting officers or permanent secretaries who are doing their utmost—and in the most complacent way—to avoid answering the question. I have to admit that it gives me some degree of pleasure to ask them over and over again a question that, first, they do not want to answer and, secondly, they do not think they should be asked, anyway. That is one of the few pleasures of serving on the Committee.
My right hon. Friend referred to value for money. It has been made clear to new Members that we serve on the Committee not in any party-political sense but to evaulate Government policy in terms of value for money. We have to evaluate whether Government policy works effectively, whether it is being implemented economically and efficiently. Those are the criterion for evaluating the policies before us.
My difficulty with many of the reports is that in considering value for money as defined in the reports it tends to mean the lowest common denominator of cheapness. It tends to be volume or quantity, because they are easy to measure. As the Committee Chairman pointed out, we tend to evaluate policy on the basis of economic effectiveness and cost benefit and value per head, rather than look at the much more difficult to measure, but essential, criterion of effectiveness. We must ask, "Is the policy effective in terms of the Government's objectives?"
I readily acknowledge that that is a difficult thing to measure, but some of the reports that came before us came to terms with that test and others did not. One report that has been referred to by many hon. Members which does not come to terms with measuring qualitatively the effectiveness of the Government's objectives is the report on community care policy. If we examine that report, we see that the policy objective we are evaluating is whether the Government—it is odd that the Government should have such an aim—have provided a better service, so that the patients' interests come first. We are told that that is the community care objective that we are evaluating. The problem that appears when we try to evaulate that policy
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objective is that it is not defined in a way that allows us to do it. For example, if, as the report clearly shows, we want to determine whether community care has been properly implemented, we must know what community care means.
Perhaps it seems a simple, naive question, but, in Committee, I asked the accounting officer whether I was correct
"in understanding when you defined community care that you talked about the quality of service and in that you were including such things as nightline services, counsellors for the caring, covering for counsellors"—
that is, when they are off duty or 24-hour cover—
"would you include laundry services, would you include meals, would you include training, … would you include warden services?"
The answer that we got from the civil servant was:
"I do not want to go right through that list but I would not accept all the width of that list".
After several questions, we did not get from the accounting officer a clear definition of community care. Without a clear definition, we cannot evaluate whether the Government's policy is properly implemented. Our job is difficult, and as a result we cannot evaluate the effectiveness of the community care programme. We are told that community care is working for the 8 million people concerned—the mentally handicapped, the mentally ill and the elderly—but, if there is no agreement between the NAO, the Department and the PAC as to what the policy objective is, we shall have great difficulty in doing our job properly.
Another report that came before the Committee was much more constructive in defining the policy objectives that we were examining. I refer to the report on the efficiency of DHSS front desks. We were trying to work out whether they served their clientele well. The NAO decided to have a public opinion poll of clients to see what is happening and whether clients consider that the service is meeting their needs—that is, whether the objective is being met—and whether they consider that they are getting the service that they demand. Clients were asked, "How long do you have to wait at the counter and how long do you have to wait for a letter?" The Committee got some frightening results in relation to the five to six hours that many people sit waiting in DHSS offices, but we were able to do our job properly because we had a clear measure of the effectiveness of Government policy.
When we look at the reports that were presented today and those that will be presented in years to come, unless we clearly define effectiveness, not just economically or in terms of a cost benefit analysis, quality will be a much more difficult thing to measure. Unless the PAC and the NSO come to terms with that, we shall not clearly evaluate the policy objectives of whatever Government are in power.
I wish to highlight one report, and that is the 28th report on matters relating to Northern Ireland. It focuses on the DHSS fraud investigation branch in Northern Ireland. It considers how efficiently the fraud investigation branch works in Northern Ireland. When we are considering the Government's objectives for benefit fraud investigation branches, it is useful to see what their purpose and functions should be. In non-party terms, the Government's policy objectives are to maximise the efficient use of taxpayers' money, to be sure that they correctly label people benefit scroungers, and to judge the public sector by the kind of results that it produces. We shall see whether the Department works in that way.

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According to the PAC's 28th report, such policy objectives are clearly not being met, bearing in mind what is happening on the ground in the DHSS in Northern Ireland.
The first problem that we face—it greatly concerned the PAC—was the DHSS ratio, set out in 1984, between benefits saved and administrative costs. We discovered that, for every pound it spent, it got £6 back in benefit saved. A 6:1 ratio is good and, we assume, efficient for the fraud investigation branch. However, we find that the potential value of the fraud investigation branch in performing its service is severely hampered by staffing. The number of staff in that DHSS branch in Northern Ireland is 10 per cent. below what is expected, and that has been the case since 1986. When the Committee asked why the figure was as poor as that, we were told that the Department has to be cash-limited and that, therefore, it must prioritise. In the Committee, it was not clear whether the Department is spending money efficiently in terms of getting the same ratio in the fraud investigation branch. There was no evidence to suggest that it would get better returns than 1:6 if it had proper staffing.
There is another problem in the DHSS in Northern Ireland, and it is repeated in many other Departments. I refer to the difficulty in knowing how to measure a Department's efficiency. A good example is the fraud investigation branch. If we want to know whether it is functioning efficiently—that is, if benefit scroungers, as they are labelled, are being caught by the fraud investigation branch—the obvious measure would be the total amount of benefit saved. That seems to be quite clear. However, the DHSS in Northern Ireland records only the number of what it defines as effective cases—that is, cases in which it has discovered or prevented fraud. We have no base line or no clear measure, since it defines as its policy objectives what it succeeds in achieving. Hon. Members will accept that that is not a fair measure of whether that Department is functioning efficiently.
The Department also faces great difficulty in knowing the exact number of people whose benefit is saved. Even though there has been an increase in the number of cases being dealt with by the Department, many cases do not involve prosecution and do not go before the Director of Public Prosecutions. In fact, 58 per cent. of cases that the fraud investigation branch discovers never go to the DPP. Apparently, such cases are too weak to stand up in court.
There is clearly a strong case for an inspectorate randomly to examine cases not taken to court to ensure that they are prepared properly and that the fraud investigation branch figures for non-effective cases are accurate and not exaggerated in any way.
In the short time that I have served on the Public Accounts Committee, it has discovered some serious problems which I hope that I have illustrated with the cases that I have brought to the attention of the House. It is difficult to ascertain value for money solely in economic terms. The National Audit Office is considering developing measures so that we can begin to ascertain quality much more effectively.
7.10 pm
Mr. Richard Page: As a relatively new member of the Public Accounts Committee, I shall be brief. Serving on the Committee is refreshing, in that we have no party political bickering, which is unusual for the House, and all members of the Committee work as a team with one aim: to ensure that the taxpayer gets value for money. They do so even though some members may not agree with the policies that are being implemented.
There is an old story about the four ways of spending money. First, when one spends money on oneself, one is desperately worried about quality and cost. Secondly, if one spends money on someone else, one is worried about cost but not too worried about quality. Thirdly, if someone spends money on me, I am worried about quality but I could not care less about cost. Fourthly, if someone spends someone else's money on someone else, quality and cost go out of the window. The latter method of spending money reminds me of some of the accounting officers and some of the reports that appeared before the Committee.
Like everyone else, I pay tribute to the excellent Chairman of our Committee. I do so from the heart, not because I hope that he will call me earlier in some of our investigations. I also express my appreciation of the National Audit Office which so lovingly presents its reports to us.
One worrying aspect of the reports has been mentioned in Committee, and I have no reservations about mentioning it here. That is the requirement that the National Audit Office must agree a report with the Department under investigation before it can be published. That could be viewed in the same light as a criminal having to agree the charges on which he is arraigned before the trial can begin. The National Audit Office should be able to highlight—perhaps in a different colour or underlined—the areas of disagreement and should not be tied down by the process of plea bargaining. That process may weaken the report and the advice given to members on how to direct their questions.
The fact that the Land Registry and the Charity Commission have been the subject of many speeches shows the anxiety felt in the Committee about the appalling state of both bodies. On the 32nd report, almost all hon. Members will have had examples of the tardiness of the Land Registry. Its operations are a growth activity. We are told that, during the past three years, there has been a 66 per cent. increase in operations. That must have been expected by the Land Registry, but its representatives seemed to be surprised by the increase and thought that it was unfair. May I counter that with some simple arguments?
First, several years ago, about 1 million council houses were sold. The figure has increased considerably, and it cannot be a surprise that some of those people will now wish to move home. It has not come out of the blue. That, together with the Treasury forecast of great economic activity, means that the Land Registry will have much more work, and it should have been more alert to the demand.
The minutes of evidence show our dismay with the progress being made, with productivity struggling to creep back up—despite computerisation—to the 1982–83 level. The Committee was worried that the Land Registry was not effectively tackling the staggering backlog. We were told that the Plymouth office had managed to attain 2·48

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units of work per person per day by January 1988. In an appendix to the report, we see that for 1993–94, when the great majority of titles will be on computer, the target is 3·05 units per person per day. I do not know whether the House regards that as satisfactory. It means that during the next six years that office will try to improve its efficiency by less than 4 per cent. a year. One wonders whether it will ever catch up with the staggering backlog.
We derive some comfort from the reaction of the Treasury. It states:
"The Registry has taken steps to set even more demanding targets as part of the improved resource control measures referred to above."
I hope that those targets are more demanding than the figures quoted by the accounting officers who appeared before us. If they are not, I have no confidence in the backlog being tackled effectively.
I refer to the Committee's 16th report, on the Charity Commission, with some diffidence. I was unable to attend the hearings as I was stricken in bed. I was doubly upset not to be present because I am the national treasurer of a well-known charity and I am glad to announce that its administration expenses are under 6 per cent. Any donations to that charity will be effectively and expeditiously applied. But it would be wrong of me to promote the Leukaemia Research Fund.
I shall not discuss the report in too much detail, because many right hon. and hon. Members have mentioned it. It highlights an almost staggering indifference among charities—with one exception—to the Charity Commission. One member of the Committee asked whether it was not deplorable that
"only 23 per cent. of the sample of the NAO had submitted any accounts to the Commission within the previous five years and only 9 per cent. of those who had not submitted accounts had been sent any reminder by the Commission."
That is unbelievable; it makes the commission a laughing stock. Although I welcome the Government's response, of establishing a computerised register of charities, I find it incredible—as my hon. Friend the Member for Uxbridge (Mr. Shersby) said in relation to the delayed computerisation in the Land Registry—that in 1988 a file of more than 150,000 charities is not already computerised. I wonder, because of the billions of pounds involved in charities, whether that is a sufficient response to discharge the burden of trust that is put upon the Commission. I find it incredible that today we are told that they should think it should be computerised. It is almost being held up as a dramatic and tremendous advance. I must say that I find that especially shameful.
The last point which I want to emphasise in this report is that of the investigation and the quality of the investigators. There is something especially wrong when fraud and abuse are perpetrated on charities—funded as they are by the goodness and generosity of people. We should be seen to be vigilant in the protection of that trust. Again, I express surprise that the Charity Commission does not have one qualified accountant. I am delighted to read in the Treasury's report that an accountant has been appointed to identify those types of charity which most need scrutiny so that available resources can be deployed with greatest effect.
It is encouraging that there will now be 14 officers able to investigate the cases. I understand from the report that they will investigate some 1,000 cases a year. I work that out to mean that in a fairly normal working week each of those 14 investigating officers will investigate a case every
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three days. I am not qualified to comment on whether three days is the average time needed to investigate a charity account, but it is obvious that the Charity Commission is relying on whistle blowers to initiate an investigation. The process is reactive and not proactive.
I echo the words of my hon. Friend the Member for Beaconsfield (Mr. Smith), who raised doubts about the suitability of the funding and of the structure to handle the monitoring of this vast area of public generosity. I must say that the Treasury minute is a sticking plaster and not the major operation that is needed to resolve the problem. I have no doubt that the activities of the commission will come before the House time and time again until matters are satisfactory.
I say with great deference and respect to my hon. Friend the Member for Eastbourne (Mr. Gow), whose skill, knowledge and wisdom are renowned in all corners of the House, if not the land—certainly in Eastbourne— that it will not matter a row of beans whether the commission is taken out of the Home Office and put into the Treasury until the restructuring has taken place, because it has at present all the ingredients of a major disaster. The Government ignore that danger at their peril.
Mr. Gow: And ours.
Mr. Page: Hon. Members can see that the opportunities for debate in the Public Accounts Committee are endless, and it is with restraint, and almost tact, that I do not stretch my few words even further to tackle some of the 30 other reports. I would like to believe that the sample put before the House tonight is indicative of the work that the Committee has done and the value that the Public Accounts Committee offers both Parliament and the country.
7.24 pm
Mr. Nicholas Brown: The House will be grateful to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) for his presentation of these reports. On behalf of the Opposition, I say that we wish to be associated with the kind comments made about my right hon. Friend and wish to express our thanks for the sustained hard work that both he and the Public Accounts Committee have put in during the past year.
The hon. Member for Scarborough (Sir M. Shaw) referred to the Chairman's personal approach to the Committee and the way in which he involved all members and contributed to the good working atmosphere. The hon. Members for Uxbridge (Mr. Shersby), For Eastbourne (Mr. Gow) and for Hertfordshire, South-West (Mr. Page) associated themselves with those kind and bipartisan remarks. As I said this time last year when we were debating PAC reports, the bipartisan way in which the Committee carries on its business is important to the authority that it lends to the reports when published and, of course, when they come to the House.
It is not possible to deal with all the Committee's reports tonight, but the Committee has highlighted matters that it wishes to draw to Parliament's attention. There are three themes to which I shall make special reference. The first is the frequency with which the Ministry of Defence features in Public Accounts Committee investigations and the second is the

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Government's privatisation programme. I shall also spend a little time considering the resources that are devoted to the prosecution of fraud across a range of Departments.
Before dealing with those matters, I offer a word of encouragement to my hon. Friend the Member for Workington (Mr. Campbell-Savours). I know that there are Conservative Members, and perhaps one or two Opposition Members, who feel that my hon. Friend does not need too much encouragement, but I offer it to him anyway. I strongly welcome the remarks that he made about urban development corporations being an appropriate subject for investigation by the Committee. I am convinced that there is cause for concern in the way in which some of those bodies are operating, and the public good would benefit from a long hard look at those bodies by the Public Accounts Committee.
My hon. Friend the Member for Workington referred to the issuing of contracts which I believe is a serious matter. In local government and in most public authorities, the authority decides what it wishes to tender for, and the tender is issued to people who are interested in bidding. The body issuing the tender then chooses which bid is the most suitable. That practice has always pertained in public authorities to avoid corruption. But some urban development corporations are doing it the other way round—choose the developer first and then discuss with him what is to be developed. There are obvious causes for misgivings in adopting such a policy, and a long hard look by the Public Accounts Committee would be timely.
I pay compliments to the speeches of other hon. Members on the three themes that I have chosen to discuss. The Ministry of Defence features in five reports covering the school of music, service hospitals, fraudulent expense claims, naval warships and weapons procurement and procurement irregularities. I presumed that the report on procurement irregularities would be about the auxiliary oiler replenishment ships and Harland and Wolff, but on closer investigation I found that it was not, and that was disappointing.
The 31st report draws the attention of the House to the need for the Ministry of Defence to draw a balance between preserving competition in naval procurement and securing the lowest possible price. So far, the Ministry of Defence's response to the reasonable point made by the Public Accounts Committee has been unsatisfactory. Almost at the same moment as the Committee was issuing its 31st report, the Under-Secretary of State for Defence Procurement came to the Dispatch Box to announce that the entire frigate programme for the year would be placed with one yard—and one yard only—thus denying orders to all the others. That decision is the exact reverse of the statement that the PAC has attributed to the Ministry of Defence.
The Ministry of Defence has not responded in a measured and open way to the Committee's request and that failure to respond, particularly about setting out its future procurement programme, is not only damaging to the warship building industry but may have disastrous long-term consequences for our national defence capability. The PAC was right to single out that report for debate and I hope that the points that it made go home.
The second report and theme with which I wish to deal is the Government's privatisation programme. Those
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matters are referred to in the Committee's 34th report. That expresses some doubt—a modest way of putting it —about whether the Department of Trade and Industry will be able fully to recover the £382 million of taxpayers' money that it sunk into Rolls-Royce before privatisation. The Committee makes a nice point about the value of sales incentives, which I hope that the Government will take on board. It says:
"departments should ensure that the taxpayer's interests are protected as effectively as future shareholders' interests."
That is important.
I should have thought that that point, regardless of political arguments about the rights and wrongs of privatisation, goes to the heart of such exercises. It is particularly important in the case of Rolls-Royce, because, as the Government have admitted, in that case there was no intention to secure a wider and deeper share ownership, which is the intention that has sat alongside some other parts of the Government's privatisation programme. Indeed, the Committee also has some points to make about wider share ownership, in particular about setting objectives before the exercise is embarked on rather than waiting until the exercise is halfway through and seeing where it is taking the Government.
Because the report is now some months old and was widely commented on when it came out, one would hope that the Government, and in particular the Treasury, had had a chance to consider the points made and, in the context of privatisation, to respond. But we know that next year we shall, among other things, be debating the 48th report which deals with the Ministry of Defence's sale of the royal ordnance factories. That report clearly says that the Treasury has learned little from previous PAC reports. It says:
"the Ministry of Defence did not themselves explore the possibility of redevelopment at Waltham Abbey and Enfield or obtain an alternative valuation of these sites based on the assumption that their redevelopment might be approved in the future. We note that BAe could make a substantial gain on their sale or development without benefits accruing to the taxpayer beyond the sale price paid by BAe."
That is the very point that was made in the context of Rolls-Royce some months before.
The Committee goes on to recommend, absolutely properly, that
"in any similar sales in the future, any feasible planning permissions likely to increase property values should be obtained before offers are invited."
Let us face it; if we were dealing with our own property, not that of the state, each and every one of us would make sure that we knew the real value of what we were selling before we sold it. It is a pity that the Government have not done the same with public property.
My third point relates to the resources devoted to the prosecution of fraud, not just financial resources, but energy and commitment. Indeed, my right hon. Friend the Member for Ashton-under-Lyne referred to the difficulties that the Committee occasionally comes up against in that area.
Five reports seem to have some bearing on that matter —the 28th report on Northern Ireland, the 33rd report on Customs and Excise investigations of fraud and smuggling, the 16th report on charities and two reports relating to the Ministry of Defence, one on fraudulent expenses claims and one on procurement irregularities. A common theme which runs through each of those reports, even though they relate to different areas of public

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endeavour, is that all of them, to different degrees, say either that there are insufficient resources or that there is insufficient vigour in the pursuit of fraud.
My hon. Friend the Member for Workington referred to specific cases of fraud by defence contractors. I want to add to what he said, but to put it in a slightly different context, although I agree wholeheartedly with his comments.
My hon. Friend the Member for Redcar (Ms. Mowlam), who has special responsibilities for Northern Ireland, rightly referred to the report on the work of the fraud investigation branch and made some pointed comments. The PAC says:
"We do not accept the argument put forward by DHSS for leaving staffing vacancies in FIB unfilled for almost two years".
The report adds:
"We are firmly of the opinion that such additional staff as are considered necessary for fraud investigation work should be appointed without delay."
Having made that point about resources for social security frauds in Northern Ireland, the Committee goes on to make an even more worrying point:
"We strongly recommend that special exercises should be mounted from time to time to ensure that social security offices and other benefit branches are not closing cases which should be submitted for prosecution."
The House should consider the circumstances that lie behind such statements and the nature of fraud investigation work in social security benefits in a community such as Northern Ireland which is riven with problems. The Chairman of the PAC rightly referred to the special difficulties that pertain in Northern Ireland.
When the PAC makes the case for extra resources, they should be allocated. I should have thought that the Government would willingly respond to that. I suspect that they may be less enthusiastic in responding to some of the other points that I intend to make about the pursuit of fraud. The Government have always been enthusiastic about pursuing poor communities and working-class fraud.
Let me move on to a point made by my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) about big companies being treated in one way and smaller organisations being treated in another. That relates directly to the 33rd report dealing with Customs and Excise issues. The report makes two points strongly. It says:
"We are concerned that staff shortfalls are a continuing feature, especially in London and the South East."
There are two conclusions to be drawn from that. The first is that the case is made out for resourcing, as it should be, and the second is that it could be argued, as the report does, that there is a need to relocate to somewhere such as Newcastle upon Tyne—
Ms. Mowlam: Or Redcar.
Mr. Brown: At least in the northern region—and to ensure that proper resources are allocated.
The report also expresses concern on the subject of scale and the fact that it is easier to pursue smaller matters than larger ones. I am sure that we do not want that situation to continue.
Many Members have referred to the 16th report, which deals with the Charity Commission and was also highlighted for debate. I strongly agree with the key conclusions of that report. I am especially concerned to
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note that the Public Accounts Committee, given the very moderate language that it uses when presenting its views, felt the need to state so boldly:
"We are gravely concerned at the risk of fraud, abuse and maladministration involved in the massive and increasing resources devoted to charities."
That is a very strong way to put it. As has been pointed out by Conservative Members, the report says:
"We regard it as unsatisfactory that the Commission has not devoted greater resources to monitoring and investigation work and has never established a system of positive inspection of selected charities";
and:
"Given the need for expert analysis of accounts and financial information, we are astonished that the Commission has no qualified accountants on its staff and apparently sees little need to recruit any."
We understand that there has been a response to that, but it is an extremely serious state of affairs and it is impossible for any of us who care about the role of charities in our national life to leave things in their current state. It is a question not just of the resources to pursue fraud but of willingness to pursue these matters and to carry out the proper monitoring function that many of us believed that the Charity Commission exercised. I am convinced that if this issue is not addressed at once the House will wish to return to it, perhaps through the Public Accounts Committee.
That brings me to the two reports concerning the Ministry of Defence. The report dealing with fraudulent expenses claims is as clear cut as one could ever expect to see. The disgusting thing is not just the fraud, which is disgusting enough, but the failure to follow it up properly when it was discovered and, as the Chairman of the Public Accounts Committee pointed out, the involvement of Army officers. The affair does not reflect well on the services and the Committee was right to highlight the report for debate.
That leads me on—I was going to say "nicely", but that is probably the wrong word—to the 35th report, which also deals with fraud in the Ministry of Defence although in a slightly different way. The report stresses the need to keep the matter in proportion in terms of the Ministry's total budget—a nice point and properly made—but states:
"We note that all the prosecutions undertaken arose from relatively straightforward cases of employee misbehaviour rather than from complex corporate fraud; that several prosecutions were either not undertaken or were unsuccessful because of the insufficiency of the evidence; and that the strength of the MoD Serious Crime Squad is only 28."
That brings us back to the point made by my hon. Friend the Member for Hodge Hill about the tendency of those responsible for prosecutions to go for the type of case that can at least be brought to a conclusion and not to embark on cases which might be more complex and difficult, most likely through lack of resources to see the case through to a satisfactory conclusion. Despite the comment about keeping things in proportion, the Public Accounts Committee has issued a clear warning to which the Government must respond.
Having set the issues in the various reports about the prosecution of fraud in their context, I wish to refer briefly to the way in which fraud is dealt with elsewhere. The establishment of the serious fraud office earlier this year was carried out in such a way that it can handle only about 60 of the most serious and complex cases at any one time. The criteria for selection are therefore bound to be fairly

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narrowly defined—they will be cases in which the facts are very complex or the sum at risk very substantial or in which there is great public interest or concern.
In my view, that is not satisfactory. The best way to prevent fraud must be to ensure that such massive resources are devoted to its detection and subsequent prosecution that the incentive to undertake the crime is dramatically diminished. While staffing levels in organisations such as the serious fraud office and the other bodies that I have mentioned still oblige them to choose priorities, preventing them from pursuing all the cases that they would wish, crimes of fraud will continue. It is not just a question of the serious fraud office—there is also justifiable concern about staffing levels in the fraud division of the Crown Prosecution Service.
In conclusion, I repeat on behalf of the Opposition our thanks to all hon. Members on both sides of the political divide who do such good work for the whole House in the Public Accounts Committee.
7.46 pm
The Financial Secretary to the Treasury (Mr. Norman Lamont): There was a slightly mean article in The Guardian today referring to last year's debate as an exercise in self-congratulation. Given that such debates are not attended by many non-members of the Public Accounts Committee, I am not sure who else could do the congratulation, but I am certainly prepared to join in, as I believe that the congratulations are extremely well deserved. The Public Accounts Committee does a most valuable job. It spends a great deal of time on subjects such as external trade measures for agricultural produce, prison service farms, repayment arrangements for works expenditure of United States forces and other matters which do not often hit the newspaper headlines but in which the Committee rightly takes an interest as they often raise considerable issues in terms of efficiency and finance.
I join the hon. Member for Birmingham, Hodge Hill (Mr. Davis) in his remarks about the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). I particularly appreciated his opinion that the right hon. Gentleman had been an even better Chairman than his predecessor the noble Lord Barnett—I only hope that the remark will not spoil a long-standing and beautiful friendship.
Mr. Gow: For the avoidance of doubt, will my right hon. Friend reassure us that he does not read The Guardian from choice?
Mr. Lamont: I have to confess that I knew that the mean article had been written not because I read The Guardian but because I happened to have lunch with the man who wrote the article. When he drew my attention to it, I made it clear that I did not regard it as the most welcome of comments.
The Public Accounts Committee has come a long way since it was first appointed in 1861. Not very much has escaped its eagle eye since then. In its second report in 1872, the Committee expressed its agreement with the Comptroller and Auditor General in his criticism of the Army for exchanging a consignment of surplus bricks for blasting powder when the bricks should have been sold
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and the proceeds paid into the Exchequer. That episode is paralleled by some of the reports that we have been debating tonight.
I notice that the severity of the Committee could also be tempered with mercy. In its 1882 report, it concluded that the sum of £14·16s·2d paid in connection with the Dundrum lunatic asylum, Ireland, was not properly chargeable against the Vote, but since the officers responsible admitted the error, the Committee was disposed to agree that they should not be personally charged. We have had rather more severe judgments tonight and in some cases that is quite right.
The right hon. Member for Ashton-under-Lyne reminds me, if I needed reminding, that I am not just the person who has to reply to the debate annually, but a member of the Committee. I am aware of that, because I receive not only the working documents, but letters inquiring whether I am the source of leaks. I can reply to the right hon. Gentleman's latest letter by saying that I assure him that I was not the source of the leak on the report about which he was worried, and, although I know that motive is not necessarily good evidence in deciding who committed the crime, I cannot think of anybody who would have had less motive for leaking that report.
The right hon. Gentleman said that there are rather fewer reports being considered today than there were this time last year, because of the intervention of the election, among other things. None the less, we are considering a staggering 38 reports, and that poses quite a problem for me, even though the Committee has kindly starred five of them. I feel a little like the fielder in a cricket match who is told to go to a boundary and when he asks the captain which part of the boundary he should field on is told, "All of it.".
The right hon. Member for Ashton-under-Lyne and my hon. Friend the Member for Eastbourne (Mr. Gow), among others, have commented on the 16th report. I must correct my hon. Friend on one point. I was never a member of a regiment, which may account for my very short stay in the Ministry of Defence. Extremely serious issues were raised to do with the monitoring and control of charities, as a number of hon. Members have pointed out. Charities enjoy considerable tax privileges in law. They play a vital role in our society, in arts, social welfare, housing, education and, as the right hon. Member pointed out, huge sums of money are involved. Like him, I could hardly believe the figures when I looked at them. The total income of charities is some £12 billion and there are about 160,000 of them. Therefore, it is vital that the integrity of the charitable sector is secured and protected.
I share the concern that in certain respects the arrangements for preventing, protecting and dealing with the abuse of charities has been seriously defective, and is in need of reform. That is why my right hon. Friend the Home Secretary announced in January the acceptance of the recommendations made by Sir Philip Woodfield in his scrutiny report on the supervision of charities, and the Government committed themselves to legislation. My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) said that the Treasury minute is merely a sticking plaster when what we need is surgery. Although I cannot agree that a Treasury minute is mere sticking plaster, I assure him that we shall be introducing comprehensive legislation which will deal with many of these problems and implement many of the recommendations in Sir Philip's report.

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The report had recommendations directed to the realisations of the responsibility of trustees, reducing correspondingly the responsibility of the commissioners, but increasing the scale of their activities in respect of malpractice and detecting inefficiency. Sir Philip made recommendations for the clarification and strengthening of the commission's powers of investigation and intervention when there has been maladministration.
On the point raised by my hon. Friend the Member for Beaconsfield (Mr. Smith) about audited accounts, Sir Philip recommended that all the accounts of charities other than the very smallest should be audited and that they should be available to the public. He also made recommendations enforcing their submission to the commission. He recommended the tightening of controls on fund-raising, particularly when there may be manipulation of expenses or excessive remuneration—a point made by the right hon. Member for Ashton-under-Lyne.
The result of these recommendations will be that, as the Committee very much wants to see, greater resources will be devoted to monitoring and investigative work, the register will be computerised and accounts will be more frequently examined and action taken. Some of the recommendations require legislation. Our detailed proposals will be set out in a White Paper to be published early next year. Meanwhile, many of the recommendations not requiring legislation are being implemented, and these changes will mean that the commission is on course to become much more effective both in supervising and monitoring charities. This is already apparent in the increased scrutiny of accounts, from 4 per cent. at the time that the report was made to 20 per cent. by the end of the year.
We share the Committee's concern that the register is deficient. It recognised that an effective register is essential to the strategy of providing information relevant to monitoring and investigation. We need to develop a database of information about charities as a whole. For this reason, as the right hon. Gentleman acknowledged, consultants are conducting a study into the method of setting up a computerised charity data base.
I agree with the Committee that the risk of abuse of charitable status under the present supervisory system is unacceptable. I understand that the commissioners are taking urgent measures to improve the monitoring and supervising of the charities in advance of the legislation. The staffing allocated to monitoring is to be increased further. My hon. Friend the Member for Hertfordshire, South-West referred to a figure of 14 and this is to go to 39 by the end of this financial year. I share the concern that the poor level of submission of charity accounts prevents this exercise of monitoring. I also share the view that the accountability of trustees for the stewardship of funds for which they are responsible would be enhanced by the regular submission of accounts that have been professionally audited.
In short, the Government back the reforms, and agree with what the Committee has said. That is why, this week, we have invited Parliament to approve a winter supplementary to raise the money available to the commission to carry forward the proposals arising from the scrutiny study and to put them into effect.
The right hon. Member for Ashton-under-Lyne spoke about the relationship between the Public Accounts Committee and the agencies and he has written to the
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Government recently about this, setting out the Committee's views. The Government entirely agree with the Committee about the importance of proper arrangements for ensuring that these agencies are accountable to the PAC and the House, and we are considering what the right hon. Gentleman said. By and large, we agree with it, and we shall reply in detail fairly soon.
The hon. Member for Workington (Mr. Campbell-Savours), who has apologised for not being able to be here for the end of the debate, asked several questions, and perhaps it would be for the convenience of the House if I replied to them by letter. He raised a point that was also touched on by the hon. Member for Hodge Hill, who commented on the practice of compounding by Customs, and the decisions about when to prosecute. This is a difficult problem, and I shall draw it to the attention of my hon. Friend the Economic Secretary to the Treasury. Customs always prosecute professional criminals, fraudsters, second offenders, those who have committed substantial fraud and offenders in special positions of trust. Experience shows, however, that comparatively small-time fraudsters are rarely, if ever, sentenced to long terms of imprisonment. They tend to be given suspended sentences or fines which can be considerably less than those imposed in out-of-court settlements. From the Exchequers' point of view, the current practice is more in the public and taxpayers' interests. More substantial penalties are obtained and taxpayers do not have to pay the costs of trials. That is the guiding principle behind the practice.
I shall reply by letter to what the hon. Member for Workington said about whistle blowers.
The hon. Member for Newcastle upon Tyne, East (Mr. Brown) remarked on some of the comments made by the PAC about privatisations. He particularly referred to the capital injection before the flotation of Rolls-Royce. That injection was given on the basis of professional banking advice and was consistent with successful flotation. The advice we had was that the health of the company and the flotation would be endangered, and the market's view of it would be bad, if we had riot given the injection. We recovered the full proceeds through the flotation—
Mr. Nicholas Brown: Does the right hon. Gentleman accept that the implication—although it was nicely put —of the PAC report at the time was that the chairman of Rolls-Royce twisted the Government's arm pretty far up their back for an extra cash injection before privatization, without which he said he would not have felt able to privatise at all?
Mr. Lamont: The negotiations were tough: I was the person involved. I remember them extremely well, and neither side got exactly what it wanted.
Several hon. Members referred to the 26th report on community care developments. It is an extremely comprehensive report with myriad recommendations for joint projects between local and area health authorities. The report covers joint financing, monitoring and the effectiveness of community care, and makes certain pointed comments about the fees charged in residential care.
The Government are fully committed to promoting the development of high quality community services so that people do not have to stay in hospital longer than

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necessary and are helped to live as independently as possible in the community. That is not a cheap policy, which is why we share the Committee's view that one of the key objectives must be value for money. It is all the more necessary because resources for community care have expanded considerably, having had, as the Committee emphasises, a significant contribution from social security funds.
It was in this connection that Sir Roy Griffiths was asked to review community care and Lady Wagner carried out her independent review of residential care. The Government are considering the recommendations in both reports. I appreciate that our conclusions have been long and are anxiously awaited, but these are difficult issues. Our conclusions relate to some of the points made by the Committee.
My hon. Friend the Member for Scarborough (Sir M. Shaw) touched on joint projects and financing between local and area health authorities. The Government are firmly of the view that there is scope within existing structures for health and local authorities to continue to improve ways in which they plan and work together. There are many examples of successful and innovative projects of this sort. We agree with the Committee that we need fully effective joint planning arrangements; they do not exist in all parts of the country. We need to get the rest up to the standards of the best.
The Department of Health shares the Committee's view of the importance of improving control over the financing of these joint finance schemes. The Department has written to the regional and district health authorities asking them to ensure that the procedures comply with the Department's guidelines. The Department of Health also recognises the need to improve information and monitoring systems and the performance of local authorities with them. I very much agree with the point that the right hon. Member for Ashton-under-Lyne is reported to have made in Committee about how one cannot rely only on the consumer to evaluate value for money. Resources must be put into independent assessment of how effective and up to standard these institutions are.
The right hon. Member for Ashton-under-Lyne also commented on the rapid growth in residential care for elderly people. Hon. Members may be interested to hear that in 1986, the latest date for which statistics are available, almost half the people living in residential care and nursing homes claimed no income support payments to meet their fees. They paid them from their own resources. Decisions about how financial support should be given to people in residential care and nursing homes cannot be made in isolation. The present system of setting national limits, which the Committee examined, is under consideration as part of the Griffiths report. Research carried out for the DHSS showed that basic charges for residential care homes were considered reasonable in more than 80 per cent. of cases that registration officers were asked to assess. Had the limits been set for homes at the levels recommended by registration officers, expenditure would have been somewhat higher.
I turn now to the point made by the Committee and repeated by the right hon. Member for Ashton-under-Lyne about clinical assessment of the need
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to put people into accommodation, some of whom could carry on their lives in the community. I am advised that the research quoted by the Committee and which formed part of its report shows that more than 90 per cent. of a sample of elderly people claiming income support in homes in four areas were assessed as needing residential care on admission and up to two years later. The 23 per cent. of claimants referred to by the Committee who could remain in their own homes were not from the whole sample, but from the group of people who had come in from the community rather than from hospital or from other forms of care. By the time of the study, only 7 per cent. of those people were assessed as being capable of managing at home.
As the right hon. Member for Ashton-under-Lyne acknowledged, we have acted swiftly to deal with a number of specific points. There is now a requirement for a record to be kept of social security payments received on behalf of residents by the proprietors of nursing homes. I believe that that is a necessary step and I therefore welcome it. Although we are awaiting the Griffiths report, there is much that local authorities and other providers of care can do to improve standards. I hope that they will realise that and not wait for the report's conclusions.
Several hon. Members referred to the 20th report, which deals with fraud among Royal Engineers Regiment ordinance searchers. My hon. Friend the Member for Eastbourne said that he was agog while waiting for my answer. I hope that his rapture will not be modified when he hears my reply. Perhaps I should not joke about the matter as I agree that this fraud was a sorry business. I share the anxieties that the Committee expressed and I agree with much of what has been said today.
The hon. Member for Workington alleged that action was never taken in cases of fraud. That is going too far. In a recent case at the Clyde submarine base, which caused some anxiety to several hon. Members, a number of people received prison sentences as a result of action brought by the Ministry of Defence.
In any case with which one is dealing, the key point is the availability of clear evidence. In the case of the Royal Engineers Regiment, the Director of Public Prosecutions decided that the evidence was insufficient to justify a prosecution, bearing in mind that the trial would have been lengthy, complex and expensive. Greater confidence in obtaining conviction would have been needed to justify proceedings. The Ministry of Defence similarly concluded that the evidence would not sustain disciplinary action.
The commanding officer, who called in the Ministry of Defence police, had been in the post for only two months, so no criticism could be made of his actions. Of the other officers in the unit, the most immediate supervisors were two troop commanders. Evidence against one troop commander was put to the Director of Public Prosecutions who concluded that the evidence, which did not suggest personal gain, was unlikely to secure a conviction. By the time that the decision was made, the individual concerned had retired from the Army.
No evidence was put to the Director of Public Prosecutions about the other troop commander. Any disciplinary action has to rely on the available evidence and not on speculation or supposition. After considering the evidence, the military authorities took the view that such action was not merited. One must remember that the supervisors were not the instigators of the abuses in the unit, which were of long standing. Strong views were

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expressed about the matter in Committee. Frankly, it is debatable whether the decision was correct. The standard of management fell short of the level that one would expect of public officials and the supervisors took insufficient action to check what was happening.
The right hon. Member for Ashton-under Lyne asked whether action was being taken to recover the outstanding money. I cannot tell a cheerful story about that. The Ministry of Defence has written twice to those concerned, seeking repayment. The Ministry of Defence has no powers to enforce repayment against the 42 searchers who are implicated in the case, or against those who have left, without recourse to civil law. As it is clear that the individuals will not repay the sums voluntarily, civil action is now being considered. The Ministry of Defence will have to weigh in the balance the legal advice that it has received on the evidence and the prospects of success in the case.
I agree that it is a profoundly disturbing case. The Treasury has reminded all Departments of the seriousness with which the PAC rightly views fraud and it has reminded them of the role of the serious fraud office, which can take over investigations from Departments. The Treasury circulates information about fraud that has been discovered so that Departments can apply the lessons to be learnt. Finally, we shall shortly issue further guidance to all Departments, making it clear that in cases of serious fraud Ministers should be consulted before disciplinary action is ruled out.
I should also have added that travel and subsistence procedures have been tightened up. All staff in the Ministry of Defence have been made aware of the requirements for handling the disciplinary aspects of serious fraud cases. When evidence of fraud is clear, steps will be taken to secure prosecution or disciplinary action. Any recurrence of fraud will be made more difficult as a result of the steps that we have taken, although I do not dissent from some of the points that have been made on the matter this afternoon.
The hon. Member for Newcastle upon Tyne, East and the right hon. Member for Ashton-under-Lyne touched on the 31st report, which deals with defence and warships. The hon. Member, in whose constituency Swan Hunter is situated and who always stoutly advances the case for his constituency in the House, made several comments about procurement policy, competition and batch ordering, particularly as applied to the type 23. I appreciate his constituency vantage point, but I must say that competition and batch ordering have saved the taxpayer considerable sums.
The right hon. Member for Ashton-under-Lyne referred to the Trident programme. Most of the points that he made are covered in the Treasury minute. He also referred to the capital works at Aldermaston—the advanced weapons establishment programme—which were a source of anxiety to the Committee. The works are an extremely important aspect of the Trident programme and the Ministry of Defence, in concert with the Property Services Agency, has already taken a number of measures to improve management and control, the main one being the introduction of a single experienced contractor working on an incentive basis to provide comprehensive co-ordination of the remaining stages of construction and fitting out. The right hon. Gentleman will be aware that the Trident programme as a whole—and he is right to zero in on particular aspects of it—remains on course to enter service in the mid-1990s on the due in-service date.
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A number of hon. Members raised the question of the Land Registry, such as my hon. Friends the Members for Uxbridge (Mr. Shersby) and Hertfordshire, South-West. I share the concern that has been expressed. The steady growth in owner-occupation, the right-to-buy provisions and the increasing frequency with which people move home have all contributed to the problems at the Land Registry.
In July last year we authorised additional resources for the Land Registry. As the right hon. Member for Ashton-under-Lyne acknowledged, from April this year we exempted the registry from gross running costs control which, as the Committee wanted, enables the registry to draw more readily on its fee receipts to finance the resources it requires.
To meet the rapid growth and to take the pressure away from its offices in the south-east where recruitment and retention have been difficult and where conveyancing has been especially active, the registry has opened four new offices, in Telford, Coventry, Hull and Leicester, in the past two years. Two further offices are planned for 1989. A further 1,000 staff—mainly local additional recruits—are now working in the new locations.
The registry has continued to give priority to pre-contract and pre-completion applications. It is the post-completion applications for substantive registration of new owners and mortgagees where the turnround times have been extended. However, the additional staff who are now being recruited and the new work initiatives which are directed to increasing productivity will lead to reductions in the backlog in the near future. Provided that there is not an unexpected increase in the work load, the changes that have been made should have considerable effect. My hon. Friend the Member for Uxbridge asked about agency status for the registry. We believe that it is right that the registry should remain in the public sector, but we regard it as a potential candidate for agency status, and that is now under review. Agency status could provide the further management and financial freedoms that are necessary to promote improved performance.
The hon. Member for Newcastle upon Tyne, East, apparently in order, referred to Royal Ordnance and the report—
Mr. Nicholas Brown rose—
Mr. Lamont: I am sorry, that remark did not imply anything. None the less, the hon. Gentleman surprised me by referring to the report on the disposal of the Royal Ordnance factories. The Government will reply on that in detail and I believe it would be a discourtesy to the Public Accounts Committee if I were to go into that matter in detail now. I am not sure that the hon. Gentleman did a great service in raising the matter at this stage. However, I can assure him that his arguments will prove to be ill-founded.
The price received for the sale of Royal Ordnance was the outcome of a keenly fought competition in the latter stages of which no fewer than six firms were involved. The price achieved was considered to be a good price by merchant bank advising the Ministry of Defence, and was regarded by the Government as representing a satisfactory return to the taxpayer. Any talk about sales of sites is speculative and dependent upon planning permission being received—it has already been turned down. In any case, any property gains must be balanced against the costs

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of relocation and of decommissioning and against the fact that the buyer of Royal Ordnance may have taken on loss-making parts of the business and loss-making contracts. The price achieved for the business of Royal Ordnance as a whole was achieved for a going concern, to be managed and developed by British Aerospace, in the best long-term interests of Royal Ordnance and its work force. We shall reply fully in a Treasury minute to the Committee.
Finally, I should like to join the hon. Member for Newcastle upon Tyne, East in thanking again the members of the Committee and those who have participated in the debate. The Treasury, of all Departments, very much appreciates the work of the Committee, which underpins our own objectives.
Question put and agreed to.
Resolved,
That this House takes note of the 1st to 36th and 41st Reports and First Special Report from the Committee of Public Accounts of Session 1987–88 and of the Treasury Minutes on those reports (Cm. 307, 323, 367, 410, 502 and 509), with particular reference to the following Reports:—
Sixteenth, Monitoring and Control of Charities in England and Wales;
Twentieth, Ministry of Defence: Fraudulent expenses claims; Meteorological Services;
Twenty-sixth, Community care developments;
Thirty-first, Naval warship and weapons procurement; and
Thirty-second, Review of the operations of the Land Registry.

Mid-Downs Health Authority (Recruitment)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dorrell.]
8.24 pm
Sir Peter Hordern: Not long ago, I received a letter from 20 doctors in the Horsham and Crawley area telling me that 60 beds were out of action in the Horsham and Crawley hospitals; that the theatre operating lists had been cut by a quarter; and that most waiting lists had grown by over 20 per cent. The main reason for the shortfall in performance was the nursing shortage, which itself was due, in part, to the cost of housing but also to the lack of employees because of the full employment in our area.
The hospitals are short not only of nursing staff but also of ancillary and office staff—perhaps even more than they are short of nursing and midwifery staff. Furthermore, although the number of people aged over 75 is rising throughout the country, the number of school leavers is falling. That represents a severe challenge in the future —indeed, in the immediate future. There are now fewer young nurses to look after an increasing number of elderly and sick people. That is the reality.
The letter from those doctors in Horsham told me that Horsham hospital is frequently full and closed to admissions. When I received the letter I made some inquiries of the Mid-Downs health authority, which sent me a full reply. I found that the rolls were short in the following ways: administrative and clerical staff by 12·5 per cent.; ancillary staff by 21·8 per cent.; nursing and midwifery staff by 7·6 per cent.; and works and maintenance staff by 25·8 per cent.
The district has 125 beds temporarily closed in the acute sectors, largely due to those staffing shortages. The situation is particularly acute at Crawley hospital, where waiting lists have risen by an average of 15 to 20 per cent.
I know that my hon Friend the Member for Crawley (Mr. Soames) is keenly interested in this debate and he has asked me to mention those facts because, like me, he is waiting for the Minister's reply, which I know he will study with great interest in Hansard.
The acute shortage of staff in virtually every area of hospital staffing is made worse by the rapid turnover in labour. I am told that the turnover of administrative and clerical staff is 23·5 per cent.; for ancillary staff it is over 50 per cent.; for nursing and midwifery it is 19·8 per cent.; and for works and maintenance staff 20 per cent. Not only is turnover expensive—I believe that an additional £2,500 to £3,500 has to be paid for each additional employee; it is also disruptive in terms of the training that needs to be carried out.
In Crawley—my constituency is in the same travel-to-work area—vacancies exceed the number of unemployed people at the moment. Of course, that is a happy position to be in but when it comes to recruiting extra staff for the Health Service, real difficulties must be resolved. The effect of such competition in employment has been to increase pay rates. The Mid-Downs health authority is now adrift in comparison with the local employment market by as much as 50 per cent. in some

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categories. I do not know which categories are the worst, but I would expect that they are the ancillary and clerical departments.
Another factor which must be taken into account is the cost of property for nurses and ancillary workers. In my area a two-bedroomed flat costs over £70,000. The minimum salary to support a mortgage of that level would be about £15,000, which is well beyond the reach of single staff in nursing and other professions.
What can be done about that situation? The Mid-Downs health authority has an innovative scheme for providing low-cost accommodation for single staff with a housing association on its own land. That proposition is being studied by both the Department and the Treasury. If the health authority is to be able to recruit, it must offer accommodation in addition to the necessary level of pay.
In other areas of employment, such as in business, it is the custom to recruit people and then provide them with a form of tied accommodation. Some time ago it was the Government's policy to permit tenants to purchase their own accommodation within the health authority. In so far as that arrangement worked, it tended to exacerbate an already difficult situation. When one considers that health authorities are exempt from normal planning procedures, one sees that, if they are successfully to recruit the necessary staff, they must be able to offer suitable accommodation within their own grounds. I know that the matter is being looked at by my hon. Friend the Minister and her Department, and by the Treasury. It needs their sympathetic consideration, if health authorities are to have a realistic chance of recruiting the staff they require.
One must not forget, either, the reduction in the number of school leavers and the multiplicity of jobs available to them. I refer to a particularly favoured part of the country; the same situation is not true of others. However, there is no reason why the Mid-Downs health authority or my part of Sussex should be any less well treated than other areas. Regional pay variations are absolutely necessary, in addition to any special efforts that might be made to provide residential accommodation. Pay variations are essential if we are to solve the problem. That applies not only to nurses but to ancillary workers, technicians and other staff.
Yesterday, by coincidence, I received a copy of a letter from Worthing district health authority, as part of my constituency is in its area. That authority is almost as badly off in respect of recruiting as Mid-Downs. The letter was directed at my right hon. and learned Friend the Secretary of State for Health. Worthing is going through an extremely difficult time in trying to recruit the number of people that it needs. As to pay variations, I believe that my hon. Friend and the Government accept in principle that there should be regional variations according to supply and demand. Pay variations are accepted in the Civil Service in the form of the London weighting allowance, and in other parts of south-east England, in business and industry.
In Sussex, there are rent allowances for the police. The payment of such allowances and compensatory grants to Sussex police officers now exceeds £4 million per annum, and about 80 per cent. of all officers now live in their own homes and therefore are entitled to a rent allowance. If that can be done for one part of the public sector, it can be done for another. Careful consideration should be given to any scheme that can be arranged to overcome the severe shortage of nurses and other trained people required in the
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Health Service. The police scheme appears to be a good one. In Sussex, we are not short of the number of police we are permitted to recruit; we are short of the establishment of police required. I commend that system of allowances in the police force as an example of what might be done in the Health Service.
It is not enough to say that there can be regional pay variations for people who work for the Mid-Downs or Worthing health authority, but that they must expect the extra cost to come out of budgets granted by the regional health authority. It must be recognised that pay differential costs should be included in the regional health authorities' budgets. Even so, the case for that would not be made unless one could plainly show a relative disadvantage in manning in the Mid-Downs area compared with other parts of the country.
I have the advantage, because I have two letters written to me by my hon. Friend the Minister—one more than a year ago, the other much more recently. In these matters, it is important to be sure of the statistics. I must admit at once that I have run into considerable difficulty. I regret to say that the Health Service—this has been the subject of many PAC reports—is not very good at providing up-to-date statistics.
When my hon. Friend wrote to me on 1 December 1987, she stated:
"I accept, however, that there is concern about the need for differential pay increases to reflect differing recruitment patterns in different parts of the country. I would certainly not rule out that possibility. But it would be important to target accurately any local premiums and to adopt a selective approach based on a full and up-to-date picture of the staffing position."
How very right she is. Just over a year ago, I put down a question to establish what was the relative staffing for nurses and midwifery staff. The figures I received were for the period at 30 September 1986—a year previously. Those figures concerned me because they showed that the South West Thames regional health authority's figure for nursing and midwifery staff was 8·21 per thousand population—the fifth lowest of the 14 regional health authorities.
However, as the Minister says, it is important to have up-to-date information. Imagine my surprise when my hon. Friend told me the other day:
"Detailed staffing information is collected from the NHS annually on 30 September. Because of the necessity for detailed checking and validating of this data, the final figures are not normally available until some 11 months after the situation date."
I dare say that checking and validation are all very well, but what I have wanted to know for a long time is how it is that those manning level figures are so out of date. I agree with my hon. Friend's comment in her earlier letter that it is necessary to have up-to-date information, but how can it be up to date when the fully checked and validated statistics are already 11 months out of date?
The need for a proper system of calculating accurate manpower statistics in the National Health Service is as great now as it ever was. I hope that my hon. Friend will be able to do something about that. I may add that the latest figures, which are really one year out of date, show that the South West Thames health authority had an even lower manning ratio of 7·9 per 1,000 population, which makes it the fourth lowest out of the 14 health authorities.
If the resource allocation working party system, which is designed to even out services throughout the country, means anything, those figures show that the south-east of England, and Mid-Downs health authority in particular,

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needs more nurses—and that attention needs to be paid to the acute shortage of ancillary and secretarial staff as well. It cannot be counted as a satisfactory policy if our region is so very far behind other parts of the country.
I want to emphasise the outstanding improvement in the National Health Service from the extra pay award. I devoutly hope that the increase, which will come through soon, will have a marked impact. I also welcome the huge increase in resources for the Health Service as a whole. That does not, however, invalidate the case for a regional pay policy: without such a policy, we shall not have equality of health treatment throughout the country. It is essential that a district health authority is not treated unfavourably because it happens to be in a regional health authority that has a London teaching hospital in its area.
This is a particularly vexed question. I have not been able to have a conversation with the regional health authority about it recently as the directors were not available, so I shall have to deal with it without their guidance. The truth as seen by the district health authorities is that the regional health authority has to spend a good deal on the teaching hospital—in the South West Thames authority it is St. George's—because it is new and very expensive. I believe—I hope that the Health Service review will accommodate this—that there is a strong case for taking all the London teaching hospitals together and not extending them so that they have a marked influence on the position in other parts of the country, as is the case in our region.
What we have found so unsatisfactory in the cases of both the Mid-Downs and Worthing health authorities is that money that should have been transferred to those health authorities has been extended to St. George's because it happens to be in our region. I dare say that it is all to do with not handing over resources too quickly, but my authority and Worthing have suffered because money has been handed over very tardily, if at all.
We have been accustomed to regional health authorities for some time. They draw up their own budgets and work out their capital expenditure and spending programmes, and I know that it is all done very carefully. To an outsider, however, it is extraordinary that a health authority should contemplate building a major hospital within two miles of an existing one. A visitor from abroad, if told that it was the policy of a regional health authority to take no notice of the presence of a satisfactory hospital in the neighbouring region which could be extended and to put up a brand new one within two or three miles, would conclude that we must be mad—as indeed we must be. But there is a proposal, which I believe is still under study, to construct a brand new hospital at Hove, within three miles of the existing Worthing hospital.
If there were no RHAs to compete with one another —if initiatives came from the ground—that could never happen. Alternatives could be provided. RHAs could say, "We wish to improve the facilities in other hospitals in our region now that we know that there is an existing general hospital within two or three miles of this one."
This affects my constituents particularly. We shall not have the facilities that we would have had if people had not taken leave of their senses in a peculiarly important matter. It is no small sum that the South-West Thames regional health authority proposes to spend. If only the
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two regions would talk to each other, things would go much more merrily, but what looks likely is a considerable waste of money.
I have given notice to no one, but this is not the first time that I have taken the matter up with the Department, and I shall continue to do so. As a matter of interest, I have sent the correspondence to the Comptroller and Auditor General, whose excellent report we have just been discussing. I hope that, if the RHA is seriously proposing to build the new hospital at Hove, it is aware that the CAG will be observing any transaction with the greatest interest, because it can only be concluded that it is a significant waste of public money, and the sooner it is turned down the better.
I must apologise in advance to my hon. Friend the Member for Hove (Mr. Sainsbury) for not informing him that I was going to say this, and I shall draw his attention to it in Hansard tomorrow. Nevertheless, he and I both know what is involved, and I think it absolutely necessary that we make the best and most economic use of our resources. These matters are much too important for rivalries to be allowed between one RHA and another. We must not only practise economy but devise a sensible system that will allow satisfactory facilities and increased pay on a regional basis in the way that I have described.
8.45 pm
The Parliamentary Under-Secretary of State for Health (Mrs. Edwina Currie): Let me start by congratulating my hon. Friend the Member for Horsham (Sir P. Hordern) on his success in the ballot. He is a doughty fighter for his consituents, and I commend his example to other, newer colleagues. They could do no better than follow his unfailingly courteous, thoughtful and constructive approach. I say that with some feeling, having listened to one or two other speeches from the Back Benches on health issues this week.
I note with pleasure what my hon. Friend said about the support given to him by my hon. Friend the Member for Crawley (Mr. Soames), who also makes representations on Health Service matters in his constituency. I also note the presence of my hon. Friends the Members for Stevenage (Mr. Wood) and for Maidstone (Miss Widdecombe)—whose own areas face similar problems —and my hon. Friend the Member for Fylde (Mr. Jack). I do not think that the manpower problem has hit Blackpool yet, but no doubt it will.
It is a delight to see my very dear friend the hon. Member for Ashfield (Mr. Haynes) who always graces the Chamber, and with such pleasure, when I am around. He is the only Member of the House who has offered me a personal compliment when I have been answering questions from the Dispatch Box. I am eternaly in his debt for that, and I shall not allow him to forget it either.
My hon. Friend the Member for Horsham has given the House the opportunity to discuss an important aspect of Health Service management, namely the need to recruit and retain staff in an increasingly competitive environment. The greatest asset of the NHS is its staff, and our ability to recruit and retain staff is crucial to the delivery of high-quality care. It is a measure of my hon. Friend's dedicated care for his constituents that he recognises that. He has, as he said, been in contact with Ministers in recent months about nurse staffing in the South West Thames

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region and the important points that he has raised about our pattern of knowledge of employment in the Health Service in general.
I am sure that my hon. Friend is looking to the near future, when the brand new 300-bed district general hospital will open at Haywards Heath. It will be known as the Mid-Sussex hospital. Of course there are considerable implications for staffing it: I am told that 30 extra trained nurses will probably be needed, partly because although this is a replacement hospital there will be more beds and partly because the design—as it is no longer Nightingale ward—will require more staff.
My hon. Friend spoke about employment data. It is worth remembering—this is no reproach to my hon. Friend—that the Health Service is the largest employer in western Europe, and that some 1·25 million names appear on its payroll. Any employment data that we might collect are bound to take some time to sort out. It is not simply a question of pushing a button on the computer and finding out how many staff we have. However, the computers are now in place, and—as I said in my correspondence with my hon. Friend—opportunities are arising to produce the information far more accurately and rapidly in future. Our slight difficulty at present is that the very process of generating for the first time the new data known as the Korner data is taking up an enormous amount of time and in itself is producing a delay, and I can only apologise to my hon. Friend.
Worldwide, we stand as one of the great employers. I understand that only the Indian railways and the Red Army are larger employers than the NHS, and if General Secretary Gorbachev is successful in some of the things that he is getting up to, the Red Army will end up smaller than the NHS—certainly if we continue to recruit at the rate of the recent past.
My hon. Friend asked about the review of the Health Service led by my right hon. Friend the Prime Minister. I am sure that he realises that I cannot say much about it, but he has made some sensible points and I shall ensure that they are drawn to the attention of the members of that review group.
My hon. Friend also asked about resource allocation working party money and how it is allocated among the districts. We agree that it is not allocated fast enough and that we need better systems to ensure that the allocation reflects the pattern of care that has developed in the neighbourhood, perhaps without freezing for ever that pattern of care. I am told that most RAWP money is out of Wandsworth as a result of changes at St. George's and that about £500,000 is to come out next year, starting in April. Mid-Downs health authority is set to gain significantly.
My hon. Friend mentioned district general hospitals at Worthing, Southlands and Hove. I should like to stress that no decision has been taken although, like him, I hope that one will not be too long delayed. The proposal is receiving careful study and the arguments that my hon. Friend advanced are foremost in our mind. The content of the proposed new hospital will be studied carefully to ensure that there is no duplication.
It is worth remembering that, on the south coast, in several health authority areas, more than one quarter of the population is now over 65, and their number is set to rise. They are heavy users of hospital services. We must take account of the fact that the pattern of care will have to respond to the pattern of need. I noticed that when I
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visited Eastbourne yesterday, where about 27 per cent. of the population is elderly. Some of the advice that I tried to give was that we must try to gear services to the people the service is looking after now and those it is likely to look after in future, although when the Health Service was established there were relatively few elderly people. The pattern of care 40 years ago was very different.
South West Thames regional health authority, in common with other Thames regions, faces pressure on recruitment and retention. One would expect that from their geographical position. The nurse staffing ratios show that South West Thames is in a relatively poor position. That is why, in my review in February this year of the region's performance, the subject was a major item on the agenda. The discussion that we had then gave rise to a number of specific pieces of action to which the regional health authority has given attention since. For example, we asked it to report to us on wastage rates and on intakes of nurse learners to ensure that the pattern of the most basic education is integrated properly with manpower requirements and financial resources. It is no good planning to train people if one has neither the money to train them nor the money to employ them at some stage. We asked it to make reports to us by 30 September on its mechanisms for identifying and correcting problems and to ensure that the pattern of nurse training schools is in line with recommendations of its education strategy. We have just received that report.
So far, what we have got is an excellent analysis of the region's nursing situation. An analysis is one thing—it is substantial: there are pages and pages of it—action is another. We have therefore put the subject on the agenda again for this year's review of the regional health authority and my Department will monitor progress closely.
It is no longer good enough for us to say that such and such a region or health authority needs more nurses. The pattern of demography is such that, in the south-east, we may be employing virtually everyone that is available. There may not be a pool of people from which we can draw additional nurses, physiotherapists, operating department assistants or any other group.
We are already the largest employer in the country. We are almost certainly the largest employer in most districts. It follows, therefore, that it will not be enough simply to say, "We need more nurses." I have put this point strongly in every regional review that I have done recently—we must consider retaining the staff we have and managing the career break much more effectively, particularly as the majority of staff are women, many of them young women, and many of them married with young children. We must look much more closely at the skill mix to ensure that the staff we can recruit are able to take up as much of the work as is appropriate for their level of training.
Even more important, we must ensure that we get some upskilling. In other words, if we have dedicated staff who have not for various reasons been able to train, we may have to develop schemes to enable them to do that. Many of those whom we employ are women and women traditionally have not taken up their education opportunities when they had the chance. I feel quite strongly that we should follow up, as far as we can, the opportunities to enable our staff to improve themselves and therefore the employment position of health authorities.
The Mid-Downs health authority, which covers my hon. Friend's constituency, operates in an employment

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market which is about as competitive as any in the country. It shares its pool of labour with other employers such as Gatwick airport. There is full employment. Crawley and the surrounding travel-to-work area has the lowest rate of unemployment in the country, at 2·1 per cent. That puts pressure on all sorts of things including wage and housing costs.
I am extremely interested in this topic and I have done some homework on it. The next lowest level of unemployment—2·5 per cent.—is to be found at Winchester and Eastleigh. That puts Crawley in some difficulty. I asked the Department of Employment to give me an age analysis of unemployed people. I have the figures for 14 July 1988, which covers the Crawley travel-to-work area, which is not quite the same as Crawley town, but it covers the health authority area pretty well. It is a depressing picture for anybody hoping to recruit more staff.
The total number of people aged 18 and under unemployed for one year or more and who might therefore be regarded as available was 10. Aged 19 and under, that figure increased to 21. There were fewer than 4,000 people on the entire register. The total number of people aged 19 or under from whom we might expect to recruit was 110, of whom more than half had been unemployed for eight weeks or less, and were presumably between jobs. There is no pool of labour in that area. We should not, therefore, be surprised to find vacancies in the health authority.
I should like to give my hon. Friend a flavour of the health authority's vacancies as they are not as bad as in other areas, which suggests that Mid-Downs is a good employer and doing a good job at retaining staff, but nor are they entirely consistent, which is rather curious. The establishment for nurses and midwives is 1,872, and the number in post at 30 September 1988 was 1,730. That means that 142 posts are unfilled, which gives a vacancy rate of 8 per cent. The main gaps are in qualifed staff, especially in orthopaedics, registered sick children's nurses, intensive care units, theatres—including operative department assistants—and premature baby units.
The Mid-Downs health authority shares this problem with many other health authorities in the south-east, although, according to some indicators, the nurse employment pattern is not too bad. For example, the turnover and wastage rates for nurses are both better than the regional average. In 1987–88, the authority's wastage rate for qualified nursing midwifery staff was 17 per cent. of total staff in post. In Worthing and south-west Surrey, it was 23 per cent., so Mid-Downs is obviously losing fewer people. The number of long-stay staff who have been with the authority for more than a year is 88 per cent. of total staff in post. That is far higher than, for example, in south-west Surrey, where the figure is 74 per cent. The authority is therefore managing to keep its staff.
Nurses are not the most problematic staff group in Mid-Downs. At the end of September, the health authority had a shortfall of almost 22 per cent. in ancillary staff, 12·5 per cent. in administrative and clerical staff and 25 per cent. in works and maintenance staff, compared with 8 per cent. in nursing. Perhaps its establishments for some of these other types of activity are too high. I find it hard to believe that a health authority can function properly when
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it is down by a quarter on its maintenance staff and by almost the same figure on its ancillary staff, but it may he coping reasonably well on that.
It is interesting to note that medical and dental staff are well over establishment. I too saw the letter written by GPs and want to put on record the fact that the health authority believes it needs 193 medical and dental staff. It has almost 203 staff—that is, in whole-time equivalents —which means that it has 9·52 more people, again in whole-time equivalents, than it has 9·52 more people, again in whole-time equivalents, than it needs. That is 5 per cent. over establishment. At a rough guess, that is probably worth about £200,000 a year. If it is not, I stand to be corrected, but that is rather a lot of money for the recruitment of new doctors when the authority needs more nurses.
Sir Peter Hordern: My hon. Friend is right. I suspect that my figures come from the same source. However, my information goes on to state that the extra people are explained by an addition of directly employed locum staff to cover sickness, holiday and maternity leave. My hon. Friend is right in saying that the authority might save £200,000 by not having those staff, but are they to have no holiday, sickness or maternity leave?
Mrs. Currie: So far as I understand it, the data are collected in roughly the same way for all staff and I therefore wonder whether the shortfall in the other staff includes those staff mentioned by my hon. Friend. I merely put that on the record as I know that this debate will be read with great interest by Mid-Downs health authority tomorrow. The letter that the GPs sent to the local newspaper stated:
"Surgeons and anaesthetists are finding spare time on their hands because over 25 per cent. of the operating sessions are cancelled, again largely due to nurse shortages."
I wonder why, therefore, the authority is employing locums. I simply put that fact on the record; I do not criticise the authority. However, it does not seem quite right that it has more doctors than it needs but does not have as many other staff that it needs. If those figures are accurate, as I am led to believe, I hope that it will try to put that matter right.
The authority has taken the sad step of closing beds because of nurse shortages. That has a general effect on activity levels. I caution my hon. Friend about using performance indicators which are available in the Library because they refer to 1986–87. They show that the total nursing staff in the acute sector is, at 1·13 per bed, closer to the national average of 1·15. However, those figures are probably now out of date and I promise my hon. Friend that the latest data will be available as soon as possible.
I am told that the authority is dependent upon bank and agency nurses. At 30 September, it was employing 87 agency staff and bank staff out of a total nursing establishment of 1,100 qualified staff. It spends between 5 per cent. and 8 per cent. of its £17 million nursing services budget on agency and bank staff.
The health authority had to make some efforts to find those figures. I cannot tell my hon. Friend exactly how much it spends on agency staff alone, but it does not appear to be very much if the total amount that it spends on bank and agency staff is between 5 and 8 per cent. I am not as troubled about the use of bank nurses because they

1259
are Health Service staff and using one's own bank is a sensible way of enabling staff who do not want to work full time to come in when they are available.
However, I wish to put on record my dissatisfaction that senior officers of the authority did not have this information easily to hand when I asked them for it this afternoon. They did not know how many agency staff they employed or how much they spent on agency staff and were not able to give me the figures. The figures that I was given were for agency and bank staff and they are not the same thing. I met Mrs. Tovey, the district nurse adviser, and Mr. Peter Catchpole, the district general manager, today. I asked them a string of questions to which they should have had the answers, but they did not. I put that on record because it is appropriate for those managers to be asking those questions and to have those answers.
There is some evidence of an imaginative management response from the district. It has recently produced, as required by the region, a strategy for the recruitment and retention of staff. My officials tell me that this is a comprehensive and, in many ways, imaginative document. So far, it is still a document. It proposes action, much of which is already under way, and there are about 30 points in total. These include improvements in working conditions, including the provision of a creche, which I understand is already running. Another point is the improving of arrangements for collecting information on manpower. As my hon. Friend will realise, there is some feeling of soreness about that. Another point is recruitment campaigns, including job fairs and the reviewing of recruitment literature. Some of the literature is good. The health authority is discussing preferential mortgage terms. I understand that it has been recruiting in other countries. I understand also that one of the proposals before it is to revert to having matrons. I am sure that my hon. Friend will have a view on whether that is desirable.
I have collected a good deal of other data on the Mid-Downs health authority, and I shall be glad to share
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it with my hon. Friend. It occurs to me that it might be more helpful if I were to include some of it in a letter. Having been critical about the health authority, I am aware that there may be further discussions during the next day or two on how it will come to terms with the criticism and cope with it.
In my judgment, it is not good enough that the authority should divert the resources that it had for nurse training to other things and then be surprised that the English national board should stop its nurse training altogether. It is not good enough that it should not know how many staff it employs, nor how the balancing of the budget is worked out between its own staff and agency staff, overtime and so forth. There is a great deal that the Government are doing, and I am sure that my hon. Friend will be aware of it. This includes a central recruitment campaign for nursing, which was successful during August. We may well run the campaign during the winter.
Sir Peter Hordern: My hon. Friend will recall that I spoke of a scheme that the health authority would like to put into effect. It involves the development on its own land of quarters for its nursing staff. Could she give that scheme a fair wind?
Mrs. Currie: I must apologise to my hon. Friend for overlooking that issue. It was discussed this afternoon. As the scheme stands, it involves unconventional finance. I advised the staff that a different approach should be taken so that it involves conventional finance, and then the authority will be able to get on with it. I have asked my officials to visit the staff of the authority to discuss with them exactly how that might be done. Rather than wasting a great deal of time arguing with colleagues about bending or changing the rules, it might well be done within the rules. I hope that that satisfies my hon. Friend.
Question put and agreed to.
Adjourned accordingly at seven minutes past Nine o'clock.

THE ARTS
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  Funding
  British Library
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TRADE AND INDUSTRY
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  Sale and Supply of Goods (Report)
WALES
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ENERGY
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FOREIGN AND COMMONWEALTH AFFAIRS
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NORTHERN IRELAND
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HOUSE OF COMMONS
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PRIME MINISTER
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AGRICULTURE, FISHERIES AND FOOD
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HEALTH
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SCOTLAND
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HOME DEPARTMENT
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  Gaelic Language
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  Detention Centres (Group 4)
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  Viraj Mendis
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  Traffic Predictions
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  Traffic Forecasts
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TRANSPORT
  A1 (Doncaster-Durham)
  A1 (Doncaster-Durham)
  Heavy Lorries (Speeding)
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  Birmingham Northern Relief Road
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  One-person Operated Buses
  One-person Operated Buses
  A19
  A19
  Road Accidents (Statistics)
  Road Accidents (Statistics)
  Part-time Traffic Lights
  Part-time Traffic Lights
  Motorway Construction
  Motorway Construction
  Residents' Parking Permits
  Residents' Parking Permits
  A27 (Worthing)
  A27 (Worthing)
  London Assessment Studies
  London Assessment Studies
  M1 (Traffic Flow)
  M1 (Traffic Flow)
  Level Crossings
  Level Crossings
  Channel Tunnel
  Channel Tunnel
EMPLOYMENT
  Construction Industry
  Construction Industry
  YTS
  YTS
  Bridging Allowance
  Bridging Allowance
  Labour Statistics
  Labour Statistics
  Employment Training
  Employment Training
  Blandford Fly
  Blandford Fly
  Training Commission
  Training Commission
  Trade Unions (Ballots)
  Trade Unions (Ballots)
Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Manchester): The Chairman of Committees on the Woolsack.

Mathematics Tuition
Baroness Blackstone Baroness Blackstone asked Her Majesty's Government:
Whether they intend to accept the recommendations of the subject working group on the curriculum with respect to mathematics.
Viscount Davidson: My Lords, my right honourable friends the Secretaries of State for Education and Science and for Wales published proposals for attainment targets and programmes of study for mathematics in mid-August. Their proposals were based on the mathematics working group's advice but identified certain aspects which required, in their view, further examination. The proposals are currently the subject of consultation.
Baroness Blackstone: My Lords, I am grateful for that reply. However, is the Minister aware that the Secretary of State recommends that 10 per cent. of time in the school week should be allocated to mathematics whereas the working group recommends a higher proportion? Is the Minister further aware that in Japan as high a proportion as 20 per cent. of the school week goes to mathematics? Does not the Minister agree that it would be retrograde to reduce the amount of time available for this extremely important subject in the new national curriculum?
Viscount Davidson: My Lords, I am aware of that. The proposals of my right honourable friend, based on the working group's advice, are now the subject of wide-ranging consultations conducted in England by the National Curriculum Council. The Government have expressed their views: the consultation exercise has allowed others to express theirs. In its report the NCC is bound to summarise all the views expressed in the consultations alongside its own advice on the proposals.
Baroness Seear: My Lords, are the Government prepared to take notice of the differential performance of girls and boys in mathematics and of the urgent need to bring pressure to bear to improve girls' performance if they are to have any hope of playing a part in the economy in future?
Viscount Davidson: Yes, my Lords.
Lord Annan: My Lords, if the proposals in this document are in any way to be implemented, is it not
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necessary to have a major programme for increasing the number of teachers who can teach mathematics? Does that not also mean that there will have to be a differential scale of payment for such teachers, regardless of what the unions may say?
Viscount Davidson: My Lords, I agree that there are at present shortages of mathematics teachers. But we have an energetic action programme to boost recruitment and to update and reinforce under-qualified existing teachers. Future demands will be less than many people claim. Secondary pupil numbers will continue to fall until 1991 and will remain below present levels until the year 2000.
Lord Peston: My Lords, is the Minister aware how discouraging that last answer was? Is he aware—he surely must be—that so many young people are put off mathematics because of the poor teaching they receive? Does he not agree that the highest priority—this applies to women as well as to men—must be given to providing an ample number of first-class maths teachers? In that case, it seems to me to be inconceivable that we could have too many.
Viscount Davidson: My Lords, I thought that I had given an encouraging reply in my last answer. Perhaps the noble Lord would like to read it again in Hansard tomorrow.
Baroness Blackstone: My Lords, is the Minister also aware that the time available for preparing in-service training courses for existing teachers of mathematics is extraordinarily short? Can he reassure the House that the Secretary of State will do something about providing both increased resources for teacher training in this area and more time for the preparation of courses? Can he also reassure the House that the whole issue of a profile component in the practical application of mathematics will be looked at again by the Secretary of State who is currently rejecting that proposal of the working group?
Viscount Davidson: My Lords, as regards the latter part of the question, that, I am sure, is one of the matters that the National Curriculum Council will be taking very seriously on board. As to whether teachers can cope, in the first instance I should tell the House that only teachers of five and 11 year-old pupils will be affected. Those teachers will have about six months to familiarise themselves with the new attainment targets and programmes of study. Various kinds of support will be provided—new books, equipment and teaching materials through education support grants; in-service training through the LEA training grants scheme; and additional guidance and support through LEA advisory services. But, in any case, teachers will find that many of the new requirements simply reinforce what is already happening in good classrooms.

Ford Engine Plant: Regional Assistance
3.5 p.m.
Lord Bruce-Gardyne Lord Bruce-Gardyne asked Her Majesty's Government:
What requests have been received from the Ford Motor Company for selective financial assistance from public funds towards the cost of its projected new engine plant in South Wales; and what consultations have taken place with the EC Commission.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, the company has been offered regional selective assistance of £26 million towards the costs of its new engine plant developments in South Wales. Consultation with the European Commission was not required.
Lord Bruce-Gardyne: My Lords, I am most grateful to my noble friend for that helpful and informative reply. I am sure your Lordships hope that this compulsory punt on behalf of taxpayers will prove cost-effective. Will my noble friend tell us how this piece of selective assistance compares, both absolutely and also as a proportion of the total investment by Ford, with the selective assistance given to the same company for its original engine plant investment in South Wales 10 years ago?
Lord Trefgarne: My Lords, the assistance to which I have referred today amounts to about 5 per cent. of a project costing something like £550 million altogether. The earlier project to which my noble friend referred cost £270 million altogether, of which the then government provided £73 million, representing about 27 per cent. of the cost of the whole project.
Lord Callaghan of Cardiff: My Lords, is the Minister aware that those figures are totally irrelevant? It is a fact that the guarantees that were then given on behalf of the workforce of South Wales have been more than justified, and it is because Ford's expectations have been exceeded that it has now brought this tremendous new venture, which is of the greatest significance and will provide for the production of 850,000 engines every year, to South Wales. If we can spend money at that rate as a sprat to catch a mackerel, let us have many more sprats.
Lord Trefgarne: My Lords, it is certainly the case that the earlier investment to which I referred, and which the noble Lord will no doubt also recall, presumably tempted Ford to proceed with this further investment. This latter investment has been, I believe, the result of a team effort, both by the official organisations involved, the Welsh Office and the local authority, and the trade unions which have persuaded Ford that their industrial relations record is such as to justify this further investment.
Lord Morris: My Lords, I wish to ask my noble friend about something that has always puzzled me and, I suspect, a lot of people. Why is it that the Ford Motor Company, with its massive resources and its
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massive leverage, needs recourse to taxpayers' funds in order to take investment decisions of this kind? How is it that such huge organisations can lean on government to use public funds in order to assist their development in any part of the country?
Lord Trefgarne: My Lords, the fact is that the Ford Motor Company, like the rest of us, operates in the real world. In the real world, grants or this kind are available not only from places within the United Kingdom but also from other places in Europe and elsewhere. The Ford Motor Company is therefore able to shop around.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that, against a worrying industrial and employment background in Wales, we welcome very warmly indeed this development which will bring 700 jobs to the Bridgend area and I understand 2,300 jobs in factories producing component parts throughout the whole of the United Kingdom? Is he further aware that the subsidy to which he has referred is modest compared with the benefits which will be derived from it? Is the Minister also aware that we are grateful to my noble friend Lord Callaghan for the intervention which he made in 1977 when he was Prime Minister which first brought Ford to the Bridgend area? Therefore as Shadow Welsh Spokesman in this House it gives me great pleasure to thank everyone concerned.
Lord Trefgarne: My Lords, it is certainly the case that this new investment will lead to a number of important employment opportunities in the area concerned. That is very much to be welcomed.
Lord Diamond: My Lords, has the Minister by any chance worked out a cost-benefit analysis of the amount and, if so, can he give the House a rough indication of what it is?
Lord Trefgarne: Yes, my Lords, we have calculated that from the Government point of view the investment represents a cost of just over £10,000 per job created.
Lord Bruce-Gardyne: My Lords, notwithstanding the supplementary questions which my noble friend has answered so effectively, is it not apparent that the sprat in this case was very much smaller to catch a very much larger mackerel? Does that not reflect the lesser gullibility of Her Majesty's present advisers compared with those of 10 years ago, or the better investment climate for inward investment which prevails today, or, as I suspect, a combination of the two?
Lord Trefgarne: My Lords, I think that it is important to point out that the decison that Ford has taken in respect of this latest investment very much reflects its confidence in the likely success of the venture in South Wales. That relates not only to the money which the company will receive from the Government in support of the venture but also, as I said just now, the greatly improved industrial relations atmosphere in that part of the country, which has made an important contribution to the decision-making process.
Lord Callaghan of Cardiff: My Lords, if I may mix the cooking metaphor, does it not also show that in addition to the fact that sprats can catch mackerel, the proof of this pudding has been in the eating and that it is the success of the first venture which has brought the second?
Lord Trefgarne: My Lords, I believe that the noble Lord is right in saying that the success of the earlier venture has contributed to the Ford decision on this occasion. Having said that, there was fierce competition for the Ford plant and I am very pleased that the decision has gone the way of South Wales.
Noble Lords: Hear, hear!
Lord Rugby: My Lords can the Minister tell me whether or not the engines will run efficiently on unleaded fuel?
Lord Trefgarne: My Lords, I think that production of the engines will begin some time in 1994. I am certain that by that time they will be able to run on the unleaded fuel to which the noble Lord refers.

Battersea Bridge
3.14 p.m.
Lord Blyth Lord Blyth asked Her Majesty's Government:
What is the extent of the damage to Battersea Bridge and when they expect the necessary repairs to be completed and the bridge to be fully operational.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, the London Borough of Wandsworth is responsible for Battersea Bridge. The bridge suffered significant structural damage when it was struck by a barge being towed upstream at 14.30 hours on 14th September 1988. I understand that two of the seven cast iron girders in the central span were severely damaged. Some transverse bracings were distorted and one was broken. Repair work is due to begin tomorrow. No firm date can be given for its completion.
Lord Blyth: My Lords, I should like to thank the noble Lord for that comprehensive answer. Will he bear in mind the fact that the present traffic situation on the bridge is causing considerable problems for people using buses who live to the west, on the Morgan's Walk side? Will he use his best endeavours to ensure that the work is carried out as quickly as possible?
Lord Brabazon of Tara: My Lords, I am aware that considerable inconvenience is being caused. I understand that a number of warnings and diversion signs have been erected on both sides of the river to try to alleviate the problem. I cannot give a firm date for the completion of the repairs until further structural tests and the consequent further repair work which may be needed have been completed. It is hoped that the bridge will open early in the New Year.

Air Traffic Control: ECAC
Baroness Burton of Coventry Baroness Burton of Coventry asked Her Majesty's Government:
Whether they will make a statement on air matters discussed at the meeting of the European Community Transport Ministers' Council held on 26th October, with particular reference to the proposal on air traffic control tabled by the Commission.
Lord Brabazon of Tara: My Lords, no air matters were discussed. The Commission did not in the event table proposals; it simply said it would send the Council a report on aviation matters, that has not yet been received. We understand that the report may include a draft directive on personnel licensing and a memorandum on air traffic system capacity problems.
Baroness Burton of Coventry: My Lords, is the Minister aware that that is a most disappointing and unsatisfactory Answer? I hope that he thinks so too. As the air traffic control system in Europe and the United Kingdom has come close to breaking point and as there is growing recognition of the inadequacy of capacity both in the air and on land, does the Minister not think that air transport should have been discussed on 26th October? Does he agree that this is a European problem and that a Europe-wide air traffic control system is now a matter of the most urgent necessity?
Lord Brabazon of Tara: My Lords, I am sorry that my Answer disappointed the noble Baroness. However, what the Commission does is something over which I have no control. The noble Baroness will be aware that a good deal is going on concerning air traffic control in Europe. At the most recent meeting of the ECAC a United Kingdom proposal for a central air traffic flow management system was accepted and I hope that work will go ahead on that. It will be discussed at the EUROCONTROL meeting on 22nd November. There is a good deal of European co-ordination in that area.
I believe that action needs to go beyond the 12 member states of the EC. ECAC has 22 member states and involves countries outside the EC.
Lord Boyd-Carpenter: My Lords, can my noble friend say whether or not his European colleagues, either at the October meeting or any other, have indicated that they are seriously tackling the frequency of industrial disputes among their air traffic controllers which inflicted so much misery on our fellow citizens last summer?
Lord Brabazon of Tara: My Lords, industrial disputes in other countries are not something in which we can become involved. I know that the matter was on the agenda of the ECAC meeting and I hope that those countries which have had problems, particularly Spain and Greece, will do their very best to sort the situation out before next year as it is in their own interests to do so.
Lord Underhill: My Lords, does the Minister appreciate that we have congratulated him on the initiative which he has shown in the development of EUROCONTROL and that we are pleased that his proposals have been accepted? But does he also appreciate the point raised by the noble Lord, Lord Boyd-Carpenter, that the problem created by the shortage of air capacity is exacerbated by industrial disputes, not necessarily in this country; and that we were very disappointed with the reply that he gave to my noble friend Lord Carmichael on 18th October that that was a matter entirely for the countries concerned? Does he recall that my noble friend asked that there should be discussions with the trade unions in the EC to discuss the matter because we do not know whether the problem concerns wages, man-hours or equipment? Is that not therefore a matter which ought to be discussed by the Council of Transport Ministers?
Lord Brabazon of Tara: My Lords, I am afraid that I do not agree. I am grateful for the noble Lord's first remarks, but industrial relations problems can only be sorted out by the employers of the air traffic controllers in the countries concerned, which is the state.
Baroness Burton of Coventry: My Lords, in view of the reply which the Minister gave me on 19th October and in view of his disappointing reply today, can he tell me whether the Transport Ministers are hoping that for their next meeting on 8th and 9th December the Commission will have tabled—as it indicated in advance that it would—its proposals on air traffic control and its amendment to the 1983 Directive on the Inter-regional Air Services Agreement?
Lord Brabazon of Tara: My Lords, I certainly hope that the proposals concerning the Inter-regional Air Services Agreement will be tabled in time for discussion at the December meeting. We should certainly like to see some progress made on that matter. So far as concerns air traffic control measures, obviously if the Commission has proposals to make we should be interested to see them. However, I emphasise that we do not want to divert scarce resources and have too many people becoming involved in this matter. We already have Eurocontrol and ECAC.
Baroness Burton of Coventry: My Lords, surely the Minister is not telling the House that it is a sideline to consider the matter of air traffic control, in view of what happened this summer. Is he not aware that on the 19th he told me that this matter would be discussed on the 26th? I realise that the Minister is not responsible for the fact that the Commission has not tabled that report, but surely he is not now suggesting that their proposals for air traffic control should not be available by 8th December, is he?
Lord Brabazon of Tara: My Lords, on the 19th I said that it was the intention of the Commission to table proposals. The fact that it did not get around to doing so cannot be put down to me. As I said, we have a number of organisations involved in air traffic
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control in Europe, principally Eurocontrol and ECAC. We shall obviously be interested to see what the Commission has to propose, but I think that primarily those two organisations should be in the lead on the matter.

London Docklands Railway (Beckton) Bill
3.20 p.m.
Read a second time, and committed to a Select Committee.

British Railways (No. 2) Bill
Read a second-time, and committed to a Select Committee.

British Railways (Penalty Fares) Bill [H.L.]
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the Promoters of the Bill have leave to suspend any further proceedings thereon, in order to proceed with the Bill, if they shall think fit, in the next Session of Parliament, provided that notice of their intention to do so be lodged in the Office of the Clerk of the Parliaments not later than three o'clock on the day before the close of the present Session, and that all fees due thereon up to that period shall have been paid;
That such Bill shall be deposited in the Office of the Clerk of the Parliaments not later than three o'clock on the third day on which the House shall sit after the commencement of the next Session of Parliament, with a declaration annexed, signed by the Agent, stating that the Bill is the same in every respect as the Bill at the last stage of the proceedings thereon in this House in the present Session;
That the proceedings on such Bill shall, in the next Session of Parliament be pro forma only in regard to every stage through which the same shall have passed in the present Session, and that no new fees be charged to such stages.
That the Standing Orders by which the proceedings on Bills are regulated shall not apply in the next Session of Parliament to such Bill in regard to any of the stages through which the same shall have passed during the present Session.—(The Chairman of Committees.)
On Question, Motion agreed to, and it was ordered that a message be sent to the Commons to acquaint them therewith.

London Regional Transport Bill
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the Promoters of the Bill have leave to suspend any further proceedings thereon, in order

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to proceed with it if they shall think fit, in the next Session of Parliament, provided that notice of their intention to do so be lodged in the Office of the Clerk of the Parliaments not later than three o'clock on the day before the close of the present Session, and that all fees due thereon up to that period shall have been paid;
That, if the Bill is brought from the Commons in the next Session, the Agent for the Bill shall deposit in the Private Bill Office a declaration, signed by him, stating that the Bill is the same, in every respect, as the Bill which was brought from the Commons in the present Session;
That the proceedings on such Bill shall, in the next Session of Parliament be pro forma only in regard to every stage through which the same shall have passed in the present Session, and that no new fees be charged to such stages.
That the Standing Orders by which the proceedings on Bills are regulated shall not apply in the next Session of Parliament to such Bill in regard to any of the stages through which the same shall have passed during the present Session.—(The Chairman of Committees.)
On Question, Motion agreed to, and it was ordered that a message be sent to the Commons to acquaint them therewith.

Housing Bill
3.22 p.m.
Lord Denham: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that Her Majesty and His Royal Highness, having been informed of the purport of the Housing Bill, have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Bill read a third time.
Clause 1 [Assured tenancies]:
The Minister of State, Department of the Environment (The Earl of Caithness)The Minister of State, Department of the Environment (The Earl of Caithness) moved Amendment No. 1:
Page 2, line 23, after ("effect") insert ("subject to subsection (4A) below").
The noble Earl said: In moving Amendment No. 1, with the leave of your Lordships I shall speak at the same time to Amendments Nos. 2, 16, 17 and 34.
We are concerned here with tenancies where the landlord is a fully mutual housing association, usually referred to as a housing co-operative. Schedule 1 to the Bill provides that such tenancies cannot be assured tenancies. We have included this provision on the argument that a statutory regime designed to regulate the relationship between landlord and tenant really has little relevance in a situation where, as is the nature of a co-operative, the interests of landlord and tenants as a whole are in effect indivisible. This remains the Government's
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view. It is a view which, I can assure your Lordships, has the support of the National Federation of Housing Co-operatives.
It has nevertheless emerged that a small number of co-operatives are at present letting on the basis of old-style tenancies under the Housing Act 1980. The Bill provides that such tenancies will ordinarily be assimilated into the new statutory regime. However, the fact that co-operatives will in future be precluded from granting assured tenancies would mean that, as matters stand, tenants who currently have protection under the old style tenancy scheme would have no statutory protection at all once the Bill takes effect.
As I have suggested, the existence of such protection must be seen as being of largely theoretical value, given the essential nature of the co-operative. Nevertheless, the view has been put that it would be wrong, as a matter of principle, to deprive tenants of rights which they now have. The Government accept the force of this argument.
The first three amendments in this group—Amendments Nos. 1, 2 and 16—deal with the problem by providing that an old-style assured tenancy under which the landlord is a fully mutual housing association will become, on commencement of the Bill, a new-style assured tenancy. I emphasise that this is essentially a transitional provision applying only to tenancies which are already in existence when the Bill takes effect. The general exclusion on co-operatives granting assured tenancies will be unaffected.
I hope your Lordships will agree that this represents the most sensible way of resolving matters. The other two amendments in the group are simply drafting amendments which have the effect of transferring the definition of fully mutual housing association that is at present in Schedule 1 to Clause 45, which is the general interpretation clause for Part I of the Bill. I commend the amendments to your Lordships. I beg to move.
Lord McIntosh of Haringey: My Lords, in rising to speak to this amendment I should like first of all to offer my congratulations to the noble Earl on achieving today the mature age of 40. It has not yet turned him grey, despite the fact that this 40th year must have been one of the most strenuous in his life, starting with matters of criminal justice and ending with the varied activities of the Department of the Environment. I promise him that we shall try to make his 41st year as stressful as his 40th year!
Those of your Lordships with sharp eyes will have seen that these amendments appeared in my name on the Marshalled List at Report stage. I did not move them because of a last minute doubt about their wording. I apologise to the House for wasting its time then and now. I am now satisfied that the wording is as it should be and I am happy to offer our support to the amendments moved and spoken to so ably by the noble Earl.
The Earl of Caithness: My Lords, I am grateful to the noble Lord. Yes, my hair has not gone grey; it has just fallen out.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 2:
Page 2, line 26, at end insert—
("(4A) In any case where—

(a) immediately before the commencement of this Act the landlord under a tenancy is a fully mutual housing association, and

(b) at the commencement of this Act the tenancy becomes an assured tenancy by virtue of subsection (3) above,

then, so long as that association remains the landlord under that tenancy (and under any statutory periodic tenancy which arises on the coming to an end of that tenancy), paragraph 12 of Schedule 1 to this Act shall have effect in relation to that tenancy with the omission of sub-paragraph (1)(h).").
On Question, amendment agreed to.
Clause 7 [Orders for possession]:
The Earl of Arran The Earl of Arran moved Amendment No. 3:
Page 6, line 43, at end insert ("but nothing in this Part of this Act relates to proceedings for possession of such a dwelling-house which are brought by a mortgagee, within the meaning of the Law of Property Act 1925, who has lent money on the security of the assured tenancy").
The noble Earl said: My Lords, this is a useful technical amendment and I commend it to your Lordships' House. I beg to move.
On Question, amendment agreed to.
Clause 13 [Increases of rent under assured periodic tenancies]:
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 4:
Page 10, line 13, leave out from second ("tenancy") to end of line 17.
The noble Lord said: My Lords, for the convenience of your Lordships we shall deal also with Amendments Nos. 4, 6 and 8. These three amendments—
The Earl of Caithness: My Lords, if the noble Lord will forgive me, the amendments are Amendments Nos. 5, 6 and 8.
Lord Dean of Beswick: My Lords, with that correction from the Minister I think we may now proceed. This issue was debated at great length at the Report and Committee stages of this Bill. I have to say that I believe the Minister was completely wrong about the effect of the Act, and these amendments are designed to bring into effect what the Minister said the Act would in fact mean.
These are some of the most important amendments in this part of the Bill. They aim to ensure that if a rent assessment committee determines the rent, that should become the maximum rent chargeable. This is a logical, sensible and essential portion to take. If the Government continue to take the view that landlords should be free to persuade tenants to pay a rent which is higher than the one which has been determined or recommended by the rent assessment committee, a great number of tenants who are forced to rely on housing benefit will find themselves in an absurd position. Their housing benefit will be calculated on a rent lower than that which in fact they have to pay.
At Report stage, as recorded in the Official Report, for 24th October at col. 1366, I said:
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"There will be people who will not be reimbursed for the X factor"—
as I termed it—
"which is the difference between what the rent assessment committee says and what the landlord demands. Inevitably … that will have an adverse effect on the figures of homelessness and drive those figures upwards"
With your Lordships' permission I quote also from col. 1367 of the Official Report. The Minister replied:
"My Lords, I should like to comment on one aspect of what the noble Lord has said. I believe that there is a fundamental flaw in his argument with respect".
The Minister referred to my saying that there might be a landlord who under certain circumstances found that the rent determined by the rent assessment committee was not acceptable.
The Minister, still referring to my remarks added:
"He went on to say: 'Then the landlord wants more. How is the tenant going to pay the X factor, the amount of money between what the rent assessment committee determines and what the landlord wants?' There is no X factor because the rent determined by the rent assessment committee will be the statutory maximum recoverable".
I have not argued that. Of course that will be the maximum that can be recovered. That is not the point that I was making.
I was arguing that the provision would leave an X factor which, under the Bill as it stands, the tenant cannot recover. He will have to meet the full cost. I believe that the Minister was wrong in his assessment. If he was given a brief, it was the wrong one. Those are the provisions of the Bill as it stands and as it will operate.
I then repeated the facts of the case. To my distress, the Minister, I believe unintentionally, misled the House before it voted. I do not say that it was deliberate because I know him far too well to think that he would be involved in such a course. However, the Minister got it wrong; I did not. As I have stated the position, that is how the Act will operate. That is how the tenants will understand the position. It will mean that the tenants who undertake these agreements who are just above the lower earning bracket and who will not be able to afford these rents will be driven into penury. I believe that it will have a terrible effect on the homeless people in this country.
The Minister repeated this on the second occasion that we discussed the issue. I do not understand how the two of us can be so far apart on interpretation when one considers the expert advice that I am being given and the advice from civil servants that the Minister is given. I am 100 per cent. convinced that I am right. There will be tenants who will not be reimbursed in some cases for large sums of money because the figure that the landlord will finally determine is the rent that he wants unless the amendments are accepted and the sum that the rent assessment committee recommends becomes the rent.
The Bill does not provide that. It states that the landlord can still pursue a rent in excess of the recommendation of the rent assesssment committee because, as I understand the Bill, it is not i n a position to make an arbitrary decision that such a figure is the rent. It does not have that power.
These amendments seek to give statutory force to what the Minister claims is the position under the

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Bill, and which, in our view, should be the position. We urge the Minister to accept the amendments based on what he stated at Report stage.
I repeat, and stand by, my argument. If the Minister says once again that I am wrong, I have to tell him that in the not too distant future he will have to come to the Dispatch Box—when tenants are having to find these sums of money which will not be reimbursed through housing benefit—to tell the House that he was wrong. I have stated what could happen with the present housing situation. We are approaching Christmas. There are numbers of homeless people who will have no home in which to sit on Christmas day. I hope that the Minister will give great consideration to what I have said. If he wishes the Bill to operate as he stated at Report stage, I hope that he will accept these amendments in the good faith in which they are offered.
3.30 p.m.
The Earl of Caithness: My Lords, as the noble Lord, Lord Dean of Beswick, said, with these amendments we return to issues that were debated at some length at both Committee and Report stages and clearly the divergence of view between each side of your Lordships' House will be no less wide today than on the earlier occasions.
As noble Lords will by now be well aware, we on this side of the House start from the proposition that the rent for an assured tenancy should be first and foremost a matter for free negotiation and agreement between the landlord and the tenant. That, in our view, is a necessary and entirely proper feature of the free market principle which we are seeking to apply to private rented housing.
Thus under the new regime the landlord and tenant will be free to negotiate not only the initial rent for the tenancy but also—if they wish—a contractual procedure for reviewing that rent at subsequent intervals. In cases where they do agree on such a procedure, that procedure will be binding on both parties with no provision for it to be overridden by statute. The primacy of contract is absolutely fundamental to our thinking in this respect. Amendment No. 4—which would allow the statutory procedure to operate regardless of any contractual provision—is thus, I am afraid, wholly inconsistent with our approach.
Amendment No. 5 which is presumably designed to allow unrestricted access to the rent assessment committee is open to objection on the same grounds.
Equally important in our view is the freedom of landlord and tenant to make changes in the rent by agreement without resorting to statutory means. We accept that a statutory procedure for increasing the rent needs to be available but we do not believe that it should get in the way if the landlord and tenant prefer to resolve matters independently. As I said to the House on an earlier occasion, there is plenty of evidence to suggest that the majority of landlords and tenants are perfectly able and willing to sort out their affairs by amicable negotiation and we are determined that the law should not operate in a way
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which makes it harder for them to do so. Amendment No. 5 would have precisely that effect.
Amendment No. 8 would have the effect of making the rent determined by the rent assessment committee for an assured tenancy the statutory maximum rent recoverable from the tenant. This again is incompatible with our view that statutory procedures should not normally contrain the freedom of landlord and tenant to settle their affairs by agreement. Let me make it absolutely clear to the noble Lord, Lord Dean of Beswick, that where the rent assessment committee determines a rent for an assured tenancy that rent will become the rent payable under the contract and it will—I emphasise—not be open to the landlord to require the tenant to pay a higher rent. But we do believe it is right that the landlord and tenant should be free to agree—and I stress the word "agree"—on a different rent from that set by the committee if they prefer to do so. Amendment No. 8 would remove that freedom.
We believe that the statutory rent-fixing procedure we have designed will ensure adequate protection for tenants in those situations where it is needed. But we are quite determined that the law should not at any stage get in the way of people who are perfectly capable of sorting matters out between themselves.
Let me recapitulate and make the position clear once more to the noble Lord. Where the rent assessment committee determines a rent, that will be the rent payable under the tenancy unless the landlord and tenant agree on a different figure. The tenant cannot be compelled to pay more than the rent assessment committee's determined rent. I repeat to the noble Lord: there is no X factor.
Lord Dean of Beswick: My Lords, we now have a clearer picture of what the Minister stated last time. On behalf of my colleagues on this side of the House, I am delighted to know that the recommendation of a rent assessment committee is binding on both parties. We are not disagreeing with the fact that there may be some argument for two parties to negotiate a settlement or agreement for rent.
I do not wish to delay noble Lords any longer because the issue has been well debated. We have argued that with the tremendous housing shortage in the main areas about which we are talking, the strongest negotiator will be the landlord and not the tenant. But we have argued that in the past. We cannot pursue it today and do not wish to do so. But if the Minister is saying that a rent assessment recommendation or a rent set is binding on the landlord, I am quite happy to accept that. I still believe that there will be an × factor because in a tremendous housing shortage there will be desperate tenants. These are the people I am concerned about; people just above the public benefit sector who are perhaps low wage earners, not on such a high income or perhaps on some form of housing benefit already.
They may in desperation agree to a higher rent than might normally be expected. Whether the Minister likes it or not, those people will have an × factor that they will have to swallow. I can only see it resulting in more people joining the homeless

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queue. I believe that the Minister will eventually have to defend an ever-increasing upward spiral of homeless people in this country.
I believe that we have had a good debate on this subject and by leave of the House I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 5 not moved.]
Clause 14 [Determination of rent by rent assessment committee]:
[Amendment No. 6 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 7:
Page 11, line 15, leave out ("5") and insert ("6").
The noble Lord said: My Lords, with this amendment, and Amendments Nos. 36 to 42, which I propose to speak to at the same time, we return to the issue of the landlord's right to possession of a dwelling at a time of redevelopment. The House will recall that when we debated this matter at Report stage we sought to give the courts the right not to give the landlord possession if they considered that was appropriate. We felt that the mandatory possession, which is where Ground 6, the redevelopment ground, occurs in Schedule 2 of the Bill, is unsatisfactory because of the difficulty of keeping landlords to the exercise of a genuine right to possession at a time of redevelopment, as opposed to the risk that they might use the redevelopment clause as an opportunity to gain possession by unfair means.
We are still extremely concerned that landlords could drive a coach and horses through the Bill on this ground and that they might gain access to property using the redevelopment ground quite unjustifiably. The amendment to Clause 14 is merely a consequential amendment because all references to Ground 6 have to be amended if we are to deal with the substantial issues in Schedule 2. The same is true of Amendments Nos. 40, 41 and 42, but Amendments Nos. 36, 37 and 38 deserve a little more attention.
Amendment No. 36 is concerned with the issue of whether the redevelopment condition can be used at a time when the tenant is not aware that development is a possibility when he took on the tenancy. I debated the matter with the Minister on this point on Report and he was good enough to write to me subsequently to say that he thought there was an issue when the assured tenant is the successor to the statutory tenant under the Rent Act where the landlord had bought the building over the head of the statutory tenant. I understood him to agree that this was a risk and that he was tabling an amendment to this effect. If I am right, that is Amendment No. 35, which we are not debating with these amendments. We shall listen to the debate on it with attention later.
As it stands, we do not feel that adequate protection is given. We believe that it ought to be a principle of natural justice—no more and no less than that—that redevelopment clauses cannot be implemented after the tenancy has started and if no notice had been given at the time of the tenancy.
Amendment No. 37 deals with the issue of suitable alternative accommodation. We are proposing that the landlord should be obliged to offer the tenant suitable alternative accommodation which is available or will be available when the order takes effect. As it stands, this part of the Bill is unsatisfactory. The Government have refused to make its use subject to court discretion, as I have just been saying. They have made it mandatory for the courts to give possession. It seems to us only too likely that a minority of unscrupulous landlords—nevertheless probably a significant minority—could offer to make accommodation available which did not turn out to be available when the order took effect. That means in reality that the tenant would be on the streets and the landlord would secure his possession regardless.
Amendment No. 38 refers to the danger of landlords gaining possession by persuading sitting tenants to move to different parts of the building. There are some safeguards in Ground 6 about that, but we do not believe that they are enough to prevent a developer using Ground 6 and persuading a tenant to take a new tenancy in the other accommodation and then claiming that it was granted after he had bought the freehold and after he had given notice of his intention to use the redevelopment clause.
Amendment No. 39 is a consequential amendment and does not need further attention. I describe these amendments even at this late stage as probing amendments. With the amendments we are looking for a recognition by the Government that Ground 6 on its present drafting, and with the condition that it is mandatory for the courts to grant possession under Ground 6, is not adequate for the purpose, does not protect tenants adequately and further protection is required along the lines of Amendments Nos. 36, 37 and 38. I beg to move.
3.45 p.m.
The Earl of Caithness: My Lords, it may seem a slight thing to create a prior notice requirement for Ground 6 when that requirement already exists for Grounds 1 to 5, as the noble Lord, Lord McIntosh of Haringey, has sought to argue. But I contend that Grounds 1 to 5 are much more limited and specific. An owner-occupier letting his property, a property subject to a mortgage or a letting of property which is normally used for holiday or student lets or for use by a minister of religion are all precise cases in which the landlord will know that he is likely to want the property back, probably within a known timescale. It is right that the tenant should specifically be advised of the fact.
I contend that Ground 6 is rather different from these other grounds, for which there is already a prior notice requirement. Ground 6, as the noble Lord, Lord McIntosh of Haringey, said, is the development ground. It is designed to facilitate legitimate development which cannot be undertaken with the sitting tenants in place. We do not want to put so many restrictions on this ground that it cannot be used at all.
A landlord who buys a property may not know what his long-term intentions are. It may be clear that

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there are development possibilities, or it may be an extremely remote prospect. A new tenant who takes on an assured tenancy takes it on against this background. It is one of the grounds for repossession which could be used in certain circumstances. A tenant will make his own assessment of the likelihood of its being used and he can be confident that it cannot be used if there is a possibility of doing the development work around him. If we were to make prior notice a condition of this ground, I believe that it would be served in every case just so that the landlords covered the possibility of redevelopment. Thus it would become meaningless, and I contend to your Lordships that it would also become alarmist.
I do not see Ground 6 as akin to Grounds 1 to 5. It is a carefully drawn ground to facilitate development of a kind that cannot be done with the tenants in occupation. It applies only to post-commencement tenancies. It is a factor which tenants must take into consideration when deciding whether to accept a tenancy, not a specific event which they must inevitably accept will happen.
The noble Lord, Lord McIntosh, rightly drew attention to the fact that the power could be abused by some landlords. I draw attention to the fact that we have considered the matter and made provision for it in the Bill. If a landlord goes to court to obtain possession on those grounds, and does not give the right evidence or pursue through the development project, then under Clause 12 of the Bill compensation will be paid to the tenant for misrepresentation or concealment. Therefore we have taken into account what a bad landlord could do by way of abuse and we have included a safeguard for the tenant.
Amendments Nos. 37 and 39 have been discussed previously. The ground is not intended to be so restrictive as to hinder development. If a landlord had to find suitable alternative accommodation for every tenant whom he was forced to displace, I should contend that the ground would be unusable and that a development would never take place which cannot be in the long-term interest of providing accommodation. If a landlord has suitable alternative accommodation, and if he is a major developer, he could use the ground. We believe that Ground 6 strikes the right balance at the moment. It protects the tenant from being displaced where the proposed development is such that it can be carried out around them but it does not stand in the way of major projects.
As the noble Lord, Lord McIntosh, said, Amendment No. 39 is consequential to Amendment No. 37 to which I have just spoken.
Finally I turn to Amendment No. 38. I fully appreciate the intention behind the amendment to Ground 6. It attempts to deal with a problem of which we are well aware. It is that a company of dubious standing might attempt to evade the provisions of the ground which do not apply in respect of a tenancy already in existence when the landlord acquired his interest by creating a subsidiary company which could then grant a new tenancy to the sitting tenant.
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The problem lies in trying to draft a provision which is sufficiently comprehensive to cover all the options. It is in the nature of shady organisations that if you leave a loophole they will find it. That means in practice, I fear, that if you go for economical and elegant drafting you leave a loophole. If you try to cover all the options you have lengthy, complicated provisions and you completely distort the ground.
This amendment, I am afraid, leaves loopholes. For example, it does not cover partnerships which I am sure that the noble Lord would like to cover. In common with any provision which relates to formal arrangements, such as companies, it does not cover the purely informal arrangements whereby the interest in the tenancy could be transferred as a gift between friends, for instance. Finally, it would also catch quite legitimate transfers of interest between, for example, companies in the same group.
I hope that the noble Lord will accept my assurances that we were alert to the problem but decided that there was no straightforward, manageable way of tackling it comprehensively. Even the noble Lord, using all his abilities, has not been able to produce an amendment which achieves that; it leaves many loopholes.
The noble Lord, Lord McIntosh, was right to draw your Lordships' attention to Amendment No. 35 standing in my name and which I believe will help the Bill. However, for the reasons which I have given I cannot accept Amendment No. 7 tabled by the noble Lord.
Lord McIntosh of Haringey: My Lords, the Minister finds himself in the curious position of agreeing with much of the argument yet rejecting the conclusion. I find it unsatisfactory that, at Third Reading of a Bill which has been around for most of the year, the Minister should be confessing on behalf of the Government an inadequacy in the drafting capacity of his department and of parliamentary draftsmen. If he recognises the issue it is his responsibility to deal with it and not mine. I appreciate his tributes to my ability but I do not have his resources.
He has confirmed more clearly than I had thought possible the justification for our amendments. There are already loopholes in the legislation. They might have been overcome more simply if the Government had accepted our amendment tabled at Report stage. It removed the matter to the discretion of the courts and stopped it being a mandatory ground for repossession. It would have removed all their drafting difficulties by enabling the courts to make a decision about the right solution in any case. The Government rejected that amendment and put themselves in the position of having the Minister face your Lordships confessing that his department and the Government as a whole do not have the capacity to produce the Bill which he wants. That is not good enough at Third Reading.
The position is as he confirmed. There is a small minority of unsatisfactory landlords who will use the redevelopment ground in order to exploit their tenants. That is now common ground between us. It is only because we have the loopholes in the drafting

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of our amendment, and which I acknowledge, that I am obliged to seek your Lordships' leave to withdraw. However, I certainly do not withdraw any of the arguments that have been made. I shall be glad to give way.
The Earl of Caithness: My Lords, I am grateful to the noble Lord. He will appreciate that I cannot agree with his summing-up of the Government's position. As I made clear in my explanation for resisting Amendment No. 38, the more that the noble Lord tries to complicate the issue the more complicated the procedure becomes. We shall end in the situation which the noble Lord's party tried to rectify with the Rent Acts which tried to protect tenants. As noble Lords are aware, they did nothing of the kind. They were a contributory factor to the exploitation of tenants by landlords who wished to exploit them. To go down the route which the noble Lord wanted to go down would only encourage that. I believe that the Government's position is wholly tenable.
Lord McIntosh of Haringey: My Lords, I do not believe that noble Lords will consider that tu quoque is an adequate response to the charges that have been made about the drafting and effects of the Bill. The noble Earl rests his case on the need to secure that redevelopment and rehabilitation take place and are not prevented by law from doing so. We agree with those objectives. We are not trying to secure that all rented properties stay frozen without dramatic improvement in many cases. However, the effect of the legislation is that improvement will take place at the expense of the tenants and to the profit of the landlords. Unless the provision for suitable accommodation in particular is rigorously enforced—and we do not see how it can be under the present drafting—what I suggest will inevitably result. The landlords will benefit, the tenants will not benefit and more redevelopment will not necessarily take place. Redevelopment is intended to provide better homes, not simply profits for landlords. I am most dissatisfied with the responses of the noble Earl. If this were an earlier stage I should certainly wish to return to this most important issue. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 8 not moved.]
Clause 27 [Damages for unlawful eviction]:
The Earl of Arran The Earl of Arran moved Amendment No. 9:
Page 20, line 40, leave out ("by") and insert ("to").
The noble Earl said: My Lords, I should like to speak also to Amendment No. 53. Both amendments make a small but useful drafting amendment to this Bill and to the Scottish Bill. They provide that where the court decides that there is a case for mitigating damages under Clause 27(7) it may reduce those damages to, rather than by, an appropriate amount. Effectively, the wording makes the job of the court in calculating the damages rather simpler and there may he county court judges who are grateful for the revised wording, which potential obviates the need for some sums to be done. I beg to move.
On Question, amendment agreed to
Clause 31 [Excluded tenancies and licences]:
4 p.m.
The Earl of Arran The Earl of Arran moved Amendment No. 10:
Page 24, line 40, after ("if") insert ("(a)").
The noble Earl said: My Lords, in moving Amendment No. 10 I shall speak also to Amendment No. 11 These amendments arise as a consequence of a commitment I gave to the noble Lord, Lord Meston, on Report. We undertook tc bring forward an amendment to provide that where a landlord or licensor enables a tenant or licensee to live rent free, then that tenancy or licence will be excluded under the terms of Clause 31 and it will not be necessary to obtain a court order to evict him. As the noble Lord said, there is a world of difference between a licensee or tenant who occupies premises and pays something to cover costs and the non-paying guest who lives completely rent free. I think there are very few people in this category, but I do not think it should be necessary to get a court order to evict them. I beg to move.
On Question, Amendment agreed to.
The Earl of Arran The Earl of Arran moved Amendment No. 11:
Page 24, line 42, at end insert ("or
(b) it is granted otherwise than for money or money's worth").
On Question, amendment agreed to.
Clause 34 [New protected tenancies and agricultural occupancies restricted to special cases]:
The Earl of Arran The Earl of Arran moved Amendment No. 12:
Page 27, line 22, leave out ("has ended") and insert ("ended before the commencement of this Act").
The noble Earl said: My Lords, in moving Amendment No. 12 I shall also speak to Amendments Nos. 13 and 14. These amendments clarify the position as regards existing shorthold tenants who are granted new tenancies by their landlords. It was our intention that an old-style shorthold tenant who stayed on in the property after the expiry of his old-style shorthold lease should come automatically into the new system as a shorthold tenant. If the landlord granted a new tenancy by granting a new-style shorthold, the position would of course be clear. However, a landlord could inadvertently create a new tenancy by varying the terms of the old tenancy or, say, increasing the rent. In such circumstances, he might imagine that his tenant was still a shorthold tenant, but without this amendment the position would not be straightforward. Amendments Nos. 12 and 13 make it quite clear that an old-style shorthold tenant who stays on after the expiry of his lease becomes a new-style shorthold tenant without the landlord needing to serve notice to that effect. It avoids a trap for landlords. Amendment No. 14 caters for the position where there are joint tenants one of whom was not party to the original tenancy agreement. In this case, when the tenancy agreement is subsequently varied the new tenancy will not automatically be a new-style assured shorthold. I beg to move.
On Question, amendment agreed to.
The Earl of Arran The Earl of Arran moved Amendments Nos. 13 and 14:
Page 27, line 23, after ("which") insert ("at that commencement").
Page 27, line 35, at end insert ("and
(c) the landlord and the tenant under the tenancy are the same as at the coming to an end of the protected or statutory tenancy which, apart from subsection (2) above, would fall within subsection (1)(b) above".
On Question, amendments agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 15:
Page 28, line 5, at end insert—
("( ) In Part IV of Schedule 15 of the Rent Act 1977 there shall be added after paragraph 4(2):—
"(3) For the purposes of sub-paragraph (1)(b) a tenancy which is an assured tenancy within the meaning of Part I of the Housing Act 1988 shall not be treated as affording the required security by reason only of the fact that the tenancy is an assured tenancy within the meaning of the Housing Act 1988." ").
The noble Lord said: My Lords, Amendment No. 15 was moved in Committee. When we moved it we received recognition from the Minister that there was something in the case that we were putting. He said:
"There is no doubt that the noble Lord has hit on a good point here. We accept the principle behind the amendment. If he will withdraw it at this stage we will deal with the point at a later stage".—[Official Report, 25/7/88; col. 123.].
On Report the noble Earl, Lord Arran, moved Amendments Nos. 96 and 100, which purported to deal with the points which we were making; namely, that assured tenants should have the right to suitable alternative accommodation and that right should be extended to those who have assured tenancies within the meaning of this Act as well as within the meaning of previous Acts. On Report (at col. 1456) I said that although I was grateful to the noble Earl for clarifying the amendments, they did not really meet our point. The point I made then, which we again have to make by re-introducing our Committee amendment, is that there is no guarantee that the Bill as amended does not leave the way open for a court to decide that an assured tenancy offered as alternative accommodation is the equivalent of a protected tenancy and therefore is suitable just because it is an assured tenancy.
The suitability of alternative accommodation not only relies on the physical quality of the accommodation. It also requires adequate security of tenure; otherwise it is not a suitable alternative. In fact the tenant is going downhill and losing his rights rather than retaining them, which is what we thought the Government recognised was necessary. Therefore, there are occasions when the matter will be all right. There will be occasions when the quality of the tenancy as well as the quality of the accommodation will be good enough. There are other occasions when it will not be and everything will depend on the quality of the contractual terms on offer.
With this amendment we have taken the wording from the Government's own Housing and Planning Act, which states:
"The assured tenancy shall not be treated as affording the required security by reason only of the fact that it is an assured tenancy".
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We want to make that clear to the county court. We believe that our amendment does that. We believe that it is in accordance with the Government's intentions as expressed to us in Committee. We hope that they will feel that we have properly returned to this matter, because consideration on Report was not adequate and they would be best honouring their commitment by accepting the amendment which I now move. I beg to move.
The Earl of Caithness: My Lords, as the noble Lord said, Amendment No. 15 is based on the premise that amendments made to Clause 34 have not gone far enough to meet the commitment given in Committee to clarify the point that in certain circumstances an assured tenancy offered as alternative accommodation might not be sufficient security to a tenant if he or she is a former Rent Act tenant.
With respect to the noble Lord, I can assure him that they do. It has never been the case that where a court ordered possession from a protected tenant under Section 98 of the Rent Act on the grounds that suitable alternative accommodation was available, that accommodation had to be let on a protected tenancy. Provided that the contractual terms of the new tenancy gave the tenant reasonably equivalent rights, the court could order possession if the new tenancy was not protected. In the Housing and Planning Act 1986 we provided that a tenancy should not be regarded as suitable under Section 98 merely by reason of being an old-style assured tenancy, but it might well be suitable given the right contractual terms. Although the provision in this Bill is not identical to the provision in that Act, we believe the amendments we have moved have the same effect.
Perhaps I can just expand on that, because the noble Lord was concerned that the wording of this Bill does not replicate the wording of the Housing and Planning Act. The context of the references in the two pieces of legislation is not the same. The wording of the 1986 Act was part of a consequential amendment to Schedule 15 of the Rent Act made by that Act. The wording of this Bill is part of a description: the types of tenancies which can be protected tenancies after commencement. In both cases, although the wording is different, the effect is that the court is not to assume automatically that an assured tenancy affords the required protection. Legal advice is that the shorter wording of the amendment we moved on Report achieves the required effect. I hope the noble Lord will accept my assurance on that.
Lord McIntosh of Haringey: My Lords, clearly I shall have to read carefully what the noble Earl said. It was worth reviving this matter in this way because that was not said so clearly on Report. That may have been my fault for not drawing it out adequately, because it is always a matter of mutual responsibility between the two Front Benches. However, on the face of it the assurances given by the noble Earl are adequate for my purpose and I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 37 [No further assured tenancies under Housing Act 1980]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 16:
Page 30, line 47, at end isert ("and, if the landlord granting the tenancy is a fully mutual housing association, then, so long as that association remains the landlord under that tenancy (and under any statutory periodic tenancy which arises on the coming to an end of that tenancy), the said paragraph 12 shall have effect in relation to that tenancy with the omission of sub-paragraph (I)(h)").
On Question, amendment agreed to.
Clause 45 [Interpretation of Part I]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 17:
Page 35, line 41, at end insert—
(" "fully mutual housing association" has the same meaning as in Part I of the Housing Associations Act 1985").
On Question, amendment agreed to.
Clause 74 [Transfer of land and other property to housing action trusts]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 18:
Page 58, line 26, at end insert—
("(4A) Without prejudice to the generality of subsection (4) above, the Secretary of State may issue guidance to local housing authorities as to:—

(a) the likely basis for the financial terms on which property will be transferred under this section, including the date or dates on which any sum payable to or by the local authority will be paid; and

(b) the procedure to be adopted for the adjustment by him of amounts prescribed under Part VIII (Capital Expenditure of Local Authorities etc.) of the Local Government, Planning and Land Act 1980 for local authorities to which property is transferred under section 84 below.").

The noble Lord said: My Lords, this amendment has been tabled because the situation has substantially changed since Report stage, when we queried whether the Government had actually provided sufficient finance for the acquisition of the housing action trust properties.
The House will recall that in a Statement in July, when the HAT programme was announced, a budget of £125 million was proposed for the housing action trust programme. The assumption was that the money was for the rehabilitation work and no specific reference was made to the cost of acquiring the properties. We queried that at the time because we felt that if the Government were serious about paying a proper sum to local authorities for the estates taken over by the housing action trusts, the public expenditure programme should provide the capital finance for that.
We also queried this matter on Report because we were not given adequate assurances that the money paid to local authorities for the properties in the housing action trust areas would be paid over, as is normal commercial practice, when the properties changed hands. We queried that in Committee, saying that 100 per cent. of the money should be paid over as the properties change hands. The Government did not like that so we came back and said that if they wanted to make staggered payments
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by agreement that would be acceptable; but again the Government refused to accept that.
That left us with the only possible implication that the Government are not prepared to make adequate financial provision in public expenditure for the housing action trust programme and that they were proposing to force local authorities to receive the money staggered over a period of time, which could be years. That is certainly not in accordance with normal commercial practice and in some circles might be considered to be sharp practice, particularly since the Government were studiously silent about the implications of what they were saying.
Since Report stage we have had the Chancellor's Autumn Statement. We now know the position for public expenditure, not only for this financial year but for the years 1989–90 and 1990–91. Significantly, there appears to be no reference to the resources for the acquisition of the proposed housing action trusts areas. Therefore, I ask the Minister: where will this money come from? If it is not in the Autumn Statement, where are we to find it? On Report the Minister said that it was not provided for in public expenditure but that it would be. I have given the Minister notice of this question so there is no reason why we should not have a clear and unequivocal answer.
Is the Minister able to confirm that none of the £50 million earmarked for next year will be allocated for acquisition? Is it the Government's intention to provide for enforced staggered payments to local authorities rather than pay money on the nail, as it should be paid? What is meant by taking account of other resources and by giving 100 per cent. approval for buy-back proposals under Clause 84?
Those questions are central to government financial responsibility. There must be good and clear answers to them if we are to appreciate what the Government actually mean by the housing action trust programme. As matters stand we have no such security. We have no such clear understanding and we have no confidence that the Government are prepared to put their money where their mouth is in regard to housing action trust areas. I beg to move.
4.15 p.m.
The Earl of Caithness: My Lords, in this amendment the noble Lord has returned to two issues which we have already discussed in Committee and during Report stage; namely, the financial arrangements for transferring property to HATs and for repurchases by the local authorities from HATs. The noble Lord's amendment invites the Secretary of State to issue guidance to local housing authorities on these matters.
The noble Lord did not specifically mention repurchases from local authorities this afternoon, though he did so at earlier stages, but it may be helpful if I expand on what I say to include that aspect. There is very little I can add to what I have said in earlier discussion on these matters. So far as concerns the transfer stock from local authorities to HATs, Clause 75 places a clear duty on the Secretary of State to consult the local authorities on the properties to be transferred and on the terms of the

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proposed transfer. The local authorities concerned will therefore have a full opportunity to express their views on the financial terms, including the date or dates on which any sum payable to or by the local authority should be paid.
I do not believe that it would be right to circumscribe these consultations in advance. Indeed, it is impossible to talk about the timing of payments in the absence of detailed information on the valuation of properties. Our consultations with the local authorities concerned must take account of individual circumstances of transfer.
I should add a further point. We announced in another place that we would be undertaking a review of the housing subsidy system as it applied to large-scale disposals of stock, including transfers to HATs. We are close to completing that review and we shall shortly be publishing a consultation document about the subsidy arrangements for dealing with outstanding loan debt left with local authorities when tranfers take place to a HAT. I hope that reassures the noble Lord.
The noble Lord expressed concern about whether the Government have proper provision for transfer payments. As an astute reader of the public expenditure White Paper for 1988, the noble Lord will have noted that the provision is exclusive of transfer costs, as he surmised when he moved the amendment. So also is the revised provision announced on 1st November by my right honourable friend the Secretary of State. This approach is necessary because we do not at this stage know which HATs will be established, let alone have detailed information about the valuation of properties to be transferred.
I can, however, give the noble Lord a categorical assurance that when these figures are known an adjustment will be made to the HATs' external finance limit to enable them to meet whatever is the purchase price. The receipts of local authorities will of course rise by the same amount, which is why an in-year change of this kind is possible.
As regards the second part of the noble Lord's amendment, I find it difficult to understand why it formed part of the amendment. I gave the necessary assurance in my press notice on 7th October and my honourable friend the Parliamentary Under-Secretary of State wrote to the leaders of the local authorities concerned at the same time. I repeated that assurance during the Report stage only last week.
Let me reiterate the position to make it absolutely clear. The Government have said that authorities which wish to repurchase HAT property when a Housing Action Trust has completed its improvement work will be given the necessary approvals to enable them to raise sufficient funds for acquisition. Under the present system, there would be an in-year addition to the council's housing investment programme allocation. Under the proposed new financial system, set out in our consultation paper Capital Expenditure and Finance, a supplementary credit approval would be issued. Unless the local authority is clearly in a position to
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raise part of the costs from within its existing credit limit or from its own resources—that is, from its past or estimated future receipts—the credit approval will cover 100 per cent. of the repurchase price. That was the part of the amendment that the noble Lord did not speak to, but I believed that it was worth reiterating what I said in order to put it on the record.
The price at which local authorities will repurchase HAT stock will be based on tenanted market value. This valuation basis will enable the purchaser, over time, to meet the loan charges from net rental income without having to increase rents above what can be afforded by those in lower paid employment.
Lord McIntosh of Haringey: My Lords, will the Minister permit me to intervene? I am following with great attention and interest what he is saying and I like what he has said about the 100 per cent. Can he tell me why there is a reference in Clause 84 to taking account of other resources before giving 100 per cent. approval?
The Earl of Caithness: My Lords, I had hoped that I had made that clear. It is because the local authority may be in a position to raise some or a great part of the cost from within its existing credit limit or from its own resources. That is the reason.
Lord McIntosh of Haringey: My Lords, with the leave of the House, can the local authority be forced to do that if the department decides that it is able to do so, or can the local authority decide whether it is able and willing to do so? I can quite understand the latter case, but it is the former that worries me.
The Earl of Caithness: My Lords, I fully appreciate that the noble Lord would prefer to have full credit approval of 100 per cent. in each and every case. However, I am sure that he will agree that if the local authority can afford it from its own resources which it and the department know that it has, surely it is right to ask the local authority to use some of its own resources.
Perhaps I may continue on the point of repurchasing. In principle there is therefore no need for any revenue subsidy. That was a point raised earlier in our debate on this question. However a local authority borrowing on conventional terms may find that loan charges necessarily exceed net rental income in the early years with a corresponding surplus in later years. Any such surpluses and deficits will be taken into account in calculating annual subsidy entitlement under the new HRA arrangements being introduced in 1990. We are in discussion with the local authority associations about these arrangements.
Your Lordships will be aware from what I have said that there has been some confusion about the financing of HATs and about the possible repurchase of HAT stock by a willing local authority. I felt it right to get that matter clearly on the record for your Lordships. I cannot agree that there is no confidence in the Government providing the money for HATs. If your Lordships look at the Autumn Statement made by my right honourable friend the Chancellor of the Exchequer, it will be seen that the budget for HATs has gone up.
Lord McIntosh of Haringey: My Lords, the only thing I can say about that reply is that it is good in parts. I return briefly to the issue which obliged me to intervene during the Minister's statement. He replied to me again by saying that if the local authority can afford it and the department also knows it can afford it, then there may be a contribution from the capital resources of the local authority rather than a contribution of 100 per cent. from the department.
That leaves open the fundamental question of who says that the local authority can afford it. If the Minister means by saying that the authority knows and the department knows that it requires both that the authority knows, recognises and agrees and that the department knows, recognises and agrees, I suppose that is an adequate answer. However, that is not quite what the Minister said. It still leaves open the possibility that the department may make a judgment about the authority's capital resources which leads the department to offer less than 100 per cent. The local authority may disagree and believe that there are other things upon which it should be spending its money rather than the repurchase of estates from the housing action trusts. I suspect the words were not taken directly from his brief, but I believe that if the Minister reads his words carefully he willing recognise that at the very least there is an ambiguity which I am sure he will wish to avoid.
The Minister has still not answered some of the other questions I asked and of which he was given notice. The most important question of all that he has not answered is whether it is the Government's intention to force local authorities toaccept staggered payments for the estates. I am speaking about the original transfer. Alternatively, is it the Government's intention to pay the cash on the nail unless they agree with the local authority that there should be staggered payments?
I did not sense an adequate answer to that point in what the Minister said. I am still not satisfied that the provision for the receipts that come in as an in-year addition to the housing investment programme and the provision as regards supplementary credits are adequate for the purpose.
These are complex matters, as many noble Lords will recognise. I believed that we had asked simple questions. We obtained one or two clear and straight answers regarding supplementary estimates. There are other matters which are still unclear and which will cause considerable concern to local authorities. I have no doubt that they will return to the Minister and the Secretary of State for further clarification of what was said on 1st November and what is being said today.
I do not believe it is appropriate for us to pursue this matter in the context of the Third Reading of the Bill, but I do not believe that the questions I raised have been adequately resolved by the answers given by the Government. But it is better that I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 81 [Consent required for certain subsequent disposals]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 19:
Page 64, line 2, at end insert—
("(4A) Before giving consent in respect of a disposal to which subsection (3) above applies, the Secretary of State—

(a)shall satisfy himself that the person who is seeking the consent has taken appropriate steps to consult every tenant of any house proposed to be disposed of; and

(b)shall have regard to the responses of any such tenants to that consultation.")

The noble Earl said: My Lords, I shall also speak to Amendments Nos. 28 and 32. They have a common purpose and origin in a commitment I made during our consideration on Report of Part IV. Your Lordships will recall that during discussion of what is now Clause 105, we considered the question of how tenants might be brought into the process of controlling subsequent disposals of former public sector housing acquired under tenants' choice.
During that discussion I said that my right honourable friend would be likely to require information from any person seeking his consent to a disposal about the nature and results of any consultation of the tenants of the housing proposed for disposal. But I went on to say that I would consider whether there should be a statutory right on the face of this Bill for such tenants to be consulted. I have considered the matter, including the arguments put to me by the noble Lord, Lord Graham of Edmonton. I concluded that it would be appropriate to secure a right for tenants to be consulted by including it in Part IV of the Bill. Moreover, I also decided that it should apply in addition to tenants of housing disposed of by a HAT under Part III of the Bill or by a local council under its existing powers in the Housing Act 1985.
Hence, I have brought for your Lordships' consideration the three amendments in this group. True to their common origin and purpose, they take on a common form. They place the duties on my right honourable friend rather than on the applicant for his consent. That reflects the reality that the sanction against failure to carry out the consultation is in the hands of my right honourable friend who would withhold his consent to the disposal, which could not then take place. Amendment No. 19 requires my right honourable friend to satisfy himself that any person seeking his consent to a disposal has consulted the tenants in the property proposed for disposal. It also requires him to have regard to the responses of the tenants concerned.
I would make only a few comments on these provisions. It is, as I have said, for the landlord to take the appropriate steps to consult his tenants. The steps will vary in particular circumstances and we would not want to be prescriptive about what they should be. But my right honourable friend will certainly want a coherent and convincing account of what those steps were before he could possibly satisfy himself, as the amendments require. He will also have to have an account of the tenants' views collected in that process before he could, as required, have regard to them before making his decision. I suggest that the amendments make a flexible but tight, effective and

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worthwhile safeguard for tenants in property acquired under the various disposal regimes established in, or regulated by, Parts III, IV and V of the Bill. I beg to move.
4.30 p.m.
Lord McIntosh of Haringey: My Lords, we generally welcome Amendment No. 19. It leaves the discretion of the Secretary of State all powerful in any dispute between a tenant and an undesirable landlord. We have not yet provided a veto under Section 106A of the Housing Act 1985 but this goes some way towards meeting what we are looking for. Amendment No. 28 is a concession to an amendment which we moved at Report stage. As the noble Earl reminded the House, he gave an undertaking to my noble friend Lord Graham to see whether he could clarify the matter on the face of the Bill.
I am bound to ask some questions. First, why does the provision fall short of the provision in Schedule 3A of the Housing Act 1985 which governs the consultation requirements when a local authority wants to dispose to a private landlord? What are the "appropriate steps" referred to in the amendment? The requirements for consultation in the 1985 Act are what the local authority should follow. Surely they should be on the face of the Bill. Surely, they should be on the face of the Bill in Part IV for the Part IV landlords. The 1985 Act provides that the Secretary of State shall not give his consent if it appears to him that a majority of tenants do not wish the disposal to proceed. Surely this should apply also to disposals by housing action trusts and Part IV landlords; it should be on the face of the Bill. This is the only veto that tenants will ever have: it is important that it should apply throughout our housing legislation. If the noble Earl can give answers to those questions, we shall not oppose the amendments.
The Earl of Caithness: My Lords, I had a nasty feeling that however generous I was to the noble Lord, Lord McIntosh of Haringey, I would never satisfy him fully. However, I feel that I fulfilled the commitment I made to the noble Lord, Lord Graham. I said that I wanted to look at the matter. On consideration I felt that it was appropriate to put this provision on the face of the Bill.
Through the mechanisms in the amendments before your Lordships my right honourable friend must satisfy himself that the tenants have been properly consulted and have regard to the reactions of the tenants. The noble Lord used the word "veto". That is not a word the Government have used, but we shall be discussing that point at some length later on. I am delighted to see the noble Lord, Lord Graham of Edmonton, back in his place. I know that he will be delighted by the amendments which satisfy the point that he made at an earlier stage.
Lord Graham of Edmonton: My Lords, will the noble Earl note that I am delighted with his delight?
The Earl of Caithness: In which case, my Lords, we are all delighted.
The noble Lord, Lord McIntosh, asked me why the provisions fall short of the detailed requirements in the 1985 Act. Those are appropriate to disposals by a public authority. They are not appropriate to the market-type constraints which will apply to independent approved landlords. We have gone as far as we can to meet the concerns of noble Lords. I believe that the Bill will be better for the inclusion of the amendments.
On Question, amendment agreed to
Clause 84 [Provisions applicable to disposals of dwelling-houses subject to secure tenancies]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 20:
Page 67, line 29, at end insert—
(" IA) The Secretary of State shall lay down regulations which—

(a) shall enable secure tenants of housing action trusts to indicate that they do not wish their houses to be disposed of by the housing action trust to a person as described in subsection (1) above; and

(b) shall direct the housing action trust not to proceed with the disposal of the houses of such tenants who have given such indications.").

The noble Lord said: My Lords, with this amendment we return to an issue which caused a certain amount of contention at Report stage. I refer to the issue of the assurances given to tenants in housing action trust areas about the disposal of their properties when the housing action trusts have completed their work. At Report stage I reminded the House that early in October the Parliamentary Under-Secretary of State, Mr. David Trippier, had written to all the occupiers in the housing trust areas. The letter was appended to a press release issued by the Minister on 7th October. I questioned whether the Bill provided the assurances which the Minister and Mr. Trippier were offering to tenants. In particular, I was referring to Mr. Trippier's letter. I shall quote again from the letter to see whether we can be adequately assured that the point has been dealt with.
Mr. Trippier wrote about choice of landlords. He said:
"Second, tenants are also worried about how much choice they will have about who their landlord will be after the Trust has carried out improvements. You need have no fear".
"You" is the "Dear Occupier" in the housing action trust area. The letter continued:
"You will be given a choice by the Trust about who you would like to see managing your home. And you will be able to make your own suggestions".
To me, that means two things. First, it means that the tenants will be consulted; in other words, they will be able to make their own suggestions. And, secondly, it means that the process will go beyond consultation to saying that they have a choice—in other words, they will be the ones to make a decision. At col. 1590 of the Official Report of 25th October, the Minister said:
"I am very happy to stick by the news release … I can tell the noble Lord … that that release has received some very favourable comments from tenants".
However, that is not what he said at an earlier stage of the debate. At col. 1586 he said that tenants will

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have a wider range of disposal options. There is nothing wrong with that, but it is not the same as giving them the choice. "A wider range" does not necessarily mean a range including the choice that tenants themselves want to make. The Minister also said at col. 1586 that housing action trusts,
"will have to take into account the wishes of any tenant who wants to return to a willing local authority, propose an alternative landlord or stay with the HAT".
That, again, is consultation; but it is not giving the tenants the choice. Finally, he said that the housing action trusts,
"will give remaining tenants a final choice between as many as possible of approved landlords, including housing associations and tenants' co-operatives, or the local authority if it is willing".
Saying "as many as possible" is not saying unequivocally, as Mr. Trippier said in his letter, "You will be given a choice by the Trust". What the Government are saying is that they will try to give a choice but that they will not necessarily achieve it.
Those things are different. No assurance appears either in the Bill or was given in the statements of Ministers at Report stage that tenants will have a choice as proposed by Mr. Trippier. We table these amendments in order to give effect to the undertakings of the Minister in his press release and by Mr. Trippier in his letter to tenants. I say that they are in honour bound to adhere to the undertakings given both generally in a press release and specifically in a letter to each tenant. Tenants must have a choice. That is what they were told.The Bill does not say it. If the House accepts the amendment, the Bill can say it. The House has an opportunity to remind the Government of their obligations. I beg to move.
Lord Pitt of Hampstead: My Lords, I wonder whether I may use this opportunity to raise a matter with the Minister that I mentioned on Report and for which I hope he has an answer. He may remember that I raised the question of the worry of the charitable housing associations that they have been informed—I think perhaps "advised" is the word I should use—that they may be ultra vires of the provisions of their charitable trusts if they grant succession rights over and above those provided by statute.
When I raised the matter previously, the Minister said that he would look into it. I am using the amendment as a connection, although it is a somewhat tenuous one, because the amendment refers to disposal of houses that are assured tenancies. If someone is having his assured tenancy transferred, that person would like to know whether the new landlord provides succession rights. So I think that there is a tenuous connection here.
However, I am really using the opportunity to ask the Minister whether he has in fact looked into the matter, and if he has done so, what his legal advice has been in this regard. The housing associations which have been in contact with me are still quite worried about the whole situation. They inform me that the Government are encouraging them to go ahead as is; but they are being told by the charity commissioners that they may in fact be ultra vires if they do so. I should like to know what the position is.
The Earl of Caithness: My Lords, perhaps I may answer the noble Lord's question, even if the connection between charitable housing and HATs is rather tenuous. They may be the same thing from the tenant's point of view, but I accept the tenuous connection that the noble Lord, Lord Pitt, has made. Unfortunately, I cannot tell him anything definite, but I can tell him that I have looked into the matter. We are taking the best advice that we can, and so far that advice seems to give me grounds for hope that the situation will result in a satisfactory outcome.
Obviously the noble Lord realises that I cannot go further than that at present. However, I am progressing with all due speed because it is a matter which needs to be resolved. I hope that it will end up as satisfactorily as we would all wish.
I return now to the amendment under discussion. As the noble Lord, Lord McIntosh, indicated, this is again well trodden ground. However, it might be helpful if I reiterate some of the main points about the process we envisage HATs going through when they transfer tenanted properties.
Within the constraints of HATs being short-life bodies to be wound up once their objects are achieved, tenants will have access to a wide range of disposal options. All HAT tenants will retain their right to buy even after transfer to new andlords. Any HAT tenant will be able to find himself the landlord he wants, either through tenants' choice provisions or by proposing an approved landlord to the HAT. HATs will foster tenant co-operatives and facilitate transfer to them. HATs will have to consult every secure tenant before transferring ownership of their homes to another landlord. And they will have to take into account the wishes of any tenant who wants to return to a willing local authority, propose an alternative landlord or stay with the HAT. When it appears to the HAT that its objects have been satisfactorily achieved, it will give remaining tenants a final choice between as many as possible of approved landlords, including housing associations and tenants' co-operatives, or the local authority if it is willing.
Clause 83 gives a right to detailed consultation: a right to receive the information they need to make informed choices; and a right to seek a return to a willing local authority or another landlord or to say that they want to stay with the HAT if they do not like a landlord offered by the HAT prior to its meeting its statutory requirements under Clause 87.
We are committed to seeing that those rights are honoured. We shall make that clear in the Secretary of State's management guidance which will be published. In addition my right honourable friend the Secretary of State has reserve powers of direction to make it stick; and of course disposals will only be allowed if the Secretary of State consents after he has received details of the representations made by tenants about the HATs proposals and a statement of the consideration given to those representations.
I should also point out that subsection 7 of Clause 83 gives the Secretary of State a specific power of direction to require a HAT to carry out further consultation with tenants about any proposed disposal. He might choose to exercise this power if he

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felt that a housing action trust's consideration of the representations it had received from tenants was inadequate.
Moreover, where tenants clearly indicated their dissatisfaction with a proposal the Secretary of State would, if he felt the situation warranted it, withhold his consent. So, as noble Lords will recognise, we have already built into Clause 87, an extra safeguard for tenants to ensure that their views are given proper weight by the HAT.
I was pleased that the noble Lord, Lord McIntosh of Haringey, used much more of the wording contained in the letter of my honourable friend the Parliamentary Under-Secretary when he mentioned the word "choice". On Report, the noble Lord talked much more about the "tenant veto" which, as I said in respect of the last amendment, were his words rather than the Government's words. What we said in our press statement and in the letter which my honourable friend the Paliamentary Under-Secretary sent to each occupier in one of the possible HAT areas that we are considering at the moment is entirely consistent. It gives the tenants a great deal more choice than they believed that they had at the time.
4.45 p.m.
Lord Ross of Newport: My Lords, I hope that I am in order if I speak now before the Minister sits down. Surely it would be the wish of the Government to wind up a HAT after it had done its job. Then, if the local authority has disposed of all its properties, surely the tenant has only the choice of whoever is taking over those properties from the HAT. It does not mean that the tenant can really stay with the HAT if it has been wound up.
The Earl of Caithness: No, my Lords. The point that the noble Lord, Lord Ross of Newport, missed, with respect, was that the tenant could stay with the HAT until it has fulfilled its obligations. That was the point I was making. The HAT may be disposing of part of its estate and, if the tenant wants to stay with the HAT for the time being, the provision will allow him to do so.
The noble Lord is absolutely right to say that these are short-life bodies. We do not intend them to be landowners for any great length of time. They will have a very definite task to go into an area, improve it and close themselves down. It is at that stage that we also want as many choices for the tenant as possible.
Lord McIntosh of Haringey: My Lords, I have to say that that was a disgraceful answer. I am not imputing anything personally against the Minister, but that reply is a denial of what in plain English was said to tenants by the Parliamentary Under-Secretary of State.
The Minister gave us a lot of talk about the management guidance which will be issued. He talked about the Minister's reserve powers; he talked about consideration given to representations by tenants; and he talked about the power of the
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Secretary of State to withhold consent. He talked as if somehow the sentence:
"You will be given a choice by the Trust about who you would like to see managing your home."
means something different from what in plain English it is clear that it does mean. It means that tenants are to be given a choice and if they do not like what is offered to them in terms of a landlord, then they can choose not to take what is offered. What else can it mean?
Is the Minister seriously suggesting that what Mr. Trippier meant was, "You will be given a choice about who you would like to see, but that choice won't necessarily be implemented". Is that what he is saying? If that is so, the people who have received that letter will feel that they have been conned. There is no other word for it. If I am told that I shall be given a choice, I expect that to mean that my choice will have effect; not that it will simply be taken into consideration, that the reserve powers will be used and that I will be assured that I am being consulted. It is an abuse of the English language. What the Minister is saying is in contradiction to what tenants were told.
I warn the Minister that it will fare very badly against him in the housing action trust areas when it is realised that the tenants will not have the opportunity to decide which landlord they are to go to when the HAT is wound up.
The Earl of Caithness: My Lords, with the leave of the House, the noble Lord totally misrepresents me again. I am amazed that the noble Lord could use such language. He has taken the twisting of words to a ludicrous extent. I hope that he will read with great care what I said. How the noble Lord summed up my words was totally different from what I actually said.
Lord McIntosh of Haringey: My Lords, what the Minister has not said—and I challenge him again so that he has an opportunity to say it—is that the sentence,
"You will be given a choice by the Trust about who you would like to see managing your home",
means that that choice will have an effect. In other words, that the tenant will actually choose and his choice will be brought into effect. If the noble Earl means that, that is fine, and I shall withdraw the amendment with pleasure. Does the noble Earl mean that?
The Earl of Caithness: My Lords, of course it means that the tenant will be given the choice. That is exactly what I have been saying all the way along.
Lord McIntosh of Haringey: My Lords, and that choice will be carried into effect, and there will be no cases of tenants being allocated to landlords whom they have not positively chosen? Is that what the Minister is saying?
The Earl of Caithness: My Lords, the noble Lord is now using a very wide phrase in order to make a certain set of assumptions. What I have said is that there will be choice for the tenants. But the noble Lord, Lord Ross of Newport, was absolutely right

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when he said that the HAT will be of limited duration. That is the key point that the noble Lord seems to forget from time to time, with respect to him.
It is at that stage that the HAT will want to give as much choice to the tenants as possible. They have a duty to be a short-life organisation. There are the reserve powers, as I said, clearly under Clause 83 for my right honourable friend the Secretary of State to give a direction to a HAT to carry out all the necessary consultation to be certain that the tenants' feelings and concerns are taken into account.
That of course will lead to presenting to the tenants as wide a choice as possible of landlords, and of course if the tenants have a preference for such a landlord, then I am sure that the HAT will be only too glad, providing that it is an approved landlord, for the tenants to transfer to that body.
Lord McIntosh of Haringey: My Lords, that is not what the letter says. The letter says that not only will you be given the choice. I forgot to read further down, where it says:
"You will be able to refuse any landlord the HAT offers you that you do not like".
The issue of the short life of the HAT has nothing to do with it. "You will be able to refuse any landlord". This is not consultation. What does that mean except a tenants' veto? In plain English, the Government must recognise that it is wrong, and that they are not enacting what the tenants have been told.
The rules of the House do not permit me to continue with this, but the issue cannot be clearer than it is now. If the Minister will stand up and say to me a last time that tenants will be able to refuse any landlord the HAT offers them that they do not like, then I shall sit down for the last time. The noble Earl has failed to do that. He has failed to meet the undertaking given by Mr. Trippier to all of the tenants.
The Earl of Caithness: Not at all.
Lord McIntosh of Haringey: My Lords, it is not appropriate for this House to pursue the matter in this way; but it will be pursued. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 100 [Tenants continuing as tenants of landlord]:
Lord Seebohm Lord Seebohm moved Amendment No. 21:
Page 80, line 42, at end insert ("or who gives notice of such a wish under section I02(5A) below").
The noble Lord said: My Lords, I wish to include Amendments Nos. 23, 24, 25 and 26 with Amendment No. 21. Before I start, I should like to correct a misprint in the Marshalled List, which I hope will be accepted. When Amendment No. 21 refers to "section 102(5A)" it should read "103(5A)". I hope that that may be accepted without further ado.
The main amendment here of course is Amendment No. 24, and that is the amendment to
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which I shall be speaking. This arises from that part of the Bill where a local authority will be selling tenanted property to another landlord. Quite rightly, the spirit of the Bill is of course that tenants should have tenants' choice and tenants' rights, and so they are going to be allowed to vote whether the transfer should take place or not. They are also allowed to stay put if they wish, and not be transferred whatever way the voting goes. The people who are left out are those who do not vote. They in fact in the Bill will be assumed to have voted for the change in favour of the purchaser.
This seems to me to be improper. I find it obnoxious that this inertia voting should be incorporated and enshrined in an Act of Parliament. However, I recognise a brick wall when I see it, and I know that we cannot pursue that particular argument any further. Actually the brick wall is not quite as thick as I thought it was. When we put Amendment No. 181 to your Lordships at Report stage it was defeated by only one vote. There are a great number of people, probably on all sides of the House, who agree that that aspect is unjust. Certainly people outside your Lordships' House—the local authority associations, the NFHA, t he NCVO, the Consumer Council—have all come out strongly against it.
The object of this amendment is quite simple. After a vote has taken place, and presumably if a change has been accepted, then the non-voters should be approached, should be visited, the result explained to them, and the implications explained to them so that they can then make their own voice, their own opinion, their own choice heard whether to move to the new landlord or not.
Of course we do not know why people do not vote, but there may be good reasons. They may be in ethnic minorities who do not understand, they may be sick, or they may have been away. There are all sorts of reasons. It is only fair that they in fact should be allowed to have this particular choice, It ties in with what the noble Earl has said many times: that the right of every tenant to stay put will remain.
I do not believe that this is going to be a delaying procedure. It should be quite simple. The applicant or his agent will be able to explain the implications clearly to the tenants who have not voted, and I believe that this will also more or less take away what I call the sting of the injustice imposed on them by the Bill. I believe for strong reasons that this House today should in fact accept this amendment. The opinion that I am expressing is not only held in this House, but right through the country. Everybody I have spoken to outside your Lordships' House agrees with this amendment. I hope that it will be accepted. I beg to move.
Lord Ross of Newport: My Lords, I rise in support of the amendment moved by the noble Lord, Lord Seebohm. We have discussed this issue on a number of occasions. As the noble Lord rightly said, I think that the matter has sunk in more and more both inside the House and certainly outside the House that the current situation set out in the Bill is unsatisfactory. That one person who does not vote

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should be transferred against his will or knowledge, or should find himself transferred, is one too many. Here we are introducing a fall-back situation. It will be left to the regulations to lay it down.
I beg the House to give this serious thought. It is not a just situation at the moment to say that people who, for some reason or another, have not voted on the change of landlord should suddenly find that they are under a totally new regime. We all know many cases where people will suddenly wake up and find out far too late, and that is not right. We ought to have this chance to go back and go round those who have not voted to explain exactly what is at stake. I believe that it is the Minister's birthday, and therefore I suggest that he might give us a reverse birthday present and accept this amendment.
5 p.m.
Lord Boyd-Carpenter: My Lords, as it is the Minister's birthday I should have thought on the contrary that that was a reason for not pressing him too hard on an amendment, particularly, if I may be allowed to say so, if it is a very odd amendment indeed. The concept that a person who abstains from voting when a vote is taken can suddenly say three weeks later that he would like to vote is a novel one.
Noble Lords: No!
Lord Boyd-Carpenter: If it applied at a parliamentary general election, it might have startling consequences. If it had applied in 1974 it might have resulted in a change in the decision of the electorate a week or two later. It seems very odd to complicate the procedure under the Bill by saying that a person who has not bothered to vote, for whatever reason, should suddenly be given a new vote in what I suppose amounts to a second ballot.
The problem surely is that if there is anything in this—personally, I have little sympathy with it, as I have said—it is a principle that may well be extended into other important matters. I hope that your Lordships will think carefully before going on.
Lord Seebohm: My Lords, the noble Lord, Lord Boyd-Carpenter—I am sure unintentionally—is completely misleading the House. There is no question of voting again. It is simply that the choice given to every other tenant to stay put is extended to those who did not vote.
Lord Boyd-Carpenter: My Lords, in other words, having declined to vote the first time, he is effectively being given a second vote. It is no use the noble Lord, Lord Seebohm, trying to run away from it. I thought that he was trying to get some merit out of it. As it is, he is abandoning his own thesis.
Lord Seebohm: That is not so.
Lord McIntosh of Haringey: My Lords, there are two important aspects to the amendment, and the noble Lord, Lord Boyd-Carpenter, has both wrong.
The first is his claim about those who abstain or refrain from voting. As he well knows, there are many
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reasons why people are unable to vote just as there are many reasons why they abstain from voting. I am sure that he is also well aware that those who are unable to vote often have opinions that are just as strong as the opinions of those who are able to vote. Earlier in the Bill we discussed people who may be in hospital or away. The Minister on Report made a useful manuscript addition to the interpretation of the Bill by saying at the very last minute there would be a postal ballot if necessary. We welcome that addition.
The fact remains that there will still be tenants who are unable to vote and who—
Lord Boyd-Carpenter: My Lords, if the noble Lord will study the amendment he will see that it is not restricted to those unable to vote; it deals also with those who do not vote, which is a very much wider category.
Lord McIntosh of Haringey: My Lords, I did not claim that it was restricted to those who were unable to vote. It was the noble Lord himself who claimed that it was restricted to those who refrained from voting. Of course the amendment covers both those who refrain from voting and those who are unable to vote. The noble Lord's strictures on the amendment apply perhaps with some minor force to those who refrain from voting; they certainly do not apply to those who are unable to vote.
The second way in which the noble Lord has the amendment wrong has already been corrected by the noble Lord, Lord Seebohm. This does not affect the ballot in any way. The ballot has taken place and it is closed. If the majority is in favour under the peculiar rules governing how the ballot is to be conducted—and we do not wish to raise that issue again—then the ballot is finished and there is no further effect.
The amendment provides that for those individuals who did not take part in the ballot, for whatever reason, there remains a choice but not for anyone else. They are not affecting the ballot; they are not delaying the decision or affecting the Government's intention in promoting what is called "tenants choice". Not only are they no longer conscripted into the "Yes" lobby—we made that argument and we lost—but they conscript themselves into the transfer, which they may not wish. If the noble Lord is correct and they have refrained from voting because they do not care and are happy but idle, that is fine: they will refrain from taking advantage of the opportunity given to them by the amendment, and no harm is done to the Government or to the democratic practice. The ones genuinely unable to vote—those who at the end of the process may feel that they did not understand the issues before them or the effect on themselves—will not influence the ballot in any way. They will simply have a final right to protect themselves and to opt to stay with the local authority.
This is a modest amendment; indeed, it is an impeccable amendment on Third Reading. It raises options that have not been raised before. It accepts the will of the House as expressed both in Committee

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and on Report. It cannot in any way endanger the Government's intentions, but it provides a valuable and necessary safeguard for a considerable number of individuals—tenants who may otherwise feel that it is not only their voice that has been conscripted but also their home. I hope that the House will support the amendment.
The Earl of Halsbury: My Lords, in supporting my noble friend's Amendment No. 24, I wish to draw a parallel with a situation that arose on the Education Reform Bill when we were faced with a choice after the first decision by a majority of those present and voting being parents. The solution, we found, was to have a second confirmatory vote when a majority of those present and voting as opposed to a majority of all parents carried the day.
All the situations are not identical; they are analogous to one another. We must cater for the fact that the community includes what I call the weaker brethren, people who really do not take in written documents. I do not mean that they are illiterate. But they become puzzled, flustered and frightened at having to take decisions in writing.
It is reasonable that the weaker brethren in this respect shall be given a second chance based not on the written word but on the spoken word after the situation has been explained to them. I think that that is in accordance with the kind of sociological situation that we would wish to see prevailing in the country. If my noble friend cares to divide the House, I shall follow him into the Lobby.
Lord Jenkin of Roding: My Lords, I hope that your Lordships will not be beguiled by some of the arguments in favour of the amendment. I wish to make a brief point that has not yet been argued. It is of course right that efforts should be made to ensure that everyone asked to cast a vote in a matter that is obviously of some importance to them should understand what it is all about. As I understand it, the procedures have been designed to that effect.
In fact, it goes further than that. People will have three weeks in which to decide to record their vote. If somebody who is eligible to vote has not yet done so, I believe that I am right in saying that he would then be called upon by an independent teller to make sure that the voting paper had reached him and that he understood what was happening.
The amendment seems to carry paternalism to the point of absurdity. A tenant who has already been called on and who has been given an explanation but who nevertheless decides not to vote will be given a further opportunity to decide whether he wishes to do so. This is piling Pelion upon Ossa; it is making the procedure so drawn out as effectively to frustrate, or to risk frustrating, the whole exercise.
I happen to regard this provision as one of the most important in the Bill. Four years ago when I was Secretary of State for the Environment, I made a speech to the Institute of Housing in which I questioned whether it made sense for us to be the only country in Europe with enormous local authority housing estates which to a large degree had not been a great success. It is surely right to offer tenants the
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opportunity to opt out. The Opposition have posed obstacles to prevent this taking place at every stage of the Bill. I hope that the amendment will be thrown out.
Lord Somers: My Lords, I cannot help feeling that that argument is misleading. The choice is not as to on which day we will have a flower show or something like that; it is a highly important choice that will affect not just the tenant but the whole neighbourhood. It is highly important that the Minister should have not just a majority opinion but an accurate opinion of all the tenants before any proceedings are taken.
Baroness Fisher of Rednal: My Lords, the noble Lord, Lord Seebohm, moved the amendment in a manner which was easily understood by us all. What worries me more than anything is the fact that Conservative Members of the House do not realise that we are talking about people's homes. In their view, they may be humble homes, but they are their homes. At present they are terribly worried about what will happen. As the noble Lord from the Cross-Benches said in a rather nice phrase, we should be thinking deeply about our weaker brethren. Let us have a little humanity. Let us have a little of the Christianity that was used in the Education Bill. Let us remember that we are talking about people's homes. They are of the most importance to the majority of the people of whom we are talking this afternoon.
The Earl of Caithness: My Lords, the debate has raised some important issues, most of which we have covered before, but I say to the noble Baroness, Lady Fisher of Rednal, that one thing that we are giving in Part IV, and for the first time, and which must surely be welcomed by many tenants, is the opportunity to choose a new landlord. That is something which has been denied to them for far too long.
These amendments would add a new procedural stage to the tenants' choice process in Part IV. After consultation under Clause 102 had given the applicant the ability to serve a notice of intention to proceed under Clause 103, there would be a new round of consultation, confined to eligible tenants who had abstained in the Clause 102 ballot. My noble friend Lord Boyd-Carpenter was absolutely right to say that they would have another chance, if they wished, to opt to remain a tenant of their existing landlord.
The principle underlying these amendments is not a matter of dispute between the noble Lord, Lord Seebohm, and the Government. Tenants entitled to vote must have every chance to do so. In practice, however, the arrangement here would add nothing to what we have already because it duplicates what will already have happened during the original consultation period under Clause 102.
As I explained on Report, we envisage that tenants will initially have three weeks to return their ballot papers when consultation takes place under Clause 102. We shall consult on this arrangement, which will be set out in regulations. If a tenant who has a vote to cast fails to register it during those three weeks, or

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returns an ineffective ballot paper, the independent teller will call back. His job will be to make inquiries and to help tenants, if they want to do so, to cast an effective vote. This call-back will not be at the option of the applicant, although it will be he who pays for the teller's work. The requirement will be part of a contract which the Housing Corporation intends to require all applicants to enter into with the tellers: this will be a condition of applicants' approval. Nor will it be any part of the independent teller's job to advise tenants on whom he calls back about the merits or otherwise of the applicant's case. He will be there to collect and count the vote; and to ensure that the ballot works smoothly and fairly.
So, by the time that stage in the process has been reached, tenants will have had their chance to vote, together with the information they will need about the process and about the applicant's offer to make sure that their vote can be an informed one. They will have been approached by the teller, if they have initially abstained, who will have checked that their abstention is deliberate and will offer any necessary practical help with casting a vote if it is not. No secure tenant need transfer against his or her will. These effects are the very aims of the noble Lord's amendments and I hope that, in the light of what I have said, he will accept that they are not necessary. The high aims of the noble Lord's amendments are exactly what the Government have in mind.
The noble Earl, Lord Halsbury, drew a parallel with the Education Reform Act. With respect, I beg to differ with him. For one thing, tenants' choice allows individual choice which, I am sure the noble Earl will recall, is not the case with the Education Reform Act. Only a whole school can decide to remain with its local education authority or to transfer. Therefore, a second ballot on the model that we propose is not appropriate.
I should like to say a word more about the information that tenants will need. The conditions of an applicant's approval will oblige them to keep tenants informed about progress with the application as the procedure works through. When the time for formal consultation arrives, tenants will have a contractual offer of new tenancy terms from the applicant. At the same time, but separately, from the independent teller they will have their ballot form accompanied by comprehensive and understandable information about the process, including the consequences of voting either way or of abstaining.
The form of the information that the teller and the applicant provide will take account of any significant foreseeable special needs that the tenants may have; for instance, Braille material or languages other than English. We have again heard suggestions that tenants will be transferred against their will through ignorance or inadvertence. I believe that the arrangements I have outlined for keeping tenants informed and for running the ballot through an independent teller should be successful in avoiding that difficulty in all reasonably foreseeable circumstances.
It is with some irony that I recall that some noble Lords opposite were surprised that we had provided
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for the independent teller in the first place. They were alarmed at the thought of the independent teller being able to call back and check with the person who had abstained. On mature reflection, I believe that noble Lords opposite see distinct advantages in that system. I repeat, what the noble Lord, Lord Seebohm, wants is exactly what the Government want and what the Government have already provided for.
5.15 p.m.
The Earl of Halsbury: My Lords, before the Minister sits down will he please confirm that I never said that the procedure was parallel or identical with the Education Reform Act; I merely said that it was analogous in the sense that people could rethink what they had said.
The Earl of Caithness: My Lords, with respect to the noble Earl, I shall rephrase my words and say that the analogy is not a strict one because this time one has individual choice.
Lord McIntosh of Haringey: My Lords, I was going to rise on the same point before the Minister sat down. Will he confirm that there is a difference between this Bill and the Education Reform Act other than that to which he referred in responding to the noble Earl, Lord Halsbury? The difference is that in the Education Reform Act the ballot does not rely upon those who abstained or who are unable to vote as being counted as in favour of the transfer.
The Earl of Caithness: My Lords, with the leave of the House, that point covers the ground that has been discussed at all stages of the Bill. We are offering indvidual choice for the tenant. We are not allowing tenants to be transferred against their will. We are making every effort during the consultation period, which will be a total of about 13 weeks in all, three weeks of which will be available for the independent teller to return to those who have abstained, to ensure that the tenants fully understand the implications of abstaining.
Lord Ross of Newport: My Lords, has the Minister canvassed any big blocks of flats, for example in the east of London, where time after time knocking on the door brings no response? People will not even open their doors there at night. That is the problem we are facing. Tellers can go back time after time, but very often they will not find a tenant.
The Earl of Caithness: My Lords, now the noble Lord is arguing against what the noble Lord, Lord Seebohm, and the Government want. The Government want exactly what the noble Lord, Lord Seebohm, seeks in his amendment; the only difference is that we have provided for it.
Lord Seebohm: My Lords, I am afraid I am unconvinced by the arguments of the Government. There is a principle here which I still cannot stomach. I propose to divide the House.
5.20 p.m.
On Question, Whether the said amendment (No. 21) shall be agreed to?
Their Lordships divided: Contents, 99; Not-Contents, 109.

DIVISION NO. 1

CONTENTS

Addington, L.

Jeger, B.

Airedale, L.

John-Mackie, L.

Allen of Abbeydale, L.

Kearton, L.

Ardwick, L.

Kilbracken, L.

Attlee, E.

Kilmarnock, L.

Aylestone, L.

Lawrence, L.

Banks, L.

Llewelyn-Davies of Hastoe, B.

Beaumont of Whitley, L.

Lloyd of Hampstead, L.

Birk, B.

Lockwood, B.

Blackstone, B.

Longford, E.

Blease, L.

McIntosh of Haringey, L.

Bonham-Carter, L.

McNair, L.

Bottomley, L.

Milner of Leeds, L.

Broadbridge, L.

Monson, L.

Bruce of Donington, L.

Mulley, L.

Callaghan of Cardiff, L.

Murray of Epping Forest, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Carter, L.

Northfield, L.

Chandos, V.

Ogmore, L.

Cledwyn of Penrhos, L.

Peston, L.

Cocks of Hartcliffe, L.

Pitt of Hampstead, L.

Craigavon, V.

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Diamond, L.

Prys-Davies, L.

Donaldson of Kingsbridge, L.

Rea, L.

Dormand of Easington, L.

Reilly, L.

Ennals, L.

Ritchie of Dundee, L.

Ewart-Biggs, B.

Ross of Newport, L.

Falkender, B.

Rugby, L.

Falkland, V.

Sainsbury, L.

Fisher of Rednal, B.

Seebohm, L. [Teller.]

Fitt, L.

Sefton of Garston, L.

Gallacher, L.

Serota, B.

Galpern, L.

Shannon, E.

Gladwyn, L.

Shaughnessy, L.

Graham of Edmonton, L.

Somers, L.

Greenhill of Harrow, L.

Stallard, L.

Gregson, L.

Stedman, B.

Grimond, L.

Stewart of Fulham, L.

Halsbury, E.

Stoddart of Swindon, L.

Hanworth, V.

Strabolgi, L.

Harris of Greenwich, L.

Thurlow, L.

Hart of South Lanark, B.

Tordoff, L.

Hooson, L.

Turner of Camden, B.

Houghton of Sowerby, L.

Underhill, L.

Hunter of Newington, L.

Wallace of Coslany, L.

Hylton, L.

Wigoder, L.

Hylton-Foster, B.

Williams of Elvel, L.

Jacques, L.

Willis, L.

Jay, L.

Winterbottom, L.

NOT-CONTENTS

Arran, E.

Cameron of Lochbroom, L.

Auckland, L.

Campbell of Alloway, L.

Bauer, L.

Campbell of Croy, L.

Belhaven and Stenton, L.

Carnegy of Lour, B.

Belstead, L.

Carnock, L.

Blatch, B.

Cathcart, E.

Blyth, L.

Clitheroe, L.

Borthwick, L.

Colville of Culross, V.

Boyd-Carpenter, L.

Constantine of Stanmore, L.

Brabazon of Tara, L.

Cottesloe, L.

Brougham and Vaux, L.

Cranbrook, E.

Broxbourne, L.

Crickhowell, L.

Bruce-Gardyne, L.

Croft, L.

Butterworth, L.

Davidson, V. [Teller.]

Caithness, E.

Denham, L. [Teller]

Camden, M.

Dundee, E.

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Eden of Winton, L.

Murton of Lindisfarne, L.

Elibank, L.

Napier and Ettrick, L.

Elliott of Morpeth, L.

Nelson, E.

Elton, L.

Newall, L.

Fortescue, E.

Nugent of Guildford, L.

Fraser of Kilmorack, L.

O'Brien of Lothbury, L.

Gainford, L.

Orkney, E.

Gisborough, L.

Orr-Ewing, L.

Grimthorpe, L.

Oxfuird, V.

Haig, E.

Pender, L.

Hailsham of Saint Marylebone, L.

Pennock, L.

Penrhyn, L.

Hardinge of Penshurst, L.

Peyton of Yeovil, L.

Havers, L.

Portland, D.

Hesketh, L.

Rankeillour, L.

Hives, L.

Reay, L.

Home of the Hirsel, L.

Rees, L.

Hood, V.

Reigate, L.

Hooper, B.

Rochdale, V.

Jenkin of Roding, L.

Rodney, L.

Johnston of Rockport, L.

Romney, E.

Joseph, L.

Rootes, L.

Kimball, L.

St. Davids, V.

Lauderdale, E.

St. John of Fawsley, L.

Lewin, L.

Sanderson of Bowden, L.

Long, V.

Skelmersdale, L.

Lucas of Chilworth, L.

Strathclyde, L.

Lurgan, L.

Strathspey, L.

Macleod of Borve, B.

Swinfen, L.

Malmesbury, E.

Thomas of Gwydir, L.

Margadale, L.

Thorneycroft, L.

Marley, L.

Trafford, L.

Merrivale, L.

Trefgarne, L.

Milverton, L.

Ullswater, V.

Monk Bretton, L.

Vaux of Harrowden, L.

Montgomery of Alamein, V.

Waldegrave, E.

Mowbray and Stourton, L.

Wolfson, L.

Moyne, L.

Wynford, L.

Munster, E.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.29 p.m.
Clause 102 [Consultations by applicant]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 22:
Page 82, line 35, after ("acquisition") insert ("and continued to occupy the dwelling during the period referred to in subsection (1) above").
The noble Lord said: My Lords, with this amendment we return to the issue of who is qualified for the ballot on transfer of local authority estates. I am glad to say that the two sides of the House are moving somewhat closer together on these matters. We, for our part, are agreed that it would be inappropriate for those who move in after the relevant date—that is, the date when the consultation procedures begin—to have a vote. What we are now seeking to secure by this amendment is that those who move out after the relevant date should not have a vote; in other words, that the voting should be by those who are tenants when the consultation procedure starts and who continue to be tenants, who do not move away from the area or exercise the right to buy.
This has implications for the ballot in two senses. In one sense, if those who move out are excluded, it decreases the likelihood of there being people who do not vote, because those who move away are clearly not going to vote. They will not be interested in voting and they may be available to vote. In that sense, since the Government have accepted that there

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should be a 50 per cent. turn-out in order for the vote to be effective, the process of transfer will be helped by our amendment.
In the other sense, those who do not vote because they have moved away or have exercised their right to buy will be counted in the "yes" lobby, as we have debated throughout the course of the Bill. To that extent the possibility of the transfer will be increased if those who move away or exercise their right to buy are excluded from the ballot.
The political effects work in both directions. Noble Lords must make their own judgments about that. I am not moving the amendment on the basis of its effect on the ballot. I am moving it because it seems to me simple common sense that those who will not be there when the transfer takes place or who are not affected by the transfer because they have exercised their right to buy, should not take part in a ballot with which they are not concerned. The electorate should be those who will be affected by the decision.
The Minister has been good enough, within the last 48 hours, to write two letters to me on this matter. I hope that the effect of those letters will be that he will see the point behind my argument. I commend the amendment to the House. I beg to move.
5.30 p.m.
The Earl of Caithness: My Lords, the noble Lord, Lord McIntosh of Haringey, wants to ensure that qualifying tenants who were in residence on the relevant date do not have a vote on the future of their former homes if they have moved out before the consultation. He also wishes to ensure that those who complete the purchase of their own houses under the right to buy between the relevant date and consultation do not have a vote. I quite agree with his aim, and I am happy to be able to say that the Bill as drafted achieves it almost completely.
I should like to clarify that under Clause 103 only "tenants" are able to vote. The categories of eligible tenants are defined in Clause 102. Under Clause 102(2)(a) the test for entitlement to vote which applies to qualifying tenants is indeed that they must have occupied a dwelling house proposed to be included in the acquisition on the relevant date. But the second part of the test is whether at the time of consultation they remained qualifying tenants (as defined in Clause 93(3) and (4)). To be a qualifying tenant they must still be a secure tenant who satisfies Clause 93(3) and (4).
Because the majority calculation in Clause 103(2) is couched in terms of
"those to whom section 102 applies."
tenants who, before consultation, depart and who are no longer qualifying tenants, or who exclude their house by buying it, are disregarded for the purposes of the collective vote.
On careful consideration, however, it seems to us that one restricted anomaly of the kind that the noble Lord, Lord McIntosh of Haringey, had in mind would perhaps be a possibility. As drafted, Clause 102(2)(a) could arguably result in a person who had moved to a different dwelling owned by the same
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landlord between the relevant date and consultation having a vote, although the second dwelling did not form part of the property included in the application.
Like the noble Lord, I want to avoid that. His amendment is on the right lines, and I invite your Lordships to accept it. I should enter the caveat that we shall want to look further very carefully at the way the amendment fits with the drafting of Part IV as a whole and that we may want to consider a little fine tuning at a further stage in another place. But any such fine tuning would be technical and practical in nature and would not prejudice the basic principle.
I am grateful to the noble Lord for identifying the need for the amendment.
Lord McIntosh of Haringey: My Lords, I wish to thank the Minister without reserve for what he has just said. I accept that it may be necessary to improve the drafting in another place. I am sure that we shall not object to any of the fine tuning to which the noble Earl referred. I am grateful for the recognition of the validity of the argument we have put and for the kind words the Minister has used in agreeing to the amendment.
On Question, amendment agreed to.
[Amendments Nos. 23 to 26 not moved.]
Clause 104 [Duty to complete and consequences of completion]:
The Earl of Arran The Earl of Arran moved Amendment No. 27:
Page 84, line 9, after ("determined") insert ("and, where appropriate, any determination has been made under section 103(7) above").
The noble Earl said: My Lords, Amendment No. 27 is consequential on the clawback provisions inserted by government Amendments Nos. 175A, 175B, 188A, 193A and 194A on Report. It will ensure that where there is a clawback determination the duty to complete imposed by Clause 104 does not apply until that determination has been carried out. I beg to move.
On Question, amendment agreed to.
Clause 105 [Consent required for subsequent disposals]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 28:
Page 85, line 11, at end insert ("but, before giving any such consent, the Secretary of State—

(a) shall satisfy himself that the person who is seeking the consent has taken appropriate steps to consult every tenant of the whole or any part of the property proposed to be disposed of; and

(b) shall have regard to the responses of any such tenants to that consultation.").

On Question, amendment agreed to.
Clause 121 [Rent officers: additional functions relating to housing benefit etc.]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 29:
Page 93, line 5, leave out from ("to") to end of line 6 and insert ("criteria drawn up after consultation with such organisations as appear to the Secretary of State to be concerned").
The noble Lord said: My Lords, this amendment is in exactly the same terms as Amendment No. 128A which I moved at Report stage and which I withdrew. Unfortunately, it is necessary to bring the matter back because of the Minister's statements at Report stage, which I found not unhelpful.
With this amendment we are concerned with Part V of the Bill and housing benefit. Throughout the passage of the Bill we have been concerned with two issues. First, whether housing benefit will be adequate to meet the rents being paid by tenants—in other words, we are concerned that tenants who arc already poor will not become poorer as a result. Secondly, we are concerned that, because the housing benefit scheme is administered through local authorities, local authorities should pay housing benefit in full and not withhold any part of it—again leaving those tenants who are already poor even poorer—and that they should not find that they are not reimbursed by Government in accordance with the conditions of the scheme, with the result that the local authority and its ratepayers or community charge payers end up poorer.
It is common ground between us that the effect of the Bill will be to increase rents. The Government have recognised throughout that when rents are increased those who are in receipt of housing benefit will need to have their benefit increased accordingly. The Government have always recognised—and I pay tribute to them for it—that that will cost a great deal more money. Without having studied the public expenditure statement of 1st November in detail, I have no doubt that further provision is made for that in the estimates.
However, two queries remain, to only one of which we now return at Third Reading. The query to which we return is whether the housing benefit to be paid will be sufficient to cover the rent paid. When I asked the Minister specifically at Report stage whether he could give me an assurance that no one in need of housing benefit would be worse off because housing benefit was being paid at a lower level than the free market rent, he did not say that he could not give me that assurance. He said—and I paraphrase because I do not have the Official Report before me—"I shall have to think about it". He did not make any offer and did not undertake to change his mind, but he said that he would have to consider what had been said.
I am an optimist. I like to think that Ministers can change their minds and see the force of arguments. Indeed, we have just seen an example of that. I am grateful for that whenever it happens. I wanted to give the Minister an opportunity to share his thoughts with the House since he made that statement at Report stage. I should like him to have a chance to say to the House that rents which are free market rents—that was his phrase—or rents in a free market will be recognised for housing benefit purposes, that they will be paid in full under the housing benefit and that (to repeat my phrase) those who are already poor will not be made poorer as a result of this legislation.
If he can share that position with the House I am sure that not only will noble Lords on this side be grateful but the many people who are in receipt of
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housing benefit and who are worried by the risks for them that are involved in this Bill will be greatly relieved. I beg to move.
The Earl of Caithness: My Lords, let me start by reaffirming once more what has already been emphasised many times in the course of debate in your Lordships' House and in another place and indeed outside Parliament as well: housing benefit will continue to be available to those who genuinely need help with their housing costs. That includes private tenants paying rents up to open market level. Let there be absolutely no doubt at all about the Government's commitment in this respect.
In giving rent officers the new function of scrutinising the rents being paid by private tenants who claim benefit, we are simply seeking to ensure that those rents are not above market level; in other words, that they are no higher than the rents being paid by tenants who are paying out of their own pockets without the aid of benefit. The procedure is there to guard against exploitation of the system. It in no way represents a weakening of the firm commitment we have made on the availability of benefit.
However, we have also made quite clear our view that housing benefit should not be used to allow claimants to live in the sort of housing which the vast majority of people could not reasonably expect to afford. We have therefore said that we will in due course—as soon as the necessary evidence on open market rents is available—impose limits on the housing benefit payable in a case where the claimant is living in accommodation which is at the top end of the market within the area concerned.
Our intention is to give rent officers the task of identifying such upmarket accommodation—against criteria laid down by the Secretary of State—alongside the function of assessing rents in the way that I have already described. The primary purpose of Clause 121(4) is thus to provide for the making of regulations which limit benefit by reference to the determinations which rent officers make. Let me stress that the Secretary of State already has power under the Social Security Act 1986 to place limits on housing benefit. Clause 118(4) merely enables him to impose such limits by reference to the determinations made by rent officers. The provision does not therefore represent any radical new departure.
The amendment moved by the noble Lord, Lord McIntosh, would remove the provision as drafted and substitute a far less specific formula which referred merely to criteria drawn up in consultation with interested organisations. As I made clear when he moved an identical amendment at Report, there will be a full process of consultation before any restrictions on benefit are introduced.
My right honourable friend the Secretary of State for Social Security is in fact under a statutory requirement to consult the local authority associations on any regulations which he proposes to make under the Social Security Act. But we are fully committed to the role of the rent officer in relation to the proposed restrictions on benefit and therefore to

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the enabling provision contained in Clause 121(4). There is thus no prospect of our accepting the alternative approach reflected in the noble Lord's amendment.
Lord McIntosh of Haringey: My Lords, I made clear that this amendment was tabled in order to give the Minister an opportunity to share his thoughts with the House. I pay tribute to him; he has done so. He has attempted to make clear the situation in which tenants will find themselves and by implication he means, I take it, that local authorities will have the resources to do what he said.
One of his phrases in which I took particular interest was that local authorities should pay housing benefit up to the level of rent which was comparable to rent paid for comparable property by those who are not in receipt of housing benefit. He made the very proper exception, which we have always accepted, that there may be extreme cases—the example has always been that of a penthouse in Mayfair—in which someone on housing benefit is living in property that is quite unsuitable to his or her station in life. That is the way, I suppose, that people in this Chamber would put it.
We accept that at the extreme there could be abuses and even agreement between landlord and tenant to charge a higher rent in order to attract higher housing benefit. We have never disagreed with that argument and have never felt that there should not be procedures to avoid such abuses, though we claim that such procedures exist in the housing benefit procedures that were introduced in April this year and indeed existed in a less effective form in earlier housing benefit legislation. So to some extent the penthouse in Mayfair is something of a red herring and ought not to have the emphasis that it has been given by Government Ministers over recent months.
However, the acceptance that the Minister has just expressed—namely, that the rent should be paid up to the rent officer level or the rent assessment committee where that is appropriate; I take it that he would accept that —is a very valuable one. It helps to ensure that the intention, which we all have, of not penalising those in greatest need—in financial need which makes them in need of housing benefit—should be paramount.
At the end of this discussion let us he clear where we stand. Local authorities will not be able to pay less in housing benefit than the rent officer limit or the rent set by rent assessment committees and local authorities will not be penalised by central government when they use their discretion in ways in which they are legally required to use it; for example, when they pay housing benefit to someone over 60 when there is no alternative accommodation. On the basis that my understanding of the Minister's words confirms those two points—I hope I am right—I have pleasure in begging leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
Clause 123 [Amendment of Housing Act 1985]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 30:
Page 94, line 13, at end insert—
("(3) The repeal by this Act of paragraphs 6 and 8 of Schedule 5 shall not affect the operation of either of those pararaphs in any case where the tenant's notice claiming to exercise the right to buy was served before the repeal comes into force unless, at that time, no notice in response had been served under section 124 of the Housing Act 1985 (landlord's notice admitting or denying right to buy).
(4) For the purposes of subsection (3) above, no account shall be taken of any steps taken under section 177 of the Housing Act 1985 (amendment or withdrawal and re-service of notice to correct mistakes).").
The noble Earl said: My Lords, I beg to move Amendment No. 30, which is consequential on the amendments moved by my noble friend Lord Swinfen on Report and which were accepted by the House. The effect of those amendments was to remove the exclusion from the right to buy of certain dwellings constructed or designed for the disabled.
The new subsections (3) and (4) to be added by the amendment now before your Lordships are a transitional provision to provide that the change shall have effect in relation to applications made before commencement where the landlord has not formally responded to the application by admitting or denying the right to buy at that date. Under Clause 141, Clause 123 will come into force two months from the date of Royal Assent. This transitional provision will mean that tenants who have already applied to buy will not have to make a fresh application in order to take advantage of the change in the law, provided the landlord has not formally responded to their application by the date of commencement. I beg to move.
On Question, amendment agreed to.
Lord Carter Lord Carter moved Amendment No. 31:
Page 94, line 13, at end insert—
("(3) After section 157 of the Housing Act 1985 there shall be inserted the following section—
157A.—(1) Where in pursuance of this Part a conveyance or grant is executed by a local authority, a housing association, a Housing Action Trust, a Development Corporation or the Development Board for Rural Wales ("the landlord") of a dwelling house which—

(a) has features which are substantially different from those of ordinary dwelling houses and are designed to make it suitable for occupation by physically disabled persons, and

(b) it has had those features since it was constructed or, where it was provided by means of the conversion of a building, since it was so provided,

the conveyance or grant may contain a covenant limiting the freedom of the tenant (including any successor in title of his and any persons deriving title under him or such a successor) to dispose of the dwelling house in the manner specified below.
(2) The limitation is, subject to subsection (4), that until such time (if any) as may be notified in writing by the landlord to the tenant or a successor in title of his, there will he no relevant disposal which is not an exempted disposal without the written consent of the landlord; but that consent shall not be withheld if the disposal is to a person satisfying the condition stated in subsection (3).
(3) The condition is that the person to whom the disposal is made, or a member of his household is a disabled person within the meaning of section 29(1) of the National Assistance Act 1948 and the dwelling house is considered to be suitable for his requirements.

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(4) If the Secretary of State or, where the landlord is a housing association, the Housing Corporation, consents, the limitation specified in subsection (2) may be replaced by the following limitation, that is to say, that until the end of the period of ten years beginning with the conveyance or grant there will be no relevant disposal which is not an exempted disposal, unless in relation to that or a previous such disposal—

(a) the tenant (or his successor in title or the person deriving title under him or his successor) has offered to reconvey the dwelling house, or as the case may be surrender the lease, to the landlord for such consideration as is mentioned in section 158, and

(b) the landlord has refused the offer or has failed to accept it within one month after it was made;

(c) a disposal in breach of such a convenant as is mentioned in subsection (1) is void.

(5) A disposal in breach of such a covenant as is mentioned in subsection (1) is void.
(6) Where such a covenant imposes the limitation specified in subsection (2), the limitation is a local land charge and the Chief Land Registrar shall enter the appropriate restriction on the register of title as if application thereof had been made under section 58 of the Land Registration Act 1925.
(7) An order under this section—

(a) may make different provision with respect to different cases or descriptions of case, including different provision for different areas, and

(b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament." ").

The noble Lord said: My Lords, your Lordships will recall that at Committee stage we accepted an amendment moved by the noble Lord, Lord Swinfen, which extended the right of disabled tenants to buy local authority housing that had been substantially adapted for disabled people or was substantially designed for them. It ended the discrimination against disabled people who had previously been excluded from the right to buy.
The amendment that stands in my name, if passed, would ensure that when the specially designed housing—which we have all agreed is in short supply is sold, it is sold to a disabled person or a person whose household contains a disabled person. Alternatively, it gives the local authority the first option to purchase it at the going market price. The amendment does not impose any restrictions on the disabled person or his family as the house would have to be sold at the market price, thus ensuring that there is no financial loss involved. The amendment ensures that in future specially designed housing will continue to be occupied by disabled people.
We are all agreed that housing designed for disabled people is in short supply and that rented housing represents the only opportunity for many disabled people—the great majority of disabled people—to obtain the accommodation in which they can live with the maximum independence. Perhaps I may remind noble Lords of the figures that I gave at Committee stage. There are some 40,000 houses which have been adapted and specially designed. There is a waiting list of 18,000. In the 1970s the Department of the Environment estimated that there was a requirement for 460,000 houses. Perhaps I may also remind noble Lords that recently the first part of the OPCS survey on disabled people was published. It indicates that the number of disabled people in the community is much greater than was thought. It could well mean that the demand for this housing is even greater than we had formerly considered.
This clause is an attempt to reconcile the equality of opportunity for disabled people—and end the discrimination against them—with the needs of disabled people and their families who will be seeking housing in the future. In doing so it adopts the same approach used for housing in national parks and in rural areas. Indeed, in agriculture we are familiar with a restriction on farm housing which limits it to agricultural use. Tenants will be able to buy their homes. However, when they or their heirs decide to sell it, they will either have to sell it to a disabled person or to a person whose household contains a disabled person, or give the local authority the first option to purchase it at the going market price. The local authority can waive the condition. Indeed it does not have to impose it in the first place. The local authority would also have to make its decision extremely quickly on whether it should exercise its option to repurchase. The proposal does not appear to impose onerous restrictions on existing tenants or their families. It increases the possibility that in future the houses concerned will continue to be used by disabled people.
To turn briefly to the technicalities of the amendment, the effect is to insert two clauses of restrictive covenant into the disposal or properties which are built for the disabled which have been acquired under the right to buy. The restrictions apply only to dwellings which have had special features incorporated into them when they were built or converted. They do not apply to dwellings which were adapted after they were built.
The first class of restrictive covenant which the landlord may insert without the consent of the Secretary of State is a prohibition on disposal without the consent of the landlord. The second class of restrictive covenant may be inserted only with the consent of the Secretary of State or Housing Corporation. These covenants can be included only in place of, and not in addition to, the restrictive covenants which I have already mentioned. They consist of pre-emption clauses lasting for a period of 10 years from the date of conveyance or grant.
Neither class of covenant can be applied to exempted disposals. These are disposals which include situations where one joint purchaser decides to sell to another joint purchaser, or the owner disposes of the dwelling—by inheritance, for example—to a spouse or former spouse, or where a member of the family who has been living with the owner for a period of at least a year before the disposal, inherits the property.
The restrictive covenants are analogous to those which currently operate in the national parks and areas of outstanding natural beauty. The amendment represents a reasonable compromise solution to a very difficult problem and attempts to balance the rights of the disabled against the perceived need of the increase in supply of adapted housing to rent. I beg to move.
Lord Swinfen: My Lords, I understand the desire of the noble Lord, Lord Carter, to ensure that there is a sufficient supply of suitable accommodation for physically disabled people. However, this is not the

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route through which one should achieve this objective. The real route is, as I have said before in your Lordships' House, to amend the building regulations so that far more newly buillt accommodation is suitable, and easily made even more suitable by the simple addition of the necessary handgrips, and so on.
My amendment at both Committee and Report stages was designed to remove discrimination from physically disabled people and to put them in the same position as able-bodied people. Your Lordships were good enough to accept that amendment. I am afraid that the amendment of the noble Lord, Lord Carter, which we are now discussing, reverses that position. After the relevant period, which I believe is three years, an able-bodied purchaser can sell the dwelling that he has bought to anyone on the open market. Restricting the term to 10 years adds a possibly onerous burden on people who buy this accommodaton who have a disabled member in their family. By adding the right of pre-emption, they are restricting the market to one: that is, the housing authority from whom the property was bought in the first place. That is certainly not an equal position with able-bodied people.
The noble Lord said that this applied to specially built accommodation. I gave examples at Committee stage, and others at Report stage, where local housing authorities have sold accommodation to able-bodied people but where exactly similar accommodation has been occupied by a disabled family they have used certain identical features as grounds for refusing the sale. This would continue. Housing authorities would be able to say that certain features—such as wide doors, wide corridors, low kitchen units—were special features which are now being included in all purpose-built, modern property built with Housing Corporation funds. The height of kitchen units sometimes can be higher to suit particularly tall women, or men who like to cook for their wives.
This amendment is a retrograde step. If the noble Lord takes it to a division, I should not be able to go with him into the Lobby; I should have to go into the opposing Lobby.
Baroness Masham of Ilton: My Lords, the noble Lord, Lord Carter, is usually a great friend of disabled people. In this matter he would not be a friend. This amendment is discriminatory and complicated. Disabled people are against all types of discrimination, however big or small. I should like to take this opportunity to say that I hope more suitable housing for disabled people will be built by corporations, local authorities and all people building houses throughout the country. A house suitable for a disabled person can be used by any family.
6 p.m.
Lord McIntosh of Haringey: My Lords, although I fully appreciate the sincerity behind the last two speeches, and the feelings which give rise to them, I fear that they do not represent the situation. The
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noble Lord, Lord Swinfen, talked as though this amendment would reverse the decision taken by the House last week. I do not see that that can be the case.
Lord Swinfen: My Lords, the noble Lord will forgive me. I did not say that it would reverse the decision, but that it was a retrograde step.
Lord McIntosh of Haringey: I stand corrected, my Lords. When the noble Lord refers to the need for amendment of building regulations one can readily agree with him. When the noble Baroness, Lady Masham, refers to the need for more suitable housing for disabled people, one can only agree with her. But surely we should be seeking to find more suitable housing for disabled people from whatever source and we should be adding the best possible number of houses suitable for disabled people to the existing houses available for the disabled. Additions to the stock of housing suitable for the disabled are, by definition, only at the margin. If we produce even 10 per cent. of the stock in any one year, it will take 10 years to make up the stock. It is more likely that we shall be producing 1 per cent. of what is required rather than 10 per cent., although I do not know the figures.
The noble Lord, Lord Swinfen, spoke as if, because there is only one purchaser, this was discrimination against the disabled. There are two purchasers proposed in the amendment: one is another disabled person and the second is a local authority. The amendment makes it very clear that the local authority will have to pay the market price, so that there is no financial discrimination whatsoever against disabled people as a result of this. The payment of the market price by somebody under pre-emption rights is a well established principle in housing legislation. It has not caused any great difficulty in other areas and there is no reason why it should cause difficulty now.
Behind all this I must return to the fundamental point which we have to consider. There is not a single interest of all disabled people. There are disabled people with different needs and different interests. We have to consider them all. Last week your Lordships took the decision to pay scrupulous attention to those disabled people who are living in council housing and who wish to exercise the right to buy. So be it. The amendment does not seek to reverse that decision in any way, but it looks to another group of disabled people, a very much larger group of the disabled, who are in need of suitable housing but who are unable to find it because it is in too short a supply for them to reach the top of the council waiting list. Without in any way damaging the interests of the first group, the amendment seeks to protect the interests of the second group by not putting to waste—because specially adapted houses go to waste if they are not used by the people for whom they are adapted—the significant part of the housing stock which has been subject to the right to buy.
I cannot see how there is any serious loss to the rights of disabled people and it seems to me that a very large and important group, those disabled people who are living in unsuitable accommodation because they cannot find adapted housing, will be

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helped by the amendment. I hope that noble Lords, on whichever side they voted last week, will feel able to support the amendment moved by my noble friend.
Lord Boyd-Carpenter: My Lords, the amendment moved by the noble Lord, Lord Carter, is obviously well intentioned. It is put forward against the dilemma which has confronted all your Lordships at earlier stages of the Bill when the discussion took place on the ability of disabled people to have equal rights with able-bodied people over the purchase of their homes. There is a real dilemma. Either one discriminates in one way or another against the disabled or one risks reducing the stock of suitable accommodation for other disabled people. There is no avoiding that dilemma, although I believe the amendment is intended to seek to find a way of so doing.
I am afraid I must agree with my noble friend Lord Swinfen that the effect of the amendment, however well intentioned, is to restore a degree of discrimination against the disabled which the House decided at the earlier stage should not be allowed to continue. In particular, there is the point which my noble friend has already mentioned, that disposal cannot be after the three-year provision, under which an ordinary purchase can be passed on, but a 10-year period is inserted.
Secondly, I should like to put to the noble Lord, Lord McIntosh, the difficulty which one faces in the argument that a disabled person can dispose of a house at market price. What is "market price" in these circumstances? Let us suppose there are two houses, one of which can be disposed of entirely freely without limitation or restriction after three years, but the other house can only be disposed of to a limited category of people, either another disabled person or the local authority. Surely in any ordinary sense of the term the market price of the house subject to that limitation is a good deal lower than that of the house which can be freely disposed of to any purchaser. Anyone who has studied the housing market, or any other market, can have no doubts about that.
Therefore, if your Lordships accept the amendment, though the disabled will be able to purchase their homes, they or their successors will not be able ultimately to dispose of the home at the same price to those who are not disabled. That seems to me to go against the decision which, after a good deal of agonising, we made. Many of us were very worried about which way the earlier decision should go. One is forced to the conclusion, however well intentioned, that the noble Lord's amendment quite substantially goes back on the decision that the disabled should not be discriminated against. It introduces some discrimination but not anything like as much as there used to be. For that reason I am against the amendment.
Lord Tordoff: My Lords, although it is probably true to say that the amendment is flawed, I do not think it is flawed for the reasons that the noble Lord, Lord Boyd-Carpenter, has adduced. It seems to me
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that it is possible for a local authority to repurchase a house at a market price. There are many mechanisms for doing that. District valuers can produce figures which are perfectly equitable so that somebody disposing of a house in such admittedly restricted situations may still he able to obtain the price that they would have obtained if the house were on the open market. It is no good the noble Lord shaking his head because it is perfectly possible to do that.
Lord Boyd-Carpenter: My Lords, I put it to the noble Lord that a house which can be disposed of to anybody must receive a higher market price than a house that can only be disposed of, albeit otherwise a similar house, to a limited category of people. In other words, the phrase "market price" has no meaning whatsoever.
Lord Tordoff: My Lords, the fact is that where compulsory purchase is carried out by local authorities this is a perfectly normal situation. It is possible to achieve a market price in these circumstances.
I think the amendment may be flawed. It is a very complex amendment and is difficult to draft suitably, but we must try to bear on this enormous problem with which we are faced in the dilemma to which the noble Lord, Lord Boyd-Carpenter, has rightly referred. We were forced to choose the other night—I have to say that I voted against the noble Lord. Lord Swinfen, and advised my colleagues to do the same—not because we wished to discriminate against the disabled, very far from it, but because the danger of going down that road was that adapted housing would disappear from local authorities.
How local authorities can be expected to adapt housing which they know will disappear from their stock on a regular basis is beyond me. This is a mechanism whereby the local authorities can retain adapted housing within their stock. Therefore, without discriminating against the right of disabled people to buy council houses and resell them, this mechanism allows them to retain that right and the local authority to maintain a stock.
I am not sure that this is the right way of achieving it but I hope that the Government will understand that this is a possible mechanism for getting us out of that dilemma. In that sense I support the principle of the amendment.
Lord Trafford: My Lords, when debating a similar amendment last week I did not agree on the grounds that we would reduce the adapted housing stock and discriminate against those who did not have housing for the disabled.
I understand why the Front Bench opposite has suddenly jumped on the bandwagon of the amendment. It is because they would like to give back the housing stock to local authorities after it has been used by the disabled person who bought it. That will increase the stock of available housing for the disabled, for those who have become disabled in the meantime or who are on the waiting list.

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I appreciate and understand that, but two issues make me feel differently about this amendment. However one looks at the matter, it is a form of discrimination. It limits the right of sale for the disabled person. Last week we took a clear decision with which I then did not agree. This House took the decision not to discriminate against the disabled in this respect and I believe that the matter should have been left there. The amendment is too complicated and it partially discriminates.
I accept what was said by my noble friend Lord Boyd-Carpenter. It is extremely difficult to create a market price when there is no market. If one has thousands of people to whom one can sell a product one automatically has a price mechanism and market. I shall not go further than to say that it is more difficult. There are mechanisms. However, I do not like the example used by the noble Lord of the compulsory purchase order. My experience of those whose property has been compulsorily purchased is that they think they have been done. I do not believe that it is the equivalent of a market price.
I fully understand and in many ways sympathise with the intentions behind the noble Lord's amendment. However, I do not believe that it is the right way forward and I regret that I must oppose the amendment.
The Earl of Lytton: My Lords, I hesitate to step into the debate but there has been a great deal of discussion about market price and other matters concerned with property valuation. I thoroughly endorse the comments made by the noble Lord, Lord Boyd-Carpenter, and I should like to go one step further. If we are talking about a property with a fairly, high cost input and one which has an open market value restricted as it must be by straight-forward interpretation of the legal parameters on the one hand and the extent of the market place on the other, that will produce a conflict and an unnecessary complication. It is outside the present processes of valuation for such a purpose, as I understand it. I see great difficulties arising.
The proposal put forward by the noble Lord, Lord Carter, sets out to impose by statute a restriction which I believe is already covered to a large extent in the planning occupancy restrictions already imposed by local planning authorities. He cited the example of agricultural dwelling houses. From that point of view it is unnecessary, particularly as it would take outside the orbit of local control and local decision-making process the future of such premises, which may change over a period of time. The perception of the property may alter because of town centre redevelopment or because of whatever may happen during the passage of time.
Lord Carter: My Lords, will the noble Earl give way? He cited the analogy that I drew with agricultural property. Is he saying that he will be happy if all housing which is specially designed or adapted for disabled people has the planning restriction that we have in agriculture and that it can be occupied only by disabled people? If that were the case I should be extremely happy to accept it.
6.15 p.m.
The Earl of Lytton: My Lords, that is an issue which must be dealt with by the local planning authority. If in its wisdom it gives consent for property for a specific purpose it is up to the authority to enforce that. We have a well-established procedure in planning law for dealing with that. It is not for me to say that all properties which are adapted or constructed for disabled persons should be subject to that restriction, any more than I am saying that every property built in the open countryside should be subject to an agricultural restriction. I made no further comment but I point out that the mechanism exists.
The loss of the stock of houses to disabled people has been raised. I fail to understand why it is that when a disabled person purchases a house or flat from the council and remains living in it, it somehow ceases at a stroke to be a property which is adapted for use and beneficial occupation by disabled persons. Clearly it is not. It remains in the occupation of that person—
Lord Tordoff: My Lords, will the noble Earl give way? The point is not the present occupancy but the next generation of occupancy. When the disabled person dies or moves on the property then moves out of the occupancy of a disabled person to a second generation of the family, or right outside.
The Earl of Lytton: My Lords, the noble Lord is quite correct. However, that causes speculation as to the time-scale over which the first purchaser will remain in beneficial occupation. That may be a matter of 10, 20 or 30 years, or it may be a relatively short time. We are dealing with a small market place, a point already touched on by the noble Lord, Lord Boyd-Carpenter. We have a net deficit of suitable properties available for disabled people. The noble Lord, Lord Swinfen, touched on that issue. I support him in his assertion that we need more such properties and that that is the real solution to the problem.
The degree of adaption of such properties that I have experienced—I shall not say that it is great—is not such as to make the building a wholly different type. It still has 8-feet high ceilings and 11-inch cavity walls. I believe that the degree of adaptation that is found in practice is not tremendous except in respect of a building which is constructed for institutional purposes. Therefore it is occupied on a different basis from a property which is occupied by a disabled tenant of a local authority.
I am afraid that I cannot support the amendment put forward by the noble Lord, Lord Carter. However, I echo what has been said by other noble Lords in that I recognise that his motives are well-intentioned.
The Earl of Caithness: My Lords, I understand the concern expressed by the noble Lords, Lord McIntosh and Lord Tordoff, who have spoken in support of the amendment. Having decided that tenants of housing particularly suited for the disabled should no longer be excluded from the right to buy,

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it would he unfortunate to fetter the freedom which those who have purchased can reasonably expect to enjoy and to dispose of the dwellings as they wish.
The amendment tabled by the noble Lord, Lord Carter, would involve a large amount of bureaucracy, difficulty and confusion for those who wish to buy housing specially suitable for the disabled. As my noble friend Lord Swinfen and the noble Earl. Lord Lytton, said, there will firstly be arguments over what features make a dwelling house "substantially different", which would be the test for deciding which dwellings could be sold subject to conditions. My noble friend Lord Swinfen and my noble kinswoman Lady Masham have described eloquently at earlier stages of the Bill the disputes which have arisen on this point in determining which dwellings are excluded from the right to buy. This amendment would perpetuate that.
Once that point had been settled, the local authority would be able to impose a condition on sale that the dwelling could not be resold without its consent. The amendment provides that consent may not be refused if the sale is to a person who is disabled and for whose needs the dwelling is considered suitable. Alternatively, the purchaser might have such a disabled person as a member of the household.
The amendment would allow the landlord to reserve a requirement for his consent to resale. Consent could be refused unless a prospective purchaser was a disabled person or intended to share the house with a disabled person. What would happen if there was no such buyer in the market for the house in the area in question? Households with a disabled member which had bought their homes would find that, when they wanted to move, they either had to find a family with a disabled member to buy it, or go cap in hand to the former landlord for permission to sell to someone else. If there did not happen to be a qualifying purchaser in the market, and the former landlord said "No" to any other prospective buyer, they would be stuck in accommodation which perhaps no longer met the needs of the disabled person.
The amendment also provides that consent could be refused unless the house was considered suitable for the requirements of the new disabled person. Who would be the judge of that? One can readily foresee the disputes which would arise. My noble kinswoman Lady Masham suggested forcefully on Report that the exclusions which your Lordships agreed should be repealed were disciminatory. The arrangements proposed in the amendment would, in my view, be much worse.
The noble Viscount, Lord Ingleby, raised a particular point with me in correspondence about the application of Section 3 of the Chronically Sick and Disabled Persons Act 1970 to housing action trusts. Perhaps this is the opportunity to deal briefly with that point, as we are talking about disabled people. Your Lordships will recall that on Report we introduced an amendment empowering the Secretary of State to apply Section 3 by order. I assure your Lordships that I expect that in all but the most exceptional circumstances my right honourable friend would propose to apply Section 3 in this way.
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The thought which motivated your Lordships' House in deciding to repeal the current exclusions from the right to buy of dwellings for the disabled was the unfairness in not giving those households with a disabled member the right to buy. If it is right, as your Lordships decided, to give them the right to buy as with other tenants, it is surely consistent to give them that right without the unnecessary complications.
Lord Carter: My Lords, I am grateful to all your Lordships who have spoken in this debate. Not everyone who has spoken seems to have completely understood the amendment on the Marshalled List. The points about the district valuer, the market price and the difficulty in obtaining the market price are answered every day by district valuers. I have already been involved professionally in the valuation of a farm tenancy which is owned by a company. There is no buyer or seller but there has to be a valuation for taxation purposes. Planning law on the matter is clear. One assumes a willing buyer and a willing seller. That is how the problem is solved. It happens every day with district valuers in all sorts of capacities.
The idea that one cannot find a market price is not true. The point which the Minister made—and he has been involved professionally in these cases—that it is a restricted market and therefore a price cannot be reached is just not true. The district valuer would be able to fix a price on the basis of a willing buyer and a willing seller.
Lord Jenkin of Roding: My Lords, will the noble Lord give way? I apologise for intervening. If a valuer is seeking to put a value on a property which is itself subject to a continuing restriction, is the noble Lord saying that the valuer will leave that factor out of account when he puts a value on the property? Of course he will not. It is bound to depress the value, and that is the basis of the arguments of a number of noble Lords.
Lord Carter: My Lords, the continuing restriction is that the local authority is buying it back at the going market price to let it to a disabled person. That is the point. The district valuer has to fix a fair price on the basis of a willing buyer and a willing seller; so that can be done.
The Earl of Lytton: My Lords, perhaps the noble Lord will give way. That presupposes that the disabled person, if he is able to sell at a valuation determined by the district valuer at the time when that date comes, has purchased the house at a similarly discounted value in the first place. I was trying to make the point that that leaves us with expensively adapted properties which are being sold at a depressed value subject to that restriction. Can the noble Lord answer that point?
Lord Carter: My Lords, I am not sure that the noble Lord has understood the amendment at all. That is not the case. The amendment makes it extremely clear how the system will work, and I do not propose to repeat it.
Lord Stoddart of Swindon: My Lords, perhaps my noble friend will give way. Although I do not support the noble Lord's amendment, is not the answer in relation to that particular point on valuation that all local authority houses which are sold are valued on the basis which he has just put forward?
Lord Carter: My Lords, I am grateful to my noble friend. I apologise that this is turning into an argument about valuations and not about disabled people. My amendment as tabled was supported by the Royal Association for Disability and Rehabilitation, RADAR. That should be made clear. I do not wish to detain your Lordships. I do not intend to press the amendment to a vote. However, I should say to the noble Lord, Lord Trafford, that to accuse my noble friends on the Front Bench of jumping on the bandwagon was, to say the least, unworthy.
I repeat that there is a waiting list of 18,000 people who wish to rent these adapted houses. This amendment tries to deal with the problem of the restriction of supply. We have already had similar examples with the national parks and areas of outstanding natural beauty and in rural housing. I hope that in future when those who oppose this amendment see a specially designed house which is not being occupied by a disabled person, they will hear in mind their opposition to this amendment which has brought about that situation.
I do not wish to go on. The Minister said that the dwelling will he sold as the owner wishes. That means that the supply of disabled houses to rent will be reduced if the owner is able to sell to whomever he wishes. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 133 [Consent required for certain subsequent disposals]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 32:
Page 104, line 45, at end insert—
("(4A) Before giving any consent required by virtue of this section, the Secretary of State—

(a) shall satisfy himself that the person who is seeking the consent has taken appropriate steps to consult every tenant of any land or house proposed to be disposed of; and

(b) shall have regard to the responses of any such tenants to that consultation.").

On Question, amendment agreed to.
Clause 134 [Consent required for certain subsequent disposals: Scotland]:
The Minister of State, Scottish Office (Lord Sanderson of Bowden)The Minister of State, Scottish Office (Lord Sanderson of Bowden) moved Amendment No. 33:
Page 106, line 5, at end insert—
("( ) Before giving any consent for the purposes of subsection (1) above, the Secretary of State—

(a) shall satisfy himself that the person who is seeking the consent has taken appropriate steps to consult every tenant of any land or house proposed to be disposed of; and

(b) shall have regard to the responses of any such tenants to that consultation.").

The noble Lord said: My Lords, in moving Amendment No. 33 I wish to speak also to
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Amendment No. 55. I believe that these amendments will be welcomed by this House and by local authority tenants in Scotland.
The amendments relate to the Scottish provisions on first subsequent disposals. Amendment No. 55 applies where a house was transferred to a private sector landlord under the tenants' choice provisions in Part III of the Housing (Scotland) Act 1988. Amendment No. 33 applies where property was transferred voluntarily by a local authority, with the approval of the Secretary of State under the powers in Section 12 of the Housing (Scotland) Act 1987 as clarified by Clause 132 of this Bill. The effect of these amendments will be that tenants will have to be consulted by their new landlord before he seeks approval to dispose of the property. Where tenants express views, the Secretary of State, or Scottish Homes as appropriate, will require to take these into account before giving consent to the proposed further transfer.
We are therefore building into the procedures for both tenants' choice and voluntary disposals a second safeguard for tenants. As noble Lords know, no tenants' choice initial transfers in Scotland can take place without the individual tenant's agreement; and we have already introduced into this Bill, at Clause 135, a requirement that tenants be consulted fully before any voluntary disposal takes place. By bringing forward these amendments today, we are ensuring that tenants will be consulted also if and when the new landlord wishes to seek approval in some way to dispose of the property.
These amendments will ensure that there will be no reason for doubt on how landlords should discharge their responsibilities to their tenants. The House has already considered and agreed similar amendments under which tenants will require to be consulted before first subsequent disposals in England and Wales. I believe the House wishes to see this further strengthening of tenants' rights also for Scotland. I therefore commend these amendments to the House. I beg to move.
6.30 p.m.
Lord Carmichael of Kelvingrove: My Lords, I am grateful to the Minister for these amendments and I thank him also for giving me some background notes. There is no doubt that he has gone some way towards what we were suggesting in earlier stages of the Bill, and for that everyone will he happy.
Clearly the tenant will nevertheless lose what was originally a secure assured tenancy, but in the circumstances and knowing the Government's general thrust in the Bill I must be grateful to the Minister for what he has conceded.
On Question, amendment agreed to.
Schedule 1 [Tenancies which cannot be assured tenancies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 34:
Page 111, line 22, leave out from ("association") to ("or") in line 23.
On Question, amendment agreed to.
Schedule 2 [Grounds for possession of dwelling-houses let on assured tenancies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 35:
Page 116, line 11, at end insert ("and
(c) the assured tenancy on which the dwelling-house is let did not come into being by virtue of any provision of Schedule 1 to the Rent Act 1977, as amended by Part I of Schedule 4 to this Act or, as the case may be, section 4 of the Rent (Agriculture) Act 1976, as amended by Part II of that Schedule.").
The noble Earl said: My Lords, this amendment arises from a point raised on Report by the noble Lord, Lord McIntosh of Haringey. It is of course our intention that the development ground for possession should not be used where the landlord purchases the property with a sitting tenant. It will apply only in respect of tenancies granted subsequent to the purchase.
However, the successor to a Rent Act tenant could be granted a new-style assured tenancy which would be a new tenancy but springs from an existing Rent Act tenancy. It would not be right for the landlord to be able to avail himself of this ground in such a case, and this amendment makes clear that he will not be able to do so. I am grateful to the noble Lord, Lord McIntosh, for drawing this point to my attention and I hope that as a result he will welcome the amendment. I beg to move.
Lord McIntosh of Haringey: My Lords, I am grateful to the Minister for introducing this amendment and for the terms in which he introduced it. When we put forward this point our intention was that all assured tenants who are sitting tenants at the time the developer buys the property should be covered. I think and hope that that is what this amendment means, but before I shout "Content" I should he grateful if the Minister would confirm that.
The Earl of Caithness: My Lords, I do not think the amendment means exactly what the noble Lord, Lord McIntosh, asked me to confirm. Perhaps he would be good enough to read what I said in the Official Report. I realise that this is the last stage of the Bill in this House and it therefore makes it more difficult for him to do so. The amendment covers the main point that he made earlier but I do not think it goes as far as he has now asked me to go.
On Question, amendment agreed to.
[Amendments Nos. 36 to 42 not moved.]
Schedule 4 [Statutory tenants: succession]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 43:
Page 122, line 38, after ("years") insert ("or I year in the case of a person who has been making a substantial contribution in money or money's worth towards the reasonable needs of the tenant").
The noble Lord said: My Lords, I hope the noble Lord, Lord Boyd-Carpenter, will agree that this is an appropriate amendment for Third Reading. Although we are returning to the issue of the succession rights of carers we are doing so in what I believe is a preferable way to our approach in earlier stages.
Noble Lords who were present will recall that we suggested there should be a shorter period of time in which relatives who are looking after tenants need he resident, performing their caring functions, before they are protected in the right of succession to the tenancy. It was pointed out to us that many of these relatives who move in might not be carers and that it might be a way of ensuring a succession which was contrary to the Government's intentions in the Bill, thus frustrating the free market mechanisms which the Government wish to achieve, because the definition of carers was too vague.
We come back with a definition from the Inheritance (Provisions of Family and Dependants) Act 1975, which is someone making a substantial contribution in money or money's worth. I understand that the phrase "money's worth" means care towards the reasonable needs of the tenant. I hope that will overcome this major and reasonable objection to the amendments we put forward earlier.
We are now saying that a genuine carer—a relative who moves in with the tenant, looks after the tenant, helps financially or with the caring—has to be in that position for only one year before he or she has the right to the succession. It is a limited provision and these will not be millions of cases, but it is of deep concern to those who happen to be affected in that way. After all, there are many council tenants who need the support of their children in their declining years to enable them to stay at home rather than go into institutions. I suggest that the amendment is therefore very much in line with government thinking about care in the community.
We are proposing a modest change which will help care in the community and perhaps stop unnecessary and undesirable commitment to institutions, particularly of older people. We all agree that aim is desirable. I hope we have found a way of achieving it by framing these amendments. I beg to move.
The Earl of Caithness: My Lords, alas, the noble Lord has not, and for this reason. The amendment as drafted does not cover just those people the noble Lord wanted to cover—the carers he so eloquently described. Unfortunately, it also covers any qualifying family member who moves in with the tenant and makes a contribution to his or her living expenses. Indeed, the amendment goes so wide as to cover cases where the tenant is hale, young and healthy, as well as cases where the tenant is infirm and in need of attention. Although I appreciate what the noble Lord is seeking to do for carers, the amendments go very much wider and include many other cases.
Lord McIntosh of Haringey: My Lords, I am bound to yield to the greater knowledge of the Minister's parliamentary draftsmen. I am sorry that we have failed in our objectives. However, since the Minister appeared to rely on our drafting failure in his opposition to the amendment perhaps we can persuade him to draft a better amendment for consideration in another place.
The Earl of Caithness: My Lords, with the leave of the House, I do not think it is within my remit to

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suggest what the other place should do. It is strictly controlled on consideration of amendments by this House and it could be difficult for the other place to add to the Bill.
I reassure the House that we are of course concerned with provision for carers. As the noble Lord, Lord McIntosh, rightly said, it fits in with our wider policy of care in the community.
Lord McIntosh of Haringey: My Lords, I understand that the Minister cannot intervene in the procedures of another place. However, he is the Minister for Housing and he may have a political influence even if he does not have a direct legislative influence.
May I make a further suggestion? Why does not the Minister accept these amendments and improve the drafting in another place? Well, your Lordships cannot blame me for trying. However, the drafting is defective. I apologise, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 44 to 46 not moved.]
Schedule 5 [Housing for Wales]:
The Earl of Arran The Earl of Arran moved Amendment No. 47:
Page 125, line 12, leave out ("officer") and insert ("executive").
The noble Earl said: My Lords, this amendment is a very minor amendment indeed. It has been tabled to ensure consistency in the references to the chief executive of Housing for Wales in Schedule 5 to the Bill. I beg to move.
Lord McIntosh of Haringey: My Lords, I am deeply suspicious of anything that is called "a very minor amendment indeed".
On Question, amendment agreed to.
Schedule 6 [Amendments of Housing Associations Act I985]:
Lord Carter Lord Carter moved Amendment No. 48:
Page 137, line 53, at end insert—
(" In Schedule 6. paragraph 3(3)(b) shall be omitted.").
The noble Lord said: My Lords, I can assure your Lordships that this amendment will not take as long to deal with as my last amendment. It is an amendment that I know the Government will be able to accept. It is to remove from Schedule 6 to the Housing Associations Act 1985 the disqualification for membership if a member is incapacitated by physical or mental illness. This is a clause we have had removed from the education and the housing Bills. In fact it was the Government that earlier in this Bill moved the amendment to remove the provision from the Housing for Wales constitution. In that light I am sure that the Government will be able to accept the amendment. I beg to move.
The Earl of Arran: My Lords, the noble Lord, Lord Carter, is a little pre-emptive on this matter and he has some reason to be so. Noble Lords will recall that
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at Report stage my noble friend Lord Trefgarne moved an amendment to meet the concern expressed by the noble Lord, Lord Carter, in Committee about the Secretary of State's proposed power to remove members of Housing for Wales and housing action trusts from office on the grounds of physical or mental incapacity. Having now had the opportunity to consider the effect of applying a similar amendment to the constitution of the Housing Corporation we are happy to commend it to your Lordships.
Baroness Masham of Ilton: My Lords, may I ask the Minister whether this measure includes Scotland, too? England and Wales have been mentioned and, being a Scot, I just wondered whether Scotland was included.
The Earl of Arran: My Lords, certainly Wales has been mentioned because I referred to the Principality. We are not absolutely certain whether Scotland is included. I understand that we may bring this matter forward as a Commons amendment.
On Question, amendment agreed to.
Schedule 7 [Housing action trusts: constitution]:
The Earl of Arran The Earl of Arran moved Amendment No. 49:
Page 138, line 45, at end insert—
(" and with that approval the Secretary of State may undertake to meet any liabilities arising in respect of such pensions, allowances or gratuities after the dissolution of the trust").
On Question, amendment agreed to.
The Earl of Arran The Earl of Arran moved Amendment No. 50:
Page 139, line 21, at end insert—
("and with the approval of the Treasury the Secretary of State may undertake to meet any liabilities arising in respect of such pensions, allowances or gratuities after the dissolution of the trust").
On Question, amendment agreed to.
6.45 p.m.
Schedule 13 [Amendments of Landlord and Tenant Act I987]:
Lord Coleraine Lord Coleraine moved Amendment No. 51:
Page 164. line 40, leave out paragraph 5 and insert—
("5 In Part IV of that Act (variation of leases), in section 35 omit subsections (6) and (7)").
The noble Lord said: My Lords, in moving this amendment I speak also to Amendment No. 52, which is a fall-back, second-best amendment to my first amendment, and cannot be moved if the first amendment is accepted.
Schedule 13 to the Housing Bill, as your Lordships will know, amends the Landlord and Tenant Act 1987 in a number of ways. That Act enacted some of the recommendations of the Nugee Committee report on the Management of Privately Owned Blocks of Flats. My amendment relates only to those parts of the Landlord and Tenant Act that deal with variation of defective leases. Schedule 13 to the Bill was inserted by an amendment moved by my noble friend the Minister at Report. It came as the result of

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pressure from the Law Society and also followed an amendment that I had moved at Committee but withdrew when I learned that my noble friend intended himself to legislate.
While I welcomed the schedule at Report I expressed reservations and some concern about the matters dealt with in these two amendments. I have had a letter today from my noble friend dealing with the points that I made at Report and, while I accept that his points are good, I consider that the points I have to make are better.
I believe that I can best explain these amendments by asking your Lordships to envisage a block of eight flats, all let on long leases. Flat 1 is a normal residential flat. Flat 2 is also a normal residential flat, but it contains computer terminals at which the lessee sits and runs his business. Flats 3, 4 and 5 are let by one long lease to one lessee. Flat 3 is lived in by the lessee; flat 4 by his mother and flat 5 may be sub-let on another long lease or it may be let to an American company for six months.
Flats 6, 7 and 8 were originally let by three separate long leases, but these leases are now owned by one person. I do not feel that I need to detail what subleases may derive from them. On the street floor, also belonging to the freeholder, are a tobacconist's shop and a hairdresser's. These premises were let on long leases but I am glad to be able to say that, because they are not flats as defined in the Act, their leases fall together outside the Act, and neither of my amendments will apply to them.
The freeholder manages and repairs the building and the various leases make provision enabling him to recoup his expenses from the leases. The leases are in a standard form, but the percentages of expense incurred by the landlord and recoverable under the leases add up not to 100 per cent. of the total expense incurred, but to 120 per cent. of the total expense. Section 35(4) of the Act deals exactly with this situation and provides that such leases are defective for the purposes of the Act and may be subject to an application for variation by the tenants. Unfortunately, in my opinion on a lessee's application to vary these leases, and if Schedule 13 is not amended, the court will only be able to vary the lease of flat 1.
The lease of flat 2 would not be variable because Section 35(7) of the Act provides that in general the variation of lease provisions do not apply to tenancies to which Part II of the Landlord and Tenant Act 1954 applies. Section 23 of that Act provides that Part II is to apply,
"to any tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and so occupied l'or the purposes of a business carried on by him or for those and other purposes".
That would cover the high-technology business run in a corner of the dining room or indeed anyone who works from home; he would be unable to apply to vary his lease.
The lease of flats, 3, 4 and 5 is not variable because Section 35(6) of the Landlord and Tenant Act 1987 provides that a long lease is not to be regarded as a long lease where the demised premises consist of or include,
"the flat and one or more other flats".
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It would have been possible for the lessee to apply to vary the leases of flats 6, 7 and 8, but Schedule 13 is intended to put an end to this. It would do so, moreover, in such a way as to preserve the right of the freeholder to apply for a variation while precluding the lessee from doing so. This appears to me to he grossly inequitable and the kind of bias between landlord and tenant which only promotes bad feeling and which should not be in any legislation.
My second amendment, which I consider a second best, simply seeks to put back the law as regards flats 6, 7 and 8 to what it was before the recent amendment incorporating Schedule 13 into the Bill.
If my noble friend will recommend acceptance of the first amendment, and the House agrees to it, that will cover also the situation envisaged by the second amendment. The first amendment does away with the restricted definition of "long lease" and all unnecessary restrictions on applications to vary defective leases. Where there is a long lease of a flat or flats, and that lease is defective, either the landlord or the tenant would, under the amendment, be entitled to apply for a variation. There seems to be no reason in principle why any defective long lease of a flat should not be made subject to an application to vary, and I say this, and move the amendment, in the genuine hope of improving the operating systems of the 1987 Act, notwithstanding in my personal opinion that the substantive parts are sadly flawed. I would mention that the exclusion of seven of the eight flats to which I have referred from the right to vary provisions does not follow from anything recommended in the Nugee Report.
I hope that my noble friend, with all his practical experience of the subject, will see the difficulties I have outlined and will be able to recommend acceptance of the amendment. I beg to move.
The Earl of Caithness: My Lords, I have listened carefully to my noble friend's comments on the procedure for the variation of long leases of flats which was introduced in Part IV of the Landlord and Tenant Act 1987. Our starting point, like that of the Nugee Committee on whose recommendations the 1987 Act was based, was that such a procedure should be primarily for the benefit of the individual residential flat owner, whose amenities and living conditions would suffer if the lease failed to make proper provision for the management of the block.
My noble friend's starting point is somewhat different. He is concerned that there should be a procedure to put right all defective leases in a block irrespective of whether the leaseholder is an individual or someone with a wider interest in the block as a whole.
In Amendment No. 51, my noble friend seeks to remove the provisions in Section 35 of the 1987 Act which exlude leases covering more than a single flat and flats held on business tenancies. This is a very wide-ranging amendment, which would significantly affect the way that the Act would operate, and goes much further than the amendments introduced at Report stage which were intended essentially to tidy up the restriction in the Act as it stood produced by the reference to "common parts". I therefore hope

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that my noble friend, having aired these wider-ranging issues which are obviously of concern, will not seek to press the amendment.
Amendment No. 52 is intended to ensure that a tenant with a series of individual leases of flats is not excluded from the variation procedure. The reasons why we had included this was not simply in the interests of tidiness. There could be situations where an individual tenant subsequently built up an interest in a block by acquiring other leases from the leaseholders. This seemed to us closely akin to the sort of commercial interest in parts of a block which we have sought to exclude from the 1987 Act procedures generally. The effect of Amendment No. 52 would be to widen the availability of the variation procedure by making it available to tenants who had a number of individual leases all of which were defective. Having listened carefully to my noble friend and considered further the points he raised at Report stage, which he developed further in subsequent correspondence, I am happy to accept his argument that applications from the holders of such leases should not he excluded from the procedure, and I recommend to your Lordships acceptance of Amendment No. 52.
Lord Coleraine: My Lords, my noble friend and I do not see synoptically on the general provisions but I am grateful to him for the introduction of Schedule 13. I certainly agree that while the opportunity was here I have tried to extend it a little further than perhaps I could reasonably expect your Lordships to sympathise with. I am grateful to my noble friend for what he said about Amendment No. 52. In the meantime, I beg leave to withdraw Amendment No. 51
Amendment, by leave, withdrawn.
Lord Coleraine Lord Coleraine moved Amendment No. 52:
Page 164, leave out from beginning of line 49 to end of line 4 on page 50.
On Question, amendment agreed to.
Schedule 17 [Minor and consequential amendments]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 53:
Page 190, line 48, leave out ("by") and insert ("to").
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 54:
Page 190, line 48, at end insert—
(" .In Schedule 4 to that Act (tenancies which cannot be assured tenancies) after paragraph II there shall be inserted the following paragraph—
"Accommodation for homeless persons
11A. A tenancy granted expressly on a temporary basis in the fulfilment of a duty imposed on a local authority by Part II of the Housing (Scotland) Act 1987." ").
The noble Lord said: My Lords, noble Lords may recall that at Report stage the House agreed to an amendment excluding from the definition of assured tenancy in England and Wales those tenancies let on a temporary basis by a private sector body, but by
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arrangement with a local authority in discharge of its homelessness duties. That amendment sought to bring the position where an authority uses private sector accommodation into line with that which applies where the authority houses a homeless person temporarily in one of its own houses. This amendment seeks to introduce a similar provision into the corresponding Scottish legislation. It will exclude from the definition of assured tenancies those tenancies expressly let on a temporary basis as part of the authority's homelessness duties. I am sure that this amendment will be welcomed both by local authorities and by private sector landlords which make available accommodation of this type. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 55:
Page 190, line 48, at end insert—
(" In section 63 of that Act (consent for subsequent disposals) after subsection (2) there shall be inserted the following subsection—
"(2A) Before giving any consent for the purpose of subsection (1) above, Scottish Homes—

(a) shall satisfy itself that the person who is seeking the consent has taken appropriate steps to consult the tenant of the house (or, as the case may be, each house) of which the property proposed to be disposed of consists; and

(b) shall have regard to the response of such tenant to that consultation." ").

On Question, amendment agreed to.
7 p.m.
The Earl of Caithness: My Lords, I beg to move, That the Bill do now pass.
Moved, That the Bill do now pass.—(The Earl of Caithness.)
Lord McIntosh of Haringey: My Lords, this is a bad Bill. It bids fair to be five bad Bills. There are five parts of it, all of which are deeply objectionable and are all based on a false analysis of the housing crisis in our society. The assumption is made that our problem is lack of private rented accommodation brought about because private sector landlords do not have a sufficient financial incentive to expand private rented accommodation. From that assumption flow many effects in the Bill, all of which are deeply damaging despite the changes that have been made as the Bill has passed through your Lordships' House.
Part I does two things to help landlords. It increases rents and reduces security of tenure. There is no reference to the fact that this must inevitably lead to an increase in homelessness. Indeed, homelessness is conspicuous by its absence from the Bill. The effect of Part I will be higher rents, more difficulties for people to afford them, greater insecurity of tenure and greater uncertainty in the housing market. This is the result of an economic theory which is beloved of the so-called radical right, but which has been rejected in the past by all sensible governments of all political persuasions.
Part II of the Bill is an attempt to increase the amount of rented accommodation quite artificially by forcing housing associations which do not want to

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be part of the private sector into the private sector. They will have to offer to new tenants—not to the existing tenants—poorer terms of security, poorer terms of succession, and in all probability higher rents as well. That is a statistical way of increasing the private rented sector. It is not a way of providing a single property for rent and it is not a way of increasing the housing stock.
Part III is concerned with housing action trusts. As the Bill has passed through the House, the HATs have been revealed as a gimmick to exploit the general paranoia of the Government in respect of local authorities. It is argued that local authorities are such bad housing managers that everybody will be delighted to get out the worst estates and move to other landlords. Because the Government are unwilling to provide the financial resources to local authorities to actually improve the properties themselves, they will take them away quite undemocratically and parcel them off to other landlords, not even necessarily with the consent of the people living there.
I am glad to say that the House passed an amendment which stated that there shall be a vote on the matter. I sincerely hope that the Government will see the wisdom of that and also see the danger that there would be if the vote were reversed in another place, because tenants in the housing action trust areas have already shown their strong disagreement with the HATs proposals despite the honeyed words which have been expressed to them by Government Ministers both in press releases and in letters to individual tenants.
Part IV of the Bill is another attempt to increase the private rented sector artificially by taking housing away from local authorities and allocating it to approved landlords. If that were simply a matter of breaking up large local authority estates and giving them to housing associations I think that there are many local authorities, of all political persuasions, which would go along with that proposal. But the whole issue has been bedevilled by an undemocratic voting procedure which conscripts the non-voters into the yes lobby and has predictably caused the strongest possible objection among council tenants to what is proposed. Indeed, the Government have not heard the last of those objections, and will certainly not have heard the last of the difficulties which they will face in trying to implement these proposals.
Part V of the Bill deals, among many other matters, with housing benefit. In our view, despite some of the assurances which have been obtained from Ministers, it still contains a risk that the higher rents and lower security will lead to hardship for those who find themselves in need of housing benefit. We hope that we are wrong about that. We have listened with great care to the Minister's words on the matter this afternoon. However, if we are right, we will again see an increase in hardship for those most in need in our society. That is a wrong prescription and the wrong way to go about it.
Although the Bill is altered in many minor ways, it has not been altered in the way we should have liked to see it altered. Therefore it is with a heavy heart that I speak to the Motion that the Bill do now pass.
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I also speak in admiration of the noble Earl, Lord Caithness, for the way he has conducted the Bill through its various stages. He has had a shifting team of colleagues. I did not say "shifty"; I said "shifting". He has deprived of the help of the noble Lord, Lord Hesketh, halfway through the Bill's proceedings. The noble Lord was ably replaced by the noble Earl, Lord Arran. The Minister was also ably assisted on Scottish matters by the noble Lord, Lord Sanderson of Bowden. I should like to express our appreciation of his and their courtesy and consideration at all stages of the Bill's proceedings.
We have disagreed most strongly on some matters. We have had occasion to come to what were very nearly hard words. However, let me assure the Minister that our objection to the Bill concerns the Government's policies and not the advocacy of the noble Earl and his colleagues. We are grateful to them and to all those who have taken part in the debates. We are also grateful to the staff of the House who have assisted us, often until late into the evening, as the Bill has progressed through your Lordships' House.
Lord Tordoff: My Lords, perhaps I may begin by offering an apology on behalf of my noble friend Lord Ross of Newport. He has had to attend a longstanding engagement which is associated with a trust for the homeless. I am sure that noble Lords will excuse him on that ground. As we all know, it is a subject which is very close to his heart.
As someone who has only touched on the Bill peripherally, I should like to echo many of the remarks made by the noble Lord, Lord McIntosh of Haringey, especially in relation to the way in which the noble Earl and his colleagues have conducted the Bill in its passage through the House. I endorse everything that was said in that respect. I am especially grateful that one of my amendments was accepted; namely, the extension of the access to personal files, which was a peripheral matter. On that subject, I should like to say that I understand in relation to a question which I raised when I moved the amendment that the Department of the Environment has now started a consultation process in regard to that part of the Bill. I am most grateful for that.
Like the noble Lord, Lord McIntosh, we on these Benches cannot be happy with the Bill. It is a piece of political philosophy with which we totally disagree. That is not to say that one would not like to see a healthy private rented sector, because I think that we certainly would; but not at the expense of the local authority sector which has for many years and in many places provided excellent housing. We know that there have been many problems, but I do not believe that this Bill is the way to go about solving them.
The strange democratic processes, pseudo-democratic processes, which have been brought into play in relation to tenants' ballots are something that I hope we never see repeated in any other Bill. We are extremely worried about the impact of the Bill on homelessness, which like the noble Lord, Lord McIntosh of Haringey, I am sure, will increase as a

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direct result of the Bill. However, I desperately hope that I am wrong in that belief.
Finally, it has been put to me by my noble friend Lord Meston that perhaps the Government ought now to consider some sort of consolidation process for landlord and tenant legislation, because there is an awful lot of it scattered about. I am sure that I shall earn the undying gratitude of the noble and learned Lord, Lord Simon of Glaisdale, for suggesting that the Government might look at the matter with some degree of urgency.
Again, I must say that this is a Bill with which we are not at all happy. However, that in no way restricts our admiration and thanks for the way in which the noble Earl has conducted the Bill through the House.
Lord Boyd-Carpenter: My Lords, unlike the noble Lord, Lord McIntosh, I think that this is a good Bill. I think that it must be a good Bill to have been able to stand up to the bombardment to which it has been subjected, notably by the noble Lord, Lord McIntosh. I hope he will allow me to say that he has shown himself to be the most formidable, skilful and adroit critic of a government that I have heard in either House for a great many years. The fact that the Bill has emerged virtually undamaged, after being dealt with in the way he dealt with it, is perhaps paradoxically an indication that it is a rather good Bill.
At this stage I should like to say just one thing about the Bill. There is a difference of philosophy between noble Lords opposite and noble Lords on this side of the House. I believe—this is based on some experience—that a good deal of the housing problem, especially the shortage of rented accommodation, is a direct consequence of much of the landlord and tenant legislation which has been enacted since the war.
I recall that when some years ago I was a director of a property company—I hope noble Lords opposite will not hold that against me as almost a confession of crime—because of the restrictions imposed we sold the flats and houses which previously we had been renting as a matter of policy because in the interest of our shareholders there was no other course open to us. I suggest to your Lordships that that has been a very widespread tendency as a result of the restrictive aspects of landlord and tenant legislation over the years. Indeed, some of us would have been glad to see the Bill go a bit further in reversing that process.
However, the Bill makes a substantial change and I believe that it will help to increase the amount of accommodation available for rent. It will not be an immediate or dramatic process, but, over the years, it will alter the bias of the system so that it tends to encourage rather than discourage provision of that rented accommodation.
Finally, I join with other noble Lords who have spoken in saying how much I have admired the way that the noble Earl of the Front Bench has conducted this measure. On his fortieth birthday one could wish him perhaps another 40 years of similar hard labour. He is apparently wholly tireless, immensely
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courteous, and with a knowledge of the Bill and of the whole housing problem which is quite remarkable. I think he has deeply impressed all your Lordships on both sides of the House.
Therefore, I should like to give the Bill my best wishes for its going into effect and for effecting the good which all of your Lordships in all parts of the House want to see in the infinitely difficult and delicate subject of the accommodation problem in our country. I hope and believe that it will make its contribution.
Lord Swinfen: My Lords, I should like to take this opportunity to thank my noble friend, not only personally but also on behalf of his noble kinswoman, for the courtesy that he has shown both of us in discussions on the right to buy between Committee and Report stages. My noble friend Lord Ingleby has also asked me to pass on his thanks for the words that the noble Earl had to say on the working of the Chronically Sick and Disabled Persons Act in relation to this Bill.
7.15 p.m.
The Earl of Caithness: My Lords, when on 11 th July the Bill, already heavily amended in another place, had its Second Reading in your Lordships' House, I pointed out that it represented the Government's measured response to the need for change in the rented housing market. I said that our central aims were to stimulate choice and competition in a vital area of housing which has for decades been in decline and, wherever possible, to involve the private sector in meeting housing needs. I believe that these central aims of our policy have been endorsed during the detailed scrutiny that the Bill has undergone in this House. But I also believe the Bill represents a better balanced and more comprehensive set of measures than it did when we began our consideration nearly four months ago.
I am grateful to all your Lordships for the constructive approach that has generally been adopted during the passage of the Bill. At Second Reading I did of course outline a number of the major changes to the Bill to be made in your Lordships' House. I also observed that some of your Lordships might have new proposals and that we would certainly listen carefully to any positive ideas put forward. I am sure noble Lords would agree that that is just what we have done. Excluding Second Reading, there have been around 60 hours of debate over 11 days, including today, with over 20 Divisions. Over 700 amendments have been tabled, of which about 300 have been accepted by your Lordships. We have examined the Bill thoroughly but have still managed to retain our traditionally courteous approach to business. Because we on the Government Bench have been willing to listen to your Lordships' views, and because of the constructive nature of much of the debate, we have been able to move or support almost all the amendments made to the Bill.
It is perhaps worth highlighting some of these. There are the changes to the provisions relating to compensation for illegal eviction, on which I was able to respond to concerns expressed by my noble friend

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Lord Jenkin of Roding among others. The courts are now being given the power to mitigate the damages in certain limited circumstances, including where a tenant has seriously misbehaved towards the landlord before the eviction. I was also pleased to be able to respond to concerns expressed by the noble Lord, Lord Meston, by changing the date of liability for damages, to remove liability where a tenant is reinstated before the court case is concluded, and to exclude bare tenancies and licences from the requirement for a court order. We were grateful to my noble friend Lord Coleraine for his amendments clarifying the definition of actions constituting unlawful eviction.
It is also worth highlighting that we have imposed controls on further disposals of property transferred under housing action trust, tenants' choice or large-scale voluntary transfer arrangements; and, in response to concerns expressed by the noble Lord, Lord Graham of Edmonton, at Report, we are requiring tenants to be consulted before such disposals can be made. We have also protected management co-operatives under the tenants' choice arrangements.
There is probably no need to remind your Lordships that we have accepted quite a number of amendments from the noble Lord, Lord McIntosh of Haringey, or have tabled amendments in response to his concerns. We have, for instance, made clear that a landlord must give particulars of his grounds for possession in the notice; we have stipulated that an assured tenancy is not to be suitable alternative accommodation merely because it is an assured tenancy; and that the development ground may not be used in the case of a new tenancy granted to an assured tenant who is a Rent Act successor.
We have accepted amendments tabled by the noble Lord, Lord McIntosh, which change the Insolvency Act to prevent bankrupts from losing their tenancies in certain circumstances; allow a court to transfer an assured tenancy to a spouse following a divorce; and give a tenants' choice applicant four weeks instead of two in which to notify his or her objections to a local authority landlord's valuation notice. Perhaps the most significant change on Part IV of the Bill is that, following the suggestion of the noble Lord, Lord McIntosh, made during the lengthy debate in Committee on the voting question, we did, of course, insert a requirement that at least 50 per cent. of eligible tenants must vote in the tenants' choice ballot if an application is to proceed.
Following cogent representations from my noble friend Lord Swinfen, my noble kinswoman Lady Masham and the noble Baroness, Lady Darcy (de Knayth), and others we have allowed properties constructed or adapted for the disabled henceforth to be eligible for the right to buy and tenants' choice. We have been able to respond to concerns expressed by the noble Viscount, Lord Ingleby, the noble Lord, Lord Carter, and others, by excluding disability from the grounds for dismissal from the boards of HATs, the Housing Corporation and Housing for Wales; and we have enabled the Secretary of State to apply Section 3 of the Chronically Sick and Disabled Persons Act to HATs by order. We have accepted
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the amendment of my noble friend Lord Trafford extending the right to buy delay procedure by providing for the three-year discount repayment period to be back-dated. As the noble Lord, Lord Tordoff, said, we accepted his amendment applying the Access to Personal Files Act 1987 to housing action trusts. And, in response to the concerns of my noble friend Lady Faithfull and others, we have specified that the Housing Corporation may appoint local authorities as agents for paying grant.
I think your Lordships have every right to be pleased with the way we have gone about amending the legislation and to be satisfied with most of the results. Perhaps the most obvious area of concern between the noble Lord, Lord McIntosh of Haringey, and myself concerns housing action trusts where again we had tough words to say to each other today. May I just repeat to the noble Lord that we have never intended to mislead, and indeed never have misled anybody. Tenants will have the choice, but there must, as the noble Lord is aware, be a willing landlord. HATs are short term and therefore there cannot be an indefinite tenant veto. Our policy and intentions are clearly on the record.
Unfortunately, because of the major redrafting required, there has not been time to bring forward amendments to Part I of the Landlord and Tenant Act 1954. We had hoped to provide long leaseholders whose leases come to an end with the protection of an assured tenancy under Part I of this Bill rather than a statutory tenancy under the Rent Act. However, as my noble friend Lord Boyd-Carpenter will be pleased to hear, it is still our intention to put these provisions into effect at a suitable legislative opportunity. Meanwhile, long leaseholders whose leases expire after the commencement of this Bill will continue to get statutory tenancies under the Rent Act as at present.
My very special thanks are due to the noble Lord, Lord McIntosh of Haringey. Despite our obvious and fundamental differences in outlook he has led his party with distinction during our very thorough assessment of the Bill. He, together w.th his Front Bench colleagues, the noble Lords, Lord Dean of Beswick and Lord Graham of Edmonton, have yet again helped demonstrate the value of debate in your Lordships' House on such weighty matters of national importance. I do not think that the noble Lord ever ceases to amaze your Lordships with his talent for bringing forward, or delaying, debates to prime time. No one can say that the major issues have not been fully debated. For example, three times we have had major debates on tenants' choice voting procedures.
I am pleased to be able to say that our Bill has been improved in some respects because of the experience that has been brought to bear from the Opposition Benches. I should like to pay tribute to the contribution of all your Lordships who have taken part, and particularly the noble Lord, Lord Ross of Newport, who, we fully understand, is not able to be with us. I should also like to thank all those on the Benches behind me who have taken part, and whom I cannot mention by name because they are so numerous. I should also like to thank my right

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honourable friend the Secretary of State and my predecessor, William Waldergrave, as Minister for Housing, who together did so much to develop the policies in the Bill. My thanks go also to my team of officials, advisers and all those outside the House who approached us about the Bill's provisions.
I take the Bill away from your Lordships' House with an even greater feeling of personal responsibility than when I introduced it to your Lordships. However, I should add that it is in no small part due to your Lordships that I now much better understand the intricacies of the policies involved, even though I remain unaltered in my original views about the underlying wisdom and rationale behind those policies. Only this week we have demonstrated quite forcefully that we are prepared to provide the finance to back up our commitment. The Autumn Statement of my right honourable friend the Chancellor of the Exchequer shows that gross expenditure by the Housing Corporation is planned to rise to £1,328 million by 1991–92. This 80 per cent. increase on the 1988–89 figure is a measure of our commitment.
I therefore remain convinced that we have to tackle the deep-rooted failings in the rented housing market in the thorough-going yet sympathetic way entailed in the Bill. If we do not, we let a rare opportunity slip
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to help solve some of this country's most serious housing problems. I am therefore pleased to be able to say that the Bill leaves your Lordships' House in almost all respects a better Bill than when it arrived. It is a good Bill because of the choice of opportunity that it gives tenants. I beg to move that the Bill do now pass.
On Question, Bill passed, and returned to the Commons with amendments.

Firearms (Amendment) Bill
Returned from the Commons with the amendments agreed to.

Greater Manchester (Light Rapid Transit System) (No. 3) Bill [H.L.]
Reported from the Select Committee with amendments, and recommitted to an Unopposed Bill Committee.
House adjourned at twenty-two minutes past seven o'clock.

  PRISONS: CONSTRUCTION COMPANIES
  PRISONS: CONSTRUCTION COMPANIES
  A3055 MILITARY ROAD, COMPTON DOWN
  A3055 MILITARY ROAD, COMPTON DOWN
  RICHMOND TERRACE: DOOR FURNITURE
  RICHMOND TERRACE: DOOR FURNITURE
  LOCAL AUTHORITY DWELLINGS: FUTURE MANAGEMENT
  LOCAL AUTHORITY DWELLINGS: FUTURE MANAGEMENT
  PIPER ALPHA: FUTURE PROGRAMME
  PIPER ALPHA: FUTURE PROGRAMME
  COMMUNITY LEGISLATION AND BRITISH LAW
  COMMUNITY LEGISLATION AND BRITISH LAW
  EC FEDERATION POLICY
  EC FEDERATION POLICY
  USSR: POLICY ON FAMILY REUNION
  USSR: POLICY ON FAMILY REUNION
  PARAGUAY: PARTIDO LIBERAL RADICAL AUTENTICO
  PARAGUAY: PARTIDO LIBERAL RADICAL AUTENTICO
  COMMUNITY CHARGE REBATES: SCOTLAND
  COMMUNITY CHARGE REBATES: SCOTLAND
  BBC BROADCASTING DIRECTIONS
  BBC BROADCASTING DIRECTIONS
  "HERALD OF FREE ENTERPRISE" INQUEST: PRESS REPORT
  "HERALD OF FREE ENTERPRISE" INQUEST: PRESS REPORT