Sitting of 26 March 1990

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH FILM INSTITUTE SOUTHBANK BILL
  Lords amendments agreed to.
Oral Answers to Questions
  ENERGY

    Offshore Energy Industry
    Mr. Donald Thompson: To ask the Secretary of State for Energy what has been the level of employment in the offshore oil and gas industry in each of the years from 1983 to 1989.
    The Minister of State, Department of Energy (Mr. Peter Morrison): Employment in the offshore oil and gas industry has ranged from 31,300 to 22,300 during the past seven years. It is currently over 30,700—the highest level since 1984.
    Mr. Thompson: While thanking my right hon. Friend for that reply, may I remind him of not only offshore investment, but inshore investment in the oil industry—in valves, heavy engineering equipment and highly technological equipment, in which British engineers lead the world? Will he do all he can to encourage inshore investment, as well as offshore investment?
    Mr. Morrison: My hon. Friend is right. Literally tens of thousands of people are employed onshore in the services and capital goods industries. I am delighted that the numbers employed onshore have increased substantially in the past year.
    Mr. Salmond: Will the Minister explain why his Department today issued such a pathetically weak response to the report of the Select Committee on Energy on Britoil and BP job losses and assets sales? Why was not his Department able at least to agree with the Select Committee that to sack 1,000 people a mere 18 months after apparently promising them job security represented a substantial breach of the spirit of that assurance? Has not the Department of Energy, under Tory control, once again demonstrated that it is not fit to police oil companies independently in the North sea and has no intention of protecting Scottish interests?
    Mr. Morrison: The hon. Member will understand that it was not a weak response in any sense. It responded to the points that he and others made in the Select Committee report, which we welcomed and, by and large, agreed with. Unlike him, I am no interventionist.
    Mr. Moss: Now that offshore employment is at its highest level for six years, thanks to the massive investment in the United Kingdom continental shelf, does my right hon. Friend agree that that is good news for jobs in Scotland?
    Mr. Morrison: It is certainly good news for jobs in Scotland. My hon. Friend points out what some Opposition Members apparently do not want as much as we do.

    Greenpeace
    Mr. Fearn: To ask the Secretary of State for Energy when he last met representatives of Greenpeace; and what matters were discussed.
    The Parliamentary Under-Secretary of State for Energy (Mr. Tony Baldry): My right hon. Friend and I have not met Greenpeace.
    Mr. Fearn: Does the Minister agree that, in that case, more regular meetings are needed with Greenpeace and that, at those metings, the decommissioning of nuclear plants should be discussed, especially those of Sellafield and Springfield which discharge into the River Ribble and the coastline of my constituency at Southport? Does he also agree that the three-mile safety limit should be extended to 15 miles around the nuclear power stations where 3 million people live?
    Mr. Baldry: I am always happy to meet Greenpeace and any other organisations to discuss matters of energy policy. We have made our intentions on nuclear policy perfectly clear. There will be a full review of nuclear policy in 1994. We all look forward with interest to discovering the energy policies of the party that the hon. Gentleman represents. There seems to be some confusion between those in his party who were once members of the alliance.
    Dr. Michael Clark: Will my hon. Friend confirm that he shares Greenpeace's concern for the environment? When he meets Greenpeace, will he find out whether it will acknowledge the cost of the measures it advocates and recognise that those costs have to be passed on to the consumer?
    Mr. Baldry: Yes, my hon. Friend makes a telling point. The comparison does not involve merely economic costs but environmental costs. One of the concerns, which I suspect Greenpeace and many of us have, is what to do about sulphur emissions. As my right hon. Friend the Prime Minister said in an excellent speech to the Royal Society last week, the Government, as part of their policy, are fitting flue gas desulphurisation equipment at the most modern of our coal-fired power stations, Drax in Yorkshire, at a cost of about £600 million for one single site. My right hon. Friend said:
    "retrofitting desulphurisation equipment is not the only way to achieve reductions. Indeed it can create wider environmental damage because it involves mining limestone (sometimes from some of the most beautiful areas of our countryside), the disposing of gypsum waste, and adding something to carbon dioxide emissions and thus to the greenhouse effect. As so often, solving one problem can create or exacerbate others."
    Those costs must be taken into account when determining the best way forward.
    Mr. Barron: Can the Minister explain the present position, because he appears to be switching the arguments weekly? Can he tell us why the Government have allowed the two new generators to slide backwards on the £2 billion programme to fit flue gas desulphurisation equipment to 12,000 GW of electricity generation capacity?
    Is not it the case that the Prime Minister's words of last November—and what Ministers said throughout last year— have now been turned on their head? While Drax is going ahead, the Government have allowed National Power and PowerGen to forgo the rest of the capacity on the basis that the importation of low-sulphur coal, which at best could cut emissions by 50 per cent., is the correct policy to pursue in preference to retrofitting FGD, which would cut emissions by 90 per cent. In its press release on that subject, Greenpeace stated that if the Government allow the new generators to do that, we will rightly be called the dirty man of Europe. How will the Government meet those targets in view of their ratting on last year's agreements?
    Mr. Baldry: The Government are committed to meeting the European Community large plant combustion directive in full and we will do that. I commend the attention of the hon. Gentleman to the most recent edition of the magazine "Power in Europe", which I suspect he reads with interest. It states:
    "In Brussels, European Community officials say the decision does not place the United Kingdom in contravention of Community environmental rules. 'We're concerned with the amount of sulphur in the air and not with how it does —or does not—get there,' said a source close to the European Community Commissioner for the Environment."
    The hon. Gentleman can rest assured that we will meet the European Community large plant combustion directive in full.
    Mr. Aitken: If my hon. Friend would like to keep one step ahead of Greenpeace, would he raise as a matter of urgency the fear expressed about the safety of French nuclear installations? Is he aware that there is a real fear among my constituents who live along the channel coast of a French Chernobyl, because the inspector of French nuclear safety has published a most damning report which states that, within the next 20 years, there is a one in 20 chance of a major nuclear accident in some of France's unsatisfactory nuclear stations, 14 of which are within 30 miles of the English coast? Will he raise that as a matter of urgency?
    Mr. Baldry: If those reports are continuing to cause concern to my hon. Friend and others who have constituencies near his, I will ensure that they have a full explanation of the situation.

    Electricity Imports
    Mr. Eadie: To ask the Secretary of State for Energy what is the current estimate, coal equivalent, of electricity that will be imported from France in 1990; and how much has been imported since the first months of 1990.
    Mr. Baldry: Future imports and exports of electricity will largely depend on commercial decisions by Electricitéde France and on market conditions in England and Wales. I understand that there were virtually no imports in January and February.
    Mr. Eadie: Further to the Minister's answer, does he agree that it is a foolish policy for the Government to depend on energy supplies for this country from a foreign source? If we are so full of the idea that we should have electricity by cable or wire, why do not the Government pursue a policy of using the existing connector between Scotland and England, which has a capacity equivalent to 1·5 million tonnes of coal and, if strengthened, would have a capacity of 3 million tonnes? Why does not the Minister pursue that, as a more sensible energy policy?
    Mr. Baldry: Electricité de France will provide an important source of competition in the United Kingdom electricity market. However, so will Scotland. I understand that, just as there are discussions between the area boards and the French, so too are there discussions between the area boards and the Scottish boards for the import of electricity from Scotland into England and Wales.
    Mr. Hannam: My hon. Friend has underlined the importance of our nuclear industry. What preparations are being made for the vesting of our nuclear stations in Nuclear Electric plc?
    Mr. Baldry: I am glad to be able to tell the House that full drafts of Nuclear Electric's licences have been prepared, and my right hon. Friend the Secretary of State will place copies of them in the Vote Office and in the Library this afternoon.
    Mr. Molyneaux: Given the feasibility of the linkage with France, is there any real technical difficulty in providing a similar link between Scotland and Northern Ireland?
    Mr. Baldry: I am happy to look at that matter and hear the right hon. Gentleman's views on it in greater detail.
    Sir Trevor Skeet: Does the Minister agree that section 32 of the Electricity Act 1989 provides for electricity from France to be part of the non-fossil fuel quota? Does my hon. Friend agree also that, when electricity from France is available, it will be the cheapest in Europe? Does he agree further that, in future, it might be an excellent idea to build a second line across, carrying 2,000 MW?
    Mr. Baldry: The arrangement for French electricity will be outside the non-fossil fuel obligation. However, sales of French imports will not have to pay the levy. Clearly, with electricity supplies to and from Scotland and to and from France, we are anxious to ensure the greatest possible competition for the electricity industry in this country, which must be of benefit to the consumer.

    Coal Contracts
    Mr. Haynes: To ask the Secretary of State for Energy whether he will make it his policy to publish his exchange of correspondence with the member of the European Commission responsible for competition policy regarding the coal contracts agreed between British Coal and National Power and PowerGen.
    The Secretary of State for Energy (Mr. John Wakeham): It has been the policy of successive Governments to treat correspondence with the Commission as confidential.
    Mr. Haynes: What is the Secretary of State doing swanning around in Europe, fixing up contracts for imports of foreign coal, when he stood at the Dispatch Box and promised miners in this country a fair deal? The miners of Nottinghamshire will not be very pleased with him; nor will the pensioner nor the consumer. Let us have the Secretary of State at the Dispatch Box and let us have the information that we require about what he has been doing.
    Mr. Wakeham: The hon. Gentleman is wrong if he thinks that I have been swanning round Europe fixing up coal contracts. Rather the opposite: I have been to Brussels on two occasions to obtain appropriate clearance for the contracts that have been negotiated between British Coal and the generators. I am pleased to inform the House that I do not see any difficulties in that clearance. The size of British Coal's market in the United Kingdom will be limited only by its capacity to supply coal of the required quality and price.
    Mr. Knapman: But does not my right hon. Friend agree that, when the electricity supply industry is privatised, it will at long last be in the interests of the generators to buy cheap rather than dearer coal?
    Mr. Wakeham: It has always been in the interests of generators to buy cheap coal, but they must buy cheap coal that is of the appropriate quality. British Coal is in the best position to supply the bulk of the requirements for British generators.

    Gas and Electricity Prices
    Mr. McFall: To ask the Secretary of State for Energy whether he has made an estimate of the effect that announced changes in domestic gas and electricity prices in April 1990 will have on the retail prices index.
    Mr. Wakeham: It is estimated that the changes in gas and electricity prices will add about 0·4 per cent. to the retail prices index once the tariffs have been fully implemented.
    Mr. McFall: How does the Secretary of State's recent decision to allow electricity prices to rise by more than the rate of inflation square with the Government's long-playing record, which we hear every Tuesday and Thursday at 3.15 pm, by the female lead singer of the "Mid-Staffs Blues Band", called "Bearing Down on Inflation"?
    Mr. Wakeham: I enjoyed the hon. Gentleman's well-rehearsed supplementary question. The increase in the price of electricity which has recently been announced means that, on average, all prices will be increased by less than 6 per cent., which is less than the rate of inflation. Average domestic prices will rise by about 9 per cent., and, on average, customers over 1 MW will get a reduction in price.
    Mr. John Marshall: Will my right hon. Friend confirm that, since privatisation, the real price of gas to the consumer has fallen and that during the last five years of the Labour Government the price of electricity rose by 155 per cent? Does my right hon. Friend agree that that suggests that privatisation rather than nationalisation is the key to consumer satisfaction?
    Mr. Wakeham: My hon. Friend is absolutely right. Under this Government, prices have fallen, whereas they rose substantially under the last Government.
    Mr. Morgan: Nevertheless, does the Secretary of State agree that the price rises that will take effect from next week have emerged as the most extraordinary unprotected rip-off ever to face the British consumer? Will the right hon. Gentleman comment on the letter that I received last weekend from Professor Stephen Littlechild, the regulator of the industry, who stated:
    "I shall have no power to suspend the recent price increases or to impose temporary price increases at a different level."?
    As the price increases that have been announced cannot be commented on by the old electricity consumer consultative councils, which can comment only on this year's prices and which will go out of action on 31 March, and nor can they be commented on by the new statutory electricity consumer committees, will the right hon. Gentleman confirm that nobody can comment on those price increases except himself, the Secretary of State? Does the right hon. Gentleman agree that, in effect, the electricity consumer is being shipwrecked while both lifeboats have been hidden in the boat shed and he has hidden the key?
    Mr. Wakeham: That is not correct. There is nothing that I can do to stop anybody commenting on the price of electricity. If I wanted to do something about it, I should not be able to achieve it. Although the price increase for domestic consumers is slightly above the rate of inflation this year, it will be followed by two years of price stability, which is good for the consumer.

    Nottinghamshire Coalfield
    Mr. Andy Stewart: To ask the Secretary of State for Energy what has been the rate of productivity growth in the Nottinghamshire coalfield.
    Mr. Baldry: Productivity in the Nottinghamshire coalfield rose from 2·9 tonnes per manshift in 1985–86 to 4·64 tonnes in the first 11 months of 1989–90, an increase of 60 per cent.
    Mr. Stewart: The Nottinghamshire mineworkers' productivity record is second to none. Never a week passes without one or another colliery breaking a previous record. All that is due to the skilful negotiations of the Union of Democratic Mineworkers, which has not only increased take-home pay for all miners, but secured the future of the British coal industry into the next century. Therefore, will my hon. Friend accept from me an invitation for our right hon. Friend the Secretary of State for Energy to visit Nottinghamshire and to thank our miners personally?
    Mr. Baldry: My hon. Friend is absolutely right. However, it must be noted that output per man shift has to increase by 10 per cent. across the country if British Coal is to become profitable. From what I have seen of the Nottinghamshire coalfield, I am confident of the spirit and the will, and the skills and the co-operation of the UDM work force there to achieve increases such as my hon. Friend has identified. I know that my right hon. Friend hopes to visit Nottinghamshire, as soon as that can be arranged, to thank the Nottinghamshire work force for what it has achieved.
    Mr. Lofthouse: When the right hon. Gentleman visits Nottingham, will he also tell the UDM and the miners the number of pits that will close over the next five years as a result of the Government's policy and the number that will close because of the new 20 per cent. non-fossil fuel obligation on the electricity generating industry? No witness who has recently given evidence to the Select Committee on Energy has been able to give an estimate of the true cost of nuclear fuel, so can the Minister give us the true cost this afternoon?
    Mr. Baldry: One depressing thing about having energy questions on a Monday is having to face the serried ranks of the Jeremiahs on the Opposition Benches. I draw to the hon. Gentleman's attention the recent statement by the chairman of British Coal, that he does not agree with such gloomy forecasts and that British Coal is determined to ensure that it remains
    "the supplier-of-choice to the new generators".
    The chairman recently described the new contracts as
    "a firm rebuff for the Jeremiahs and their gloomy forecasts for the future of the coal industry."
    He emphasised that
    "scare stories of a further massive contraction of the industry have been seriously over-stated."
    8
    I am sorry to note that the hon. Gentleman is among the Jeremiahs who wish to do down that industry.
    Mr. Ian Bruce: Does my hon. Friend agree that we need the productivity from all the other miners to keep up with that of the Nottinghamshire miners, so that the CEGB and its successors can be kept to the commitment to keep electricity prices down, because coal prices will be set at a steady rate? Might not we then be able to export electricity to France and use British coal in so doing?
    Mr. Baldry: The Government have demonstrated their commitment to our coal industry, not least by the passing last week of the Coal Industry Act, which gives British Coal between £5 billion and £7 billion of taxpayers' money to help to clear its overhang of past debts. We wish to see a competitive and profitable coal industry, and that will require all the technology, investment and skills of those working in the coal industry. They have those skills, and with them can achieve further productivity gains.
    Mr. Dobson: If what the Minister says about improved productivity in the Nottinghamshire coalfield is true, why are the Government proposing to stab the Nottinghamshire miners in the back by pushing for the Associated British Ports coal-importing installation at Immingham and supporting both PowerGen and National Power in building not one but two gas-fired power stations at Killingholme, so that even The Daily Telegraph says that, if these imports of coal continue, they will spell the end of the Nottinghamshire coalfield? Is not that a poor way to reward this increased productivity?
    Mr. Baldry: I find it difficult to see as a stab in the back the £2 million every working day that the Government have invested in the coal industry and the between £5 billion and £7 billion that the Government gave to the coal industry at only the end of the last financial year towards its overhang and clearing past debts. It may have escaped the attention of the hon. Gentleman that British Coal has succeeded in securing with the generators coal contracts that will guarantee a stable market and income stream over the next three years.

    Renewable Energy
    Mr. Maples: To ask the Secretary of State for Energy what initiatives his Department is taking to develop commercially viable and environmentally acceptable forms of renewable technology.
    Mr. Peter Morrison: The Government are supporting a major research and development programme aimed at developing commercially viable and environmentally acceptable renewable energy technologies to contribute to future energy supply.
    Mr. Maples: How many such projects are there and to what extent are private sector companies involved in them?
    Mr. Morrison: There are some 300 or so such projects. We hope to see another 60 or 70 come on stream this year. They are very much joint ventures between the public and private sectors.
    Mr. Pike: Does the Minister recognise that, with the privatisation of gas and electricity, measures on renewable sources of energy and environmentally positive moves will

    9
    always come second to the profit motive and market forces? If we are to have positive moves in such a direction, will the Government do much more?
    Mr. Morrison: I remind the hon. Gentleman of the non-fossil fuel obligation. We have had 339 applications under that obligation, which are to be reviewed; that shows that, with the privatisation of electricity, renewables will be encouraged.
    Mr. Barry Field: What reassurance can my right hon. Friend give that our beautiful coastline will not be littered with great big windmill generators under this programme? Having recently refused to endorse such a programme for Tennyson Down, I should not like to see my right hon. Friend become a modern-day Don Quixote.
    Mr. Morrison: That is a blandishment which I find it difficult to resist. The normal planning application procedure will apply, but my hon. Friend makes a fair and reasonable point.

    Nuclear Fusion
    Mr. Geraint Howells: To ask the Secretary of State for Energy if he will make a statement on the possible future application of nuclear fusion technology.
    Mr. Baldry: If successfully developed, fusion would he a new source of electric power. It is too soon to speculate about its prospects.
    Mr. Howells: Does the Minister agree that the development of nuclear fusion technology could bring many benefits to the people if pursued with urgency by the Government?
    Mr. Baldry: It is important to make it clear that the Government already spend about £27 million a year on fusion research with the United Kingdom Atomic Energy Authority, and a further £28 million, through the European Commission, on the Euratom fusion programme.
    Mr. Nicholas Bennett: Will my hon. Friend confirm that there is no truth in the story put out two weeks ago by the hon. Member for Holborn and St. Pancras (Mr. Dobson) that a nuclear power station will be built at Pembroke?
    Mr. Baldry: The four successor companies have been allocated the properties they need for operational reasons. Other properties, such as that at Pembroke, which are not required for current operations, have been divided up to ensure an equitable distribution of assets among the companies. Nuclear Electric has no development plans for Pembroke. The house knows that we have decided that no new stations should be built anywhere by Nuclear Electric until a complete review of nuclear power has been carried out in 1994.
    Mr. Wigley: How much money has been spent on fusion technology since the days of Zeta back in the 1950s? Does the Minister accept that it will be the year 2025 at least before benefits come from this technology, and that the millions of pounds that have been spent on research would have been much better spent on alternative technology, which could now be bringing real benefits?
    Mr. Baldry: It is important to get these matters into context. A proper balance has to be struck, and I believe
    10
    that the Government have arrived at that balance. Even if fusion were shown to be economic and reliable, it is unlikely that a commercial fusion reactor could be running before the middle of the next century.
    Mr. Butler: Does my hon. Friend accept the advice of the leader of the Social and Liberal Democrats that the nuclear industry should be wound up?
    Mr. Baldry: As I said in response to the hon. Member for Southport (Mr. Fearn), I am completely confused—as I suspect many hon. Members are—about the nuclear energy policies of the SLD and its associates in this place. I would welcome their making clear to the House exactly what their policies are for nuclear energy.
    Mr. Dobson: Will the Minister tell the hon. Member for Pembroke (Mr. Bennett) that he should not be too swift in ruling out a nuclear power station at Pembroke? I received a letter from the Secretary of State today stating that Nuclear Electric intends to keep the land at Pembroke until the review of nuclear policy is completed. It would not do that if it were not contemplating building it there.
    Mr. Baldry: As I have made clear, Nuclear Electric has no development plans for Pembroke. We have decided that no new station can be built anywhere by the company until a review has been completed in 1994, and that is how matters stand.

    Offshore Energy Industry
    Mr. Gerald Bowden: To ask the Secretary of State for Energy how many of the wells drilled on the United Kingdom continental shelf have been drilled (a) since 1964 and (b) since 1979.
    Mr. Peter Morrison: Up to 12 February this year a total of 4,190 exploration, appraisal and development wells had been drilled on the United Kingdom continental shelf since 1964, of which 2,886 had been drilled since the beginning of 1979.
    Mr. Bowden: I thank my right hon. Friend for supplying those figures, which demonstrate the success of the Government's energy policy and the climate that has been created for investment and enterprise with these drillings. Do the drillings show that there has been an overall increase in the resources available beyond that which was expected and estimated earlier?
    Mr. Morrison: Due to the considerable number of discoveries made last year, the remaining reserves recoverable—proven plus probable—will have increased by about 10 million tonnes to 1,200 million tonnes.
    Mr. Doran: Despite what the Minister said and the bright prospects for the North sea, will he confirm what last year's Brown Book figures show—that we are still producing more oil than we are finding in the North sea and that our reserves are depleting rapidly?
    Mr. Morrison: I think that I would be right in saying that last year we produced a little less than we discovered. The figures will be announced formally in the Brown Book, which will be published in April.

    Gas Tariffs
    Mr. Rost: To ask the Secretary of State for Energy when he next expects to meet the Director General of Ofgas to discuss British Gas tariffs.
    Mr. Peter Morrison: My right hon. Friend and I meet the Director General of Gas Supply from time to time to discuss a range of issues of mutual interest.
    Mr. Rost: I congratulate British Gas on its more competitive tariffs for industrial and commercial consumers in response to complaints from them. Will my right hon. Friend discuss with Ofgas the remaining serious problem for users of fewer than 25,000 therms? There is an incentive to waste gas because it benefits a user burning 22,000 therms to burn 25,000 or more as he would then pay less. Is not that a breach of the Gas Act 1986 and the licence? Should not there be a smoother banding and a lower threshold so that that ridiculous anomaly can be ended?
    Mr. Morrison: I do not believe that it is a breach of the Gas Act. We have discussed the matter with the Director General of Ofgas who is having further discussions with British Gas. My hon. Friend's point is perfectly fair.
    Mr. Jessel: Should not British Gas be warmly commended for its sponsorship of the arts, such as the concert at Hampton Court palace last September for charity—which you, Mr. Speaker, were kind enough to attend?
    Mr. Morrison: Yes, and I hope that you enjoyed the concert, Mr. Speaker. It would be only fair to say that the entire energy industry should be commended for its sponsorship of the arts.

    British Coal
    Mr. O'Brien: To ask the Secretary of State for Energy when he last met the chairman of British Coal; and what was discussed.
    Mr. Wakeham: I meet the chairman of British Coal regularly to discuss all aspects of the coal industry.
    Mr. O'Brien: During the right hon. Gentleman's latest discussions, did the chairman of British Coal outline the concern of people working in the mining industry and those in the mining communities about the 30 per cent. increase in electricity prices between April 1988 and 1990, with further increases to come? Those increases have occurred despite the fact that coal prices have remained the same or, in some cases, even been reduced. Is not the only purpose of such increases to fatten the bottom line of the CEGB's accounts? Is not that screwing the miners, the old people and the domestic customers? When will the Secretary of State ensure that customers, including the miners who produce the coal, obtain a fair deal?
    Mr. Wakeham: I did not discuss that matter with the chairman of British Coal, but I did discuss the advantages for the coal industry of the passing of the Coal Industry Act 1990, which provides £5 billion to £7 billion of grant that will enable the coal industry accounts to be cleared of the hangover of past debts and will provide a good basis for the future. In addition, British Coal has secured a
    12
    three-year contract with the generating industry at prices which, I hope, will enable it to be the supplier of first choice in the long term.
    Mr. Hind: Does my right hon. Friend agree that the contracts between the electricity industry and British Coal are an extremely good deal for British Coal? Will he convey that view to its chairman? Does he—
    Mr. Speaker: Order. One question please—that is only fair.
    Mr. Wakeham: It is a good contract for British Coal and for the generators. The important matter is that it is still a tough contract for British Coal. Although it has made great strides—productivity is up by more than 75 per cent. on pre-strike levels—further productivity gains are essential. I believe that the industry has the technology, investment and skills to achieve that.
    Mr. Hardy: Does the Secretary of State accept that the chairman of British Coal should have told him that the pursuit of international supplies of low-sulphur coal could be a wild goose chase? Will he explain to the chairman of British Coal the precise nature of the mathematical formula which The Daily Telegraph told the world the right hon. Gentleman was capable of explaining to the House and the public?
    Mr. Wakeham: The answer to the mathematical formula is 10·6 per cent.—the fossil fuel levy.
    Mr. Cummings: Is the Secretary of State aware of the chairman's recent remark that the north-east area is the jewel in the crown of British Coal? In view of that, does he agree that it is time to embark on a massive programme to fit flue gas desulpurisation equipment to make the importation of low-sulphur coal unnecessary?
    Mr. Wakeham: I will not discuss which area of British Coal's activities is the jewel. There are many hardworking and highly skilful miners all over the country. I have nothing further to add to what my hon. Friend the Under-Secretary of State said recently about FGD. We are committed to the European directive. It is clearly laid down and we shall ensure that it is achieved. British generating companies are considering their plans for how best to implement it. My view is that they will implement it partly by fitting FGD, partly by switching to some new stations for gas burn and partly by importing low-sulphur coal.

  THE ARTS

    Public Buildings
    Mr. Gerald Bowden: To ask the Minister for the Arts what plans he has to improve the fabric of buildings under his control by the year 2000.
    The Minister for the Arts (Mr. Richard Luce): As I announced at the Museums Association centenary conference in September 1989, one of the major challenges that I have set is to get the national museums and gallery buildings for which I am responsible into good shape by the end of the 1990s.
    Mr. Bowden: In welcoming my right hon. Friend's statement about museums and galleries, may I ask him to consider the plight of other great public buildings,

    13
    cathedrals? Although they are not within his precise remit, they are often beyond the scope and resources of their deans and chapters. Would not it be a good idea to put them in order to face the next 1,000 years?
    Mr. Luce: As my hon. Friend says, cathedrals are not my direct responsibility. I have noticed throughout the country several appeals for cathedrals which are meeting considerable success. With regard to my direct responsibilites, we should do our best to get our national institutions, galleries and museums into good shape. I am glad that, on top of the Government's additional £180 million in the next three years, Lord Wolfson and his foundation have agreed to provide £12 million over the next three years to help the renovation of our great museums and galleries.
    Mr. Jopling: Does my right hon. Friend recall that there are only 35 known paintings by Vermeer of which two have been stolen in the recent past, following last week's Boston art theft? Will he carry out urgent checks on the four buildings in this country where there are paintings by Jan Vermeer so that those incomparble paintings are not put at risk?
    Mr. Luce: I note my right hon. Friend's comments carefully and I shall certainly look seriously at the matter. The restitution of stolen works of art is a serious problem. I am considering it against the background of the review of export controls for works of art in 1992.
    Mr. Fisher: I warmly welcome the generosity of Lord Wolfson and the Minister's response to it, but does not Lord Wolfson require that his gift be disbursed within three years? How can local authorities respond to initiatives about local museums when the Government have bound them hand and foot with penalties, the poll tax and this week, if we are to believe it, charge capping? What advice will the Minister give local authorities which want to respond to and participate in Lord Wolfson's generosity but cannot because of the Government's policies?
    Mr. Luce: I am glad that the hon. Gentleman welcomes the new improvement fund for the fabric of museums. He is right to suggest that they apply to local museums and galleries as well as to national institutions. That is an important development. Together the Government and Lord Wolfson's foundation have earmarked £12 million for the next three years with an option to continue for a further two years with additional money. That money can be committed over a timespan which is agreed among the institutions, the local authorities and the private sector, which I hope will play a positive role.

    Private Patronage
    Mr. Butler: To ask the Minister for the Arts what is his latest assessment of the contribution of private patronage to the arts.
    Mr. Luce: Precise figures are not available for private donations to the arts, although there have been a number of outstanding acts of generosity such as that of Mr. Tsui to the Victoria and Albert and the Sainsbury family to the National gallery.
    Mr. Butler: Does my right hon. Friend accept that the announcement about gift aid in the Budget could improve funding to the arts in the future?
    Mr. Luce: My hon. Friend is right. The arts world has been asking for a long time that we provide better tax facilities to encourage more individual and corporate giving to the arts. I join my hon. Friend in welcoming most warmly the decision by my right hon. Friend the Chancellor of the Exchequer which will help enormously to encourage the culture of giving and the growing number of individuals and corporations who wish to contribute to the expansion of the arts.
    Mr. Bermingham: Does the Minister agree that at a time when the export of works of art is increasing, he should have a word with the Chancellor of the Exchequer about persuading the Inland Revenue to be more generous in accepting works of art in settlement of inheritance tax?
    Mr. Luce: That is an important point. There is concern to preserve the most important parts of our heritage. I hope that the hon. Gentleman agrees that the acceptance-in-lieu arrangements work extremely well. There is a reserve of £million,in addition to my budget of £2 million, which has been drawn on considerably and is working well, and there are the private treaty sale arrangements. All those measures, together with the work of the National Heritage Memorial Fund, provide considerable sums of money to enable us to preserve our heritage.

    Wilding Report
    Mr. Robert G. Hughes: To ask the Minister for the Arts what representations he has received since his statement on the Wilding report; and if he will make a statement.
    Mr. Luce: I welcome the general support for my statement on the Wilding report.
    Mr. Hughes: Does my right hon. Friend agree that his statement has been widely welcomed in the arts world, because it redefines what everyone knows should have been the case—that the Arts Council lays down the strategy, but most of the work and grant-giving should be done in the regions where people know what is going on and where the excellence is?
    Mr. Luce: I am grateful to my hon. Friend. I am glad that there has been strong support for that decision. As he implies, we should not underestimate the continuing important role of the Arts Council in devising an overall strategy for arts in the United Kingdom and for specific responsibilities, such as innovation, touring and a number of important matters. Its role and its accountability in partnership with regional arts boards will be important.
    Dr. Kim Howells: Does the Minister recognise that the Wilding report has nevertheless generated much worry, especially in craft circles, that the Crafts Council will be merged with the Arts Council in a way that will be detrimental to the specific nature of the pursuits of craftspeople?
    Mr. Luce: When making the announcement about the Wilding report, I made it clear that the Crafts Council will retain its independence. However, to ensure that we do not have duplication of resources, and to benefit craftspeople as much as possible I am asking the regional arts boards and craft units to work closely with the Crafts Council in the years ahead.

    Government Grants
    Mr. Harry Greenway: To ask the Minister for the Arts (a) what Government grants were made to the arts between February 1974 and June 1979, (b) what grants have been made since June 1979; and what was the average annual increase in real terms in each case; and if he will make a statement.
    Mr. Luce: Grants to the arts have risen from £157 million in 1979–80 to £449 million in the current year—an annual average increase in real terms of 3·6 per cent.
    I regret that comparable information about grants in the earlier years is not available, but the total under the Department of Education and Science programme in 1978–79 was £129 million.
    Mr. Greenway: Is not it clear that under this Government, grants to the arts have increased more in real terms than under any previous Government? Does not that show that the Government are paraclete and encourage the arts, and that the Opposition are nothing but a bunch of philistines?
    Mr. Luce: My hon. Friend is absolutely right about our commitment to the arts on behalf of the taxpayer. The fact that, under the new funding arrangements, the Government have decided to increase overall funding for the arts in the next three years by 24 per cent. demonstrates our commitment to the arts. We believe that the taxpayer should underpin the expansion in the arts funding by the private sector.
    Mr. Heffer: What personal representations has the right hon. Gentleman made to people in the private sector? For example, Tate and Lyle has made no contribution to the Tate gallery in Liverpool, although the company made its money in that city. Is not it important that the Government should make representations to that company? I have done so, but without great success. Would not it be a good idea if those who make money in the city of Liverpool made a contribution to the arts there?
    Mr. Luce: As the hon. Gentleman knows, I am keen —obviously he does not oppose it, either—on an effective partnership being developed between the public and the private sectors and on corporations realising the benefit to them of contributing to the community through sponsorship or through donations. I want them to play their part, but they must decide, because they are accountable to their shareholders. I hope that the hon. Gentleman welcomes the decision of my right hon. Friend the Chancellor of the Exchequer to encourage giving through the gift aid arrangements that will be introduced next autumn.

    Towngate Theatre, Basildon
    Mr. Amess: To ask the Minister for the Arts whether he has any plans to visit the Towngate theatre in Basildon.
    Mr. Luce: I have no present plans to do so. I last visited the Towngate theatre in April 1988.
    Mr. Amess: If my right hon. Friend were again to visit the Towngate theatre he would be shocked to learn of its serious financial circumstances due to the gross irresponsibility of the local Labour council, which has
    16
    given an additional £600,000 to the theatre to prevent it from going into liquidation? Does he recognise the anger of my constituents who want to support a viable theatre but who do not regard its financing to that degree as being in any way helpful to Basildon's community charge of £478?
    Mr. Luce: I hear what my hon. Friend says. It was he who welcomed my visit to the theatre when I saw the wide range of facilities that it had to offer. My hon. Friend is absolutely right. The arts world must live within its means. It is for the local authority to decide how much it should give to arts organisations, but at the end of the day it is accountable to the charge payers. It must account for the money that it spends on the arts and other activities.

  CIVIL SERVICE

    Code of Conduct
    Mr. Beith: To ask the Minister for the Civil Service what representations he has received from the Civil Service unions about the proposed new code of conduct.
    The Minister of State, Privy Council Office (Mr. Richard Luce): None, Sir.
    Mr. Beith: Surely the Minister is aware of the First Division Association's representations on behalf of senior civil servants? Will he take careful note of its concern about the unqualified assertion in the new code that the duties of civil servants to the Crown are, for all practical purposes, owed to the Government of the day? When a Minister asks to see the papers of a previous Administration and is told by a civil servant that he cannot have those papers, is not the civil servant showing a duty to the integrity of Government as a whole? Is not that one of several instances where the duty extends beyond that to the Government of the day?
    Mr. Luce: I do not understand the hon. Gentleman's point, but I do not think that there was any broad quarrel in the discussions with the union about the fact that civil servants are, broadly speaking, acountable to the elected Government of the day. That must be right, although one point of discussion with the union was that specific categories of civil servants, including lawyers, are more widely accountable under certain statutory provisions. That is understood. However, no one can undermine the concept that civil servants are accountable to the elected Government of the day.
    Mr. Beaumont-Dark: Does my right hon. Friend accept that when Sir Robin Butler appeared before the Treasury and Civil Service Select Committee I asked him the point blank question whether he thought that the new code made it more difficult for a civil servant to be faithful to his conscience and to the country, and he said, no? The reason for his answer was that a civil servant's duty must be to the Government of the day—not as a slavish follower but because any civil servant must serve the master of the day. If the master changes, his loyalty can change, not because he is a sycophant but because, if he does not carry out the will of the electorate whose will does he carry out?
    Mr. Luce: My hon. Friend is right. It must be constitutionally right that civil servants are responsible to the elected Government. As he implied, if there is a

    17
    problem of conscience, the procedures are clear. The Armstrong guidelines have made it clear since 1987 that a civil servant can appeal first to his permanent secretary and then, if he is not satisfied, to the professional head of the Civil Service. That is the right course to pursue.

    First Division Association
    Mr. Barry Field: To ask the Minister for the Civil Service when he last met representatives of the First Division Association; and what matters were discussed.
    Mr. Luce: I have not done so recently.
    Mr. Field: Did my right hon. Friend read the report in The Times on 19 March of an interview with Sir Robin Butler? Does my right hon. Friend agree that that is another example of the open government that was promised as policy by my right hon. Friend the Prime Minister? Will he confirm that he will consult the First Division Association about the disestablishment of the Church of England now that His Grace the Archbishop of Canterbury has announced his resignation and—
    Mr. Speaker: Order. That is a little wide of Civil Service questions.
    Mr. Field: It is a constitutional reform—
    Mr. Speaker: Perhaps, but one question at a time.
    Mr. Field: It is a constitutional reform, Mr. Speaker, which I think will be very popular.
    Mr. Speaker: It may be, but that has little to do with the First Division Association.
    Mr. Luce: I am most flattered that my hon. Friend considers that I have such a wide range of responsibilities. Having taken a keen interest in the establishment of Government agencies, he will know that it gives scope for much more open government, because the chief executives of those agencies can give evidence to Select Committees if they wish. Through that procedure, performance targets and measurements can be assessed by Parliament.
    Mr. Alan Williams: Does the Minister realise that what he has just said about appeals has long been accepted, but was seriously damaged when the head of the Civil Service admitted that, at Ministers' behest, he had been economical with the truth? That statement did an enormous amount to undermine the integrity of the Civil Service. Does he accept that since then civil servants have, understandably, had great misgivings about what they used to consider a reliable appeals system? Many now believe that they need an outside and impartial point of appeal.
    Mr. Luce: The right hon. Gentleman is entitled to his views. However, I should point out that the procedures that allow civil servants to appeal on matters of conscience—ultimately to the professional head of the Civil Service —have been in operation only since late 1987. I do not believe that it is true that confidence in the professional head of the Civil Service, Sir Robin Butler, has been in any way undermined—it is strong. I consider him an outstanding civil servant, and the vast majority, if not all, of the Civil Service feels the same.

    Civil Service Unions
    Mr. Skinner: To ask the Minister for the Civil Service when he next intends to meet Civil Service trade unions; and if he will make a statement.
    Mr. Luce: I meet the Civil Service unions from time to time to discuss a range of matters.
    Mr. Skinner: Will the Minister confirm that high-ranking civil servants from Oxford and Cambridge have been called upon to change the poll tax regulations about 12 times since the system came into operation? Will he give a guarantee that civil servants will not be called upon to bend the rules in a partisan political fashion to bring about the charge capping of Labour authorities, while finding a method by which to leave out Tory authorities? Will he also guarantee that the complaints procedure will be adequate for people to make the appropriate appeals?
    Mr. Luce: What with questions about the Archbishop of Canterbury and about the poll tax, the assumption seems to be that I am the Minister for everything. On this occasion, I can tell the hon. Gentleman that civil servants —as we said earlier—are accountable to Ministers, and Ministers are accountable to Parliament. That is our constitutional system, and I am surprised that the hon. Gentleman does not understand that.
    Mr. Aitken: Is my right hon. Friend aware that he is being asked such a wide variety of questions because the Civil Service has claimed such omniscience for so many years? The famous title given to civil servants—GCMG —was always known as "God calls me God", which seems very appropriate for the Archbishop of Canterbury.
    Mr. Luce: I do not know whether my hon. Friend was recommending me for that as well. Let me make it plain that I believe that we have an outstanding Civil Service, which has a great sense of duty. Civil servants owe that duty to the elected Government of the day, and they serve those Governments with great loyalty and impartiality.
    Dr. Marek: What developments can we expect in the provision of workplace nurseries for civil servants?
    Mr. Luce: As the hon. Gentleman knows, my right hon. Friend the Chancellor of the Exchequer has rightly responded to representations asking him to encourage the employment of more women in not only the Civil Service but all employment sectors. With many other people, I welcome that: in the next few years—especially in the 1990s—many more women will be needed in the Civil Service.

    Next Steps Agencies
    Mrs. Gorman: To ask the Minister for the Civil Service what recent representations he has received regarding the candidatures of passport offices to become next steps agencies.
    Mr. Luce: The Passport Office is one of the 42 announced candidates for agency status. The main aim of the next steps initiative is to deliver Government services more efficiently and effectively, within available resources, for the benefit of taxpayers, customers and staff.
    Mrs. Gorman: As we approach the season of cherry blossom, Easter holidays and Passport Office strike

    19
    mayhem, will my hon. Friend consider bringing into the discussion some of the private organisations that are well experienced at making the necessary checks for the credit agencies and the banks, on the grounds that they turn round applications, having made all necessary checks, within a maximum of 10 days and at a cost of less than £2 an inquiry? Will my right hon. Friend give me his opinion on that possibility?
    Mr. Luce: My hon. Friend will be aware that although it is primarily the responsibility of my right hon. and learned Friend the Home Secretary, plans are well advanced for the establishment of an agency within the passport service. However, my right hon. and learned Friend has made it plain that he will use relevant private sector expertise where that would help to improve standards of service. Of course, the decsion to establish an agency, along with all the other agencies that we now have, is to help to improve services to the public. I hope that my hon. Friend will welcome that.

    Disabled People
    Mr. Wareing: To ask the Minister for the Civil Service what plans he has to encourage Government Departments to adhere to the quota system in order to ensure that better opportunities are available to enable disabled people to be recruited into the Civil Service.
    Mr. Luce: All Departments aim to employ a 3 per cent. quota of staff who are registered as disabled. We will shortly be publishing a revised code of practice on disability to help to increase employment opportunities for disabled people in the Civil Service.
    Mr. Wareing: It is nice to hear the Minister, who is sitting next to the Minister with responsibility for the disabled, say that the Government are trying to ensure that the quota is met, but they are not achieving much. Not a single Government Department, including the Cabinet Office, adheres to the 3 per cent. quota. Is that because it is really the Government's intention to phase out the 3 per cent. quota?
    Mr. Luce: The latter part of the question is for my right hon. Friend the Secretary of State for Social Security, but the hon. Gentleman is wrong to suggest that no Department has met or exceeded the quota of 3 per cent. At 1 June 1989, five Government Departments were above the quota and four had reached 2·5 per cent. Overall 1·3 per cent. of Civil Service employees are registered disabled, which is a little more than the figure for the national work force.

Social Fund
3.31 pm
The Minister for Social Security (Mr. Nicholas Scott): With permission, Mr. Speaker. I will make a statement on the social fund. The House will recall that on 21 February the High Court delivered judgment on applications for judicial reviews in three cases concerning the social fund.
The judgment confirmed the power to give directions for the control and management of the social fund. It also confirmed the directions on how social fund inspectors are to review decisions, but found that some guidance was not consistent with the direction. Finally, it found that some aspects of the guidance on budgets was too prescriptive, and therefore not valid as guidance.
On the day of the judgment, the Department sent a letter to social fund officers informing them that the local office budget and the level of priority that might usually be met were factors to be taken into account in reaching a decision, but they were not the overriding factors. I am now in a position to set out in detail the further measures we shall be taking in response to the judgment.
We are today issuing new guidance to all social fund officers to take account of the court's decision that some of the guidance on the budget in the social fund manual was couched in language that was too prescriptive for guidance.
We are also issuing guidance today about applications for review from people who may have had applications to the fund turned down on grounds of insufficient priority because of budgetary constraints. A leaflet for the public to provide information on this matter is being distributed to DSS local offices.
As I have already mentioned, local offices were advised on the day of the judgment that the guidance on budgets was defective. From then onwards, cases should not have been refused on the basis of the defective guidance. However, if any applicants are dissatisfied with the social fund officer's decision they have the right to request a review in the ordinary way.
Although the court found that some of the guidance on budgets was too prescriptive, its judgment explicitly recognised that Parliament clearly intended that the social fund should be subject to strict monetary limits and that the Secretary of State needs to be able to give directions to achieve financial control. In the light of that, and so that there should be no doubt that it is the Government's intention that the social fund should be operated within a firm budgetary framework, I am introducing an amendment in the current Social Security Bill to make explicit the power of my right hon. Friend to give directions relating to the financial control of the fund. The amendment will similarly put beyond doubt my right hon. Friend's power to specify who is eligible for payments from the fund.
We will also take the opportunity to introduce two other minor amendments for the purposes of clarifying the procedures for applications for loans from the fund and the date on which an application to the fund is to be treated as having been made.
Copies of the new guidance on budgets and reviews and of the leaflet are in the Library.
I should also like to take this opportunity to remind the House that on Friday 16 February my right hon. Friend the Secretary of State for Social Security laid the Social
22
Fund (Miscellaneous Amendments) Regulations. These will introduce a number of beneficial changes to the scheme, with effect from 9 April. In particular, they will implement two changes which we announced in the uprating statement. First the change to the capital rule, which he made for social fund cold weather payments in January, will be extended to the other social fund-regulated payments. Thus, people aged 60 or over may qualify for help whilst retaining up to £1,000 rather than £500, in savings. Secondly, the regulations will increase the amount payable for maternity expenses from £85 to £100.
Finally, I wish to turn to the social fund budget for 1990–91. The House will recall that I announced last year that the gross allocation for discretionary payments in the coming year, 1990–91, would be £205 million. However, our experience of operating the loans element of the fund has clearly shown that it will be possible to use the available resources even more flexibly next year through the recirculation of repayments returning to the fund. I am therefore pleased to say that I am now able to increase the gross allocation by a further £10 million for 1990–91 to £215 million. This means that the gross budget for 1990–91 will be £12 million higher than the allocation made in April 1989. The £215 million will be divided to provide £152 million for loans and £63 million for grants. As in previous years, I shall be holding back £2 million as a contingency reserve.
In allocating the budgets to local offices, we have included the value of the additional allocations amounting to £3 million made in December and January to 106 offices facing particular pressure. I emphasise that every one of the Department's 448 local offices will receive a higher allocation next year. Of these, 15 per cent. will receive budget increases of 10 per cent. or more, compared with their April 1989 allocations, and nearly three quarters will get increases of 5 per cent. or more.
I shall circulate in the Official Report a list of the allocations to individual offices. I have also placed a copy of the allocations in the Library, together with a note explaining how they were calculated. I am confident that the measures I have announced today will ensure that the social fund continues to be a fair and flexible scheme for those who are most in need.
Mr. Michael Meacher: Is the Minister aware that there is a black hole in the middle of his statement? I refer to the fact that he has not told us what his amendment to the Social Security Bill is. He has not told us the one thing that the House needs to know—his answer to the High Court's judgment against him that he cannot have flexibility and discretion and a cash-limited budget at the same time.
Is the Minister aware that the real meaning of this disingenuous statement is that the Government intend to ignore the High Court decision, to give a nod and a wink to social fund officers to muddle through as best they can for the next three months or so, and, when the Bill becomes an Act in the summer, to issue a directive making it clear that the cash-limited budget must in all cases be the overriding consideration? Thus, any pretence of flexibility or discretion is removed.
Is the Minister aware that this is an incompetent, cynical and dishonest response to the High Court judgment? It is incompetent because it leaves local offices in a state of limbo, with a legal national budget to which social fund officers are entitled to have regard, but with

23
local cash limits that DSS staff cannot use as a reason for rejecting applications. It is cynical because, effectively, it puts the High Court decision on ice. It is dishonest because it sidesteps any proper review of past claims in the light of the High Court ruling. On that specific point, will the Minister tell the House why he should not now instruct offices, which know exactly how many cases—and who —have been refused on priority grounds, to contact all these people and to review their claims?
Is it not clear that the statement completely dodges the central issue—that a cash-limited budget of £205 million, which has been raised by less than the rate of inflation to £215 million, cannot act as an adequate substitute in meeting need for the system of single payments, whose budget in 1986–87 of £365 million was almost twice as high?
Is the Minister aware that nothing in the statement eases the intolerable pressures building up on the social fund, which are leading to refusal rates for applications of 60 to 70 per cent? Nothing in the statement prevents the social fund from driving the poorest in our society deeper into poverty and debt. More than 400,000 people are having to repay social fund loans from their basic income support.
There is nothing in the statement that the Minister could not have said on the day of the judgment. We have waited five weeks for him to announce to social fund officers and to claimants that there will be no change. It is, "Business as usual, but do not shout it out too loud until the Government have squared the courts." Is not that a cynical and dishonest response to a High Court decision which found the Minister guilty of illegality?
Mr. Scott: On reflection, the hon. Member for Oldham, West (Mr. Meacher) may feel that his last remarks were unfair. Following the long and complicated judgment, it was right, in terms of the guidance that we are issuing today and whether we needed to legislate to put the matter right, that we should have taken legal advice and considered carefully what to do before making a statement to the House.
The purpose of the amendment is to put beyond doubt my right hon. Friend's right to issue directions to ensure that he is able to exercise financial control over the social fund budget.
The hon. Gentleman was wrong on his second point: the court did not find in the terms that he stated. Lord Justice Woolf said:
"Although Parliament intended individual applications to be handled with flexibility, it … clearly intended that the scheme should be subject to strict monetary limits and the Secretary of State needs to be able to give directions to achieve financial control."
Lord Justice Woolf saw no conflict between strict monetary control and the flexibility that is at the heart of the social fund. That flexibility, combined with a firm budget each year, has proved its worth in the operation of the fund.
The reason why I do not believe that it is right for local officers to trawl for every claim and to try to identify the individuals concerned is that it is quite clear from the judgment that the change of circumstances since the original decision must be taken into account. It would be wrong to arouse expectations among perhaps thousands of claimants who might have been turned down only for their
24
change of circumstances to show that they are not entitled to claim. The flexibility that is inherent in the scheme has proved its worth.
Sir George Young: Is it not the case that my right hon. Friend's statement addresses itself squarely to the difficulties that arose from the judgment? The judgment made it quite clear that the social fund was meant to be subject to cash limits and that the Secretary of State must have power to give those directions. Does my right hon. Friend accept that Conservative Members regard the social fund as an effective mechanism for giving relief to those on low incomes and for the Department to plan its budget within sensible limits? With the extra help that my right hon. Friend has announced this afternoon, and with the amendment to the Social Security Bill, Conservative Members regard the social fund as an effective instrument of social policy.
Mr. Scott: I am grateful to my hon. Friend, and I agree with his remarks. Predecessor schemes of the social fund —single payments and so on—were totally out of control. Budgets were doubling every two years. It would have been impossible to continue with such provision and behave responsibly towards taxpayers, who provide the money for these schemes. I agree with my hon. Friend that we have achieved budgetary control and have the flexibility and capability effectively to help those most in need.
Mr. Frank Field: Would it be fair to summarise the Government's statement in one sentence: the court found that the Government were breaking their own law in respect of the rights of poor people?
Will the Minister say a little more about the extra money that will now go to all offices? Will it help some claimants who are hard pressed and whose needs have not changed since they were refused help? For example, a disabled pensioner in my constituency who had no bed and borrowed a mattress, and who has found the greatest difficulty in getting up and down from the floor, was refused help from the social fund. Can we, with certainty, assure our constituents in similar circumstances that the extra help announced today will help them, or do the Government believe that such needs can remain unmet?
Mr. Scott: I disagree with the hon. Gentleman's opening sentence in which he sought to interpret the judge's findings. The central point of the judge's finding was that some of the guidance that we had issued was set out in terms which were too prescriptive. He said that we should use the language of guidance when giving guidance, not the language of direction. We are changing our policy to accord with the court's judgment because we agree, on reflection, that that is right. That does not mean that we have been behaving illegally.
The hon. Gentleman knows perfectly well that I will not comment on individual cases. However, the fact that we have been able to increase the budget allocation for the coming year in every local office will enable extra help to be given to some of the most deserving in our society.
Sir David Price: To avoid any doubt as to the full purport of my right hon. Friend's statement, will he confirm that no social fund office will refuse a legitimate claim on the ground that it has temporarily exceeded its local budget?
Mr. Scott: My hon. Friend is entirely right to ask for clarity and I shall make the position clear. In the interim between now and when the Social Security Bill reaches the statute book, social fund offices will work on the guidance issued today, which is that social fund offices will have to take account of budget priorities, but those will not be overriding priorities, as indicated in the guidance which was found to be defective. If the Social Security Bill reaches the statute book in its present form, it will make absolutely clear my right hon. Friend the Secretary of State's power to set down firm, financial guidelines for the fund's operation.
Mr. James Molyneaux: Will not expectations be raised by the fact that this is a public statement which is presumably being broadcast? Therefore, will the Minister reconsider the suggestion made by the official Opposition that his Department and offices throughout the United Kingdom should contact applicants who have been refused? If that is impossible, can leaflets be made available soon to Members of Parliament who will have to bear the burden?
Mr. Scott: The right hon. Gentleman's second suggestion is the right way forward. Leaflets are available today in the Vote Office, if not in the Library. They are also being distributed to local offices, and local office managers are being encouraged not simply to keep them in the offices, but to make them available to citizens advice bureaux and other sources of welfare advice in their area.
Mr. David Shaw: Will my hon. Friend confirm that the effect of today's announcement is that more money is to be made available for social security? Is it not true that, overall, since the Government came to office, about three times as much money has been allocated to social security? Is not that far more than inflation would have added to social security? Therefore, are not the Government a caring Government when it comes to social security?
Mr. Scott: I am grateful to my hon. Friend for his support. Anyone who looks fairly at the Government's record since they came to office will see that, in terms of social security in general and help for the sick and disabled in particular, they have more than fulfilled their pledges to the electorate and performed a jolly sight better than the Labour party did when it was in office. We shall continue to find those resources because we run the economy much more successfully than did the Labour party.
Mr. Alfred Morris: How will the budget of the social fund be affected if the independent living fund's current financial crisis is not resolved quickly? Will the Minister comment on that problem which, as he knows, is so important for severely disabled people in terms of community care?
Mr. Scott: I recognise what the right hon. Gentleman has said. However, he will not expect me to comment in detail today on the independent living fund because he knows that I am in touch with the trustees about their difficulties. We obviously hope to make our intentions clear about future funding in due course. However, I also recognise the valuable service that the fund has provided for severely disabled people.
Mr. Robert McCrindle: While I welcome the increase in resources that my right hon.
26
Friend has announced, I notice that approximately 70 per cent. is to be devoted to loans and only 30 per cent. to grants. In the light of the experience of the social fund so far, does my right hon. Friend remain convinced that that is the correct ratio bearing in mind the acute difficulty that some recipients will have in repaying loans? Will he also confirm that if a beneficiary defaults on the repayment of a loan in one year that will not militate against his being able to obtain a grant from the social fund in succeeding years?
Mr. Scott: That would be a matter for individual judgment by social fund officers in the particular circumstances of the case.
On the main thrust of my hon. Friend's comments, the proportion between grants and loans is broadly the same as it was last year—
Ms. Clare Short: It was not right then.
Mr. Scott: It was not wrong then. Within those parameters, it was possible for us to find in thousands of cases that people who could not get loans were given grants instead.
Mr. Charles Kennedy: Why has not the Minister taken this opportunity to remove one of the most offensive aspects of social security reviews—the withdrawal of a claimant's right to independent appeal outwith the existing social security system with regard to a claim? The Minister has quoted figures about the increases that he is making available. Is it not true that only one in 10 social security offices will see increases in their budgets that keep pace with inflation over the past 12 months? Is it not also true that even those figures are skewed as many people do not bother to claim in the first place, because they know that they will receive a loan which will come off their existing meagre income support benefits?
Mr. Scott: On the hon. Gentleman's first point, the system of reviews, including reviews within local offices of claimants' entitlements and also reviews of the work of the social fund inspectors, has worked very well. If the hon. Gentleman takes the trouble to read the judgment of Lord Justice Woolf, he will see that considerable compliments were paid to at least one social fund inspector for the meticulous way in which he carried out his work.
On the hon. Gentleman's second point, inflation is not the main issue which must be borne in mind when we are considering something the size of the social fund. We must bear in mind the level of need and the flexibility with which we can meet it. We must also consider matters such as the income support case load. As that has decreased, I suppose that some people could have made a case for reducing the size of the social fund. We have not done that—we have increased it.
Dame Elaine Kellett-Bowman: Does my right hon. Friend accept that most sensible people believe that the single payment method was gobbling up far too much of the money available and that this method is much fairer? Have any of the 106 offices that are having difficulty run out of money, and, if so, what was my right hon. Friend able to do about it?
Mr. Scott: As my hon. Friend is aware, I share her view of the inadequacy of the single payment system and

27
particularly the lack of any budgetary control over such payments. As has been announced already, 106 local offices were coming under pressure towards the end of last year and we were able to allocate about £3 million to help them. As pressures have become apparent in other offices since the turn of the year, we have been able to give another £1·5 million worth of help to other offices that are under pressure. No office has run out of money or is in danger of doing so.
Mr. Merlyn Rees: Will the Minister help me to advise my constituents following a meeting of just 100 people last week, many of whom were war pensioners, war widows, and on attendance allowance or disability allowance? We sat with counsellors for a long time discussing their financial problems. Many of them said, "We cannot afford to pay our poll tax. May we go to the social fund to get a loan?" Will they be able to get a loan to help to pay their poll tax?
Mr. Scott: Certainly not unless they were on income support, which is the basic qualification for getting a loan. The categories that the right hon. Gentleman mentioned —war widows, war pensioners and the disabled—are groups to which the Government have recently given substantial help.
Mr. Tim Rathbone: Having reassured us that no office has run out of money, will my right hon. Friend also reassure us that he is content with the method of assessment of need for individual offices and the allocation of funds to those offices?
Mr. Scott: Each year we endeavour to look at the last year's allocation and see how it might be amended according to assessments of demand for the future. That requires a certain degree of fine tuning. With each year that passes we learn more about how to do that. Further, we try to ensure that no local office has too sharp a change in its allocation from one year to another.
Mr. Ted Rowlands: After the Social Security Bill has been amended, will it be possible for a local social fund officer to refuse an application on the ground that it will place undue strain on the local budget? Will the Government's guidance notes clarify the situation regarding applications for house repairs? There have been examples of one local office being given them and another not being give them.
Mr. Scott: It is up to local offices to exercise their discretion and judgment. Apart from any help under the social fund, income support can provide help, certainly with interest on loans for house repairs. The Department of the Environment also has schemes to help with such matters.
Let me make it clear that the intention behind the amendment, as I have said on several occasions, is to give my right hon. Friend the Secretary of State power to operate the fund under proper financial disciplines. It is absolutely implicit in that that local offices will be expected to adhere to fixed budgets.
Mr. David Harris: Does my right hon. Friend agree that the hon. Member for Oldham, West (Mr. Meacher) at least has the merit of consistency, because he was as over-the-top in his reaction to today's statement as
28
he is to all statements that are made in the House? Does he agree further that there was manifold abuse of the old system of single payments and that, given the flexibility that he spoke about today, the social fund is not only a welcome development but a proper development?
Mr. Scott: When I see the hon. Member for Oldham, West (Mr. Meacher) at the Dispatch Box, I am sometimes reminded of what the late Lain Macleod said about Lord Callaghan—"The law of averages is suspended—he is always wrong."
Of course we all knew of the evidence of abuse under the single payment scheme—it was manifest around the country. Offices had thousands of applications for similar needs within a very few weeks because of take-up campaigns rather than real expressed need within their communities.
Mrs. Audrey Wise: Will the Minister confirm that he does not collect information about different priorities given by different offices for the same types of need? How can he know whether payments are either equitable or adequate if, for instance, he does not know whether some offices deem shoes for disabled people a low priority and refuse grant on that ground?
Mr. Scott: We will monitor a number of aspects of the social fund to see whether it is meeting needs. Perhaps more important than that and more likely to meet the hon. Lady's particular requirements is the fact that, as she knows, we have commissioned research by the social policy research unit at York university. It is monitoring in some detail the effects of the social fund, and it will report next year on whether the social fund is meeting the needs that it was designed to meet when it was set up. All hon. Members will look forward to that research.
Several Hon. Members rose—
Mr. Speaker: Several hon. Members are now rising who were not doing so before. I must put a limit on questions until 4.10 pm. We have an important debate ahead of us, in which I shall have to impose a 10-minute limit on speeches, and a ten-minute Bill.
Mr. Patrick Thompson: Despite the negative attitude of members of the Opposition Front Bench, who, as usual, are long on criticism and short on constructive policy, will my right hon. Friend accept my welcome for the extra money that is to be provided for the social fund which will benefit many of my constituents in Norwich? Can he explain under what circumstances my constituents, who have previously been refused payments from the social fund, will be able to reapply as a result of the statement, and will he also accept my congratulations on the swift way in which my local offices in Norwich respond to inquiries from Members of Parliament on behalf of their constituents?
Mr. Scott: I am grateful to my hon. Friend both for his praise about his local offices and for his gratitude about the money that we have been able to find to increase the level of the budget for the coming year. Anybody who has been turned down for a loan or a grant need only ask for his or her case to be reviewed by the local office. Those cases will then be reviewed in the light of the guidance that has been issued today.
Several Hon. Members rose—
Mr. Speaker: Order. If hon. Members ask single questions, I may be able to call all those who wish to put a question.
Mr. Alan Williams: Will the Minister confirm that the £12 million increase that he boasted about earlier does not take any account of the fact that, as he has said, he has had to increase by £4·5 million the amount that is given to social security offices during the year? Therefore, as compared with the current year's outturn, is not the increase really about £7 million, or about 3·5 per cent., at a time when the cost of living is rising by 9 per cent. for the people he describes as the most deserving in our society?
Mr. Scott: I hope that several of the reasons that have put local offices under particular pressure will be considered one-offs for last year. In the extra resources that we are giving local offices for the coming year, we still retain an ability to respond flexibly to special circumstances, such as to what happened in north Wales recently and to other pressures that are put on local offices. We intend to retain as much flexibility as we can within the overall budgetary allocation.
Mr. Andrew Rowe: Did my right hon. Friend hear that in the question that attacked him for being disingenuous, the hon. Member for Oldham, West (Mr. Meacher) stated that the single payments fund was virtually double the present fund? By so doing, he clearly ignored about £65 million. Does my right hon. Friend agree that that carelessness with figures is precisely one of the reasons why the hon. Member for Oldham, West will never have the opportunity of being Secretary of State for Social Security?
Mr. Scott: I noticed the mistake that the hon. Gentleman made in his figures today. They were different from the figures that he used last time—and just as wrong.
Mr. Dafydd Wigley: Is the Minister aware that he let the cat out of the bag in his reply to the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) when he admitted that, after the passing of the Social Security Bill, even those who are top priority cases may not get any help if there is a directive to that end? Can the right hon. Gentleman contradict what I have just said and give an assurance that no top priority case will ever be refused simply because of lack of money?
Mr. Scott: In the light of the increased allocation that I have announced today, I see no reason why highest priority cases should not be met. In many offices, the priorities to be met will fall well below that.
Mr. Richard Holt: Did my right hon. Friend hear BBC Radio 4 last Friday evening when there was a one-sided, biased, typical BBC attack on the social fund, in which one of the so-called "typical claimants" complained that she had to repay her loan for her television and video? Does my right hon. Friend agree that there are many people who would like to have a video but cannot afford one?
Mr. Scott: On the other hand, that shows the flexibility of the social fund. I do not know the circumstances of that case, but I do know that one lady who was suffering from agoraphobia and who was unable to go out was granted a
30
loan to buy a television set and a video recorder to enhance the quality of her life. That shows the flexibility of the social fund in an imaginative way.
Mr. John Battle: Why has the list of priority groups not been extended to include the homeless? I refer especially to women and children who have suffered domestic violence and who end up in hostels, but who cannot be rehoused by local authorities because they cannot get a social fund grant with which to set up a new home.
Mr. Scott: There is national guidance on this, but local offices also have the ability to set their own priority cases and to give guidance to that effect. Incidentally, although the legislation at the moment is permissive, enabling local area social fund officers—normally the local office manager—to give such guidance, that will be mandatory on them in the new scheme.
Mr. Anthony Beaumont-Dark: We all sympathise with the view of any Minister who has a cash-limited budget, but a real problem arises as to where there is a genuine need. If there are more people in need than there is cash available, can my right hon. Friend assure us that it will not be spread so thin that somebody's need will not be met? That is the problem.
Mr. Scott: Any system that offers such lump sum payments within a controlled budget faces difficulties. In the New Statesman and Society on 2 March, Mr. Tony Lynes said that nobody has ever found a satisfactory way to cope with this situation. He was referring back to single payments as well as to the social fund. If Opposition Members—particularly the hon. Member for Birkenhead (Mr. Field), who is Chairman of the Select Committee on Social Services and knows a great deal about this—reflect on the matter, they will know that that is true. There will be difficulties in running a scheme at the margins of a social security provision that has to cope with exceptional needs and exceptional circumstances and is budgeted. The alternative—a single payment scheme—is unacceptable.
Mr. Robert N. Wareing: Is it not the case that, because of the inadequacy of the social fund budget in meeting the needs of all needy people, more and more needy people will be driven into institutional care? Is that efficient? Does it deal with care of the needy? Is that the economics of the Government in dealing with this matter? Is not this system inefficient, and should not the Minister think again?
Mr. Scott: The hon. Gentleman knows that the community care grants under the social fund are an important part of the community care policy. He also knows that substantial and radical changes are being made to the policy for care in the community, to operate from April 1991, when local authorities will have extra responsibilities in this sector. We must look at community care in the round, and not narrowly at community care grants.
Mr. Geoffrey Dickens: Had not the old system become a licence to print money? Does not the new system have the great merit, in an age of recycling, that it recycles money so that it can be lent again? Therefore, a lot of money benefits a lot more people.
Mr. Scott: I agree. Nobody can deny that the system of single payments was being abused and exploited, and that an open-ended budget encouraged such behaviour.
Mr. D. N. Campbell-Savours: Does not the cash limiting of a budget that provides for the poorest, and often the destitute, only reflect how the Government are simply not interested in poverty and the position of the poor? Does not the by-election in Mid-Staffordshire tell the Government that many millions of our people—
Mr. Speaker: Order—one question. The hon. Gentleman is being unfair to his colleagues. We have only three minutes more.
Mr. Campbell-Savours: Mr. Speaker, every time I ask a question, you interrupt me. Can you cease this practice? You are always doing it, and it is being commented on by my hon. Friends.
Mr. Speaker: I asked for single questions in the interests of the House, so that other hon. Members could ask questions. The hon. Gentleman always asks more than one question.
Mr. Scott: Let me put the social fund in context. The Department spends over £1 billion a week on social security, meeting need in a variety of ways. This is a fund at the edge of social security provision which provides exceptional help for exceptional needs, and it does it well and flexibly.
Mr. David Winnick: Under the single payment scheme, poor people could receive assistance for essential items such as furniture and clothing, but now they receive only a loan, which has to be paid back out of the lowest income—income support. Why is it that, time and again, the Government inflict further punishment on the poorest?
Mr. Scott: The hon. Gentleman overstates the attractions of the single payment scheme, whereby specific and detailed regulations determined whether somebody received any help. If they were just outside the provisions, they were denied any help, and if they were just inside, they got it. The social fund has an enviable flexibility.
Mr. Tom Clarke: Precisely how many personnel in the Minister's Department are employed to deal with the reviews which he has mentioned, where are they located and why do we not have a normal system of appeal?
Mr. Scott: I said in response to an earlier question that I believe that the review system has worked well. Individuals have built up considerable expertise in making these judgments. One of them was complimented warmly by the judge in the recent court case.
Mr. Brian Wilson: It seems that the Minister is more interested in pedantry than poverty. Will he elaborate on local officers not being obliged to take overriding account of their budgets? What is the practical change between the position now and what it will be in a fortnight's time? What happens to the local manager who overruns his budget in response to local needs? What happens to the poor people who are deprived if that manager is in fear of the Minister's retribution?
Mr. Scott: I do not know whether the hon. Gentleman was in his place earlier when I said that I saw no problem
32
in any local office outrunning its budget. I see that position continuing. Local managers are being asked not to give overriding priority to budgetary issues but to take into account a range of other factors. They have been doing that, incidentally, since the day of the judgment, but today we have issued specific guidance in that area.
Mr. Dennis Skinner: Now that the Minister has admitted that in real terms the amount of money available in total will be less next year than it was this year, taking into account inflation, why does not the Minister go to cardboard city at Waterloo, instead of leaving this place and running to a television studio to be interviewed and to twist words to try to give the impression that a real advance has been made, and address the people there who have finished up in a heap because they have been unable to get the grants that used properly to be available? Why does not he tell them how many cardboard boxes could be purchased with a £2 million contingency fund?
Mr. Scott: Although I said that inflation was not the most important element which had to be considered, and that there were other factors such as the income support case load, in practice the allocation for the coming year, compared with the allocation announced for April of last year, will be broadly in line with the index that is used for calculating increases in costs, leaving out housing costs.
Basis of Social Fund Allocations 1990–91
1. This note explains the basis on which the social fund budget allocations for 1990–91 have been calculated.
Total Social Fund Budgets
2. The breakdown of the social fund budget for Great Britain for 1990–91 is as follows:
Community Care Grants: £63 million
Loans: £150 million (gross)
In addition £2 million has been held back centrally as a contingency reserve for meeting unforeseeable demands on offices in the course of the year (eg a local flood).
Principles of allocation to local offices in 1990–91
3. The 1990–91 allocation is based on a three component formula as follows:

(i) 86 per cent. of the national grants and loans budgets are distributed between local offices on the basis of their 1989–90 budget allocations;

(ii) 6 per cent. of the budgets is distributed on the basis of need as expressed by the offices' share of the national income support caseload;

(iii) 8 per cent. of the budgets is distributed on the basis of demand as expressed by the offices' share of social fund expenditure and the estimated value of refusals on grounds of insufficient priority.

The details of each of the components in the allocation formula are spelt out in more detail below.
Distribution by 1989–90 allocation
4. This simply allocates 86 per cent. of the total budget on the basis of an office's actual allocation for 1989–90. It includes where appropriate the value of any additional allocation made to 106 offices in December 1989-January 1990. The relatively high weighting given to this component ensures that the pace of change from one year to the next is contained.
Distribution by caseload
5. Caseload figures used were the average of income support caseloads at August and November 1989. Distribution was then made on the basis of an office's share of the national caseload for each of 4 client groups as follows:
P Pensioners
E Unemployed claimants paid through Unemployment Benefit Offices

33
D Claimants (not pensioners) receiving a disability premium
O Other income support claimants
Social fund data were then used to weight the distribution in respect of the 4 client groups on the basis of their share of payments made in the period April to December 1989 (the latest available) as follows:

Community Care Grants

Loans

per cent.

per cent.

P

20·4

P

3·6

E

18·5

E

36·5

D

15·2

D

5·3

O

45·9

O

54·6

Allocations for 1990–91

Loans

Grants

77 Canterbury

136,144

63,403

78 Chatham

404,165

162,622

79 Chelsea

348,299

150,360

80 Chichester

65,797

31,088

81 City (London)

101,379

45,897

82 Crawley

131,540

65,465

83 Croydon

405,634

162,169

84 Crystal Palace

411,931

184,624

85 Dartford

123,756

54,756

86 Dover

102,904

43,093

87 Eastbourne

174,820

79,517

88 Epsom

60,085

27,086

89 Fareham

212,745

86,328

90 Folkestone

127,130

55,328

91 Gravesend

121,381

51,534

92 Greenwich Park

543,040

228,284

93 Guildford

129,498

59,391

94 Hastings

233,151

113,207

95 Havant

221,873

88,514

96 Hither Green

73,266

32,100

97 Hounslow

400,588

171,874

98 Hove

173,687

82,647

99 Isle of Wight

233,831

100,865

100 Kennington Park

392,920

165,513

101 Kensington

207,091

89,444

102 Kingston

143,694

63,381

103 Lewes

110,718

49,701

104 Lewisham

578,812

243,943

105 Maidstone

164,592

71,760

106 Mitcham

135,644

61,585

107 New Forest

146,950

63,445

108 New Malden

78,558

34,349

109 Newbury

85,820

39,107

110 Orpington

94,885

42,199

111 Oval

411,832

199,167

112 Peckham

373,719

150,368

113 Portsmouth North

192,992

82,902

114 Portsmouth South

200,435

75,035

115 Reading

389,218

162,972

116 Redhill

106,415

48,222

117 Sittingbourne

180,284

74,574

118 Slough

235,074

101,459

119 Southampton

511,747

211,718

120 Southwark

459,613

224,244

121 Streatham

372,453

132,927

122 Sutton

84,297

37,484

123 Thames South

35,971

14,209

124 Thanet

270,383

120,637

125 Tunbridge Wells

123,333

55,913

126 Twickenham

81,535

37,520

127 Wandsworth

222,090

95,840

128 Westminster

159,594

71,926

129 Wimbledon

177,784

75,421

130 Winchester

99,984

42,491

131 Woking

158,995

68,610

132 Woolwich

749,499

318,730

133 Worthing

163,899

74,707

Allocations for 1990–91

Loans

Grants

3. Midlands region

134 Birmingham, Bradford Street

335,250

135,351

135 Birmingham, Edgbaston

625,148

266,869

136 Birmingham, Erdington

576,932

250,364

137 Birmingham, Handsworth

799,580

329,888

138 Birmingham, Ladywood

481,753

203,371

139 Birmingham, Northfield

571,223

237,978

140 Birmingham, Perry Barr

425,380

173,351

141 Birmingham, Ravenhurst

299,270

136,751

Allocations for 1990–91

Loans

Grants

142 Birmingham, South Yardley

560,904

236,831

143 Birmingham, Sparkhill

230,820

96,834

144 Birmingham, Washwood Heath

496,594

219,871

145 Boston

131,208

58,093

146 Burton on Trent

128,828

57,409

147 Cannock

219,091

87,540

148 Chesterfield

440,639

187,762

149 Corby

189,377

78,868

150 Coventry, East

766,822

300,475

151 Coventry, West

488,648

195,622

152 Derby, Becket Street

243,130

107,559

153 Derby, Heritage Gate

142,506

61,336

154 Derby, London Road

345,640

142,485

155 Dudley, North

473,956

192,810

156 Dudley, South

216,456

96,559

157 Grantham

124,724

52,820

158 Hereford

217,681

98,940

159 Ilkeston

210,207

90,097

160 Kidderminister

256,545

100,098

161 Leamington

206,992

92,591

162 Leicester, Burleys Way

246,180

107,039

163 Leicester, Lower Hill Street

373,987

168,898

164 Leicester, Norton Street

422,097

185,193

165 Leicester, Yeoman Street

596,467

257,512

166 Lichfield

328,732

130,419

167 Lincoln, Newland

328,720

142,645

168 Lincoln, Orchard Street

384,204

175,940

169 Loughborough

185,298

80,819

170 Mansfield

391,307

180,253

171 Newcastle (Staffordshire)

249,611

102,861

172 Northampton

381,709

167,452

173 Nottingham, Castle Gate

349,577

153,998

174 Nottingham, David Lane

390,691

173,760

175 Nottingham, Shakespare Street

501,296

217,668

176 Nottingham, Station Street

390,725

178,061

177 Nuneaton

291,826

118,819

178 Redditch

199,971

83,385

179 Rugby

120,130

53,449

180 Shrewsbury

309,767

135,679

181 Skegness

92,129

41,524

182 Smethwick

520,889

216,838

183 Stafford

137,107

60,357

184 Stoke, North

436,633

202,155

185 Stoke, South

270,571

136,199

186 Sutton-in-Ashfield

196,191

84,702

187 Telford

464,842

198,959

188 Walsall, East

350,754

141,541

189 Walsall, West

466,648

205,599

190 Wellingborough

313,093

143,008

191 West Bromwich

585,650

248,315

192 Wolverhampton, North

739,143

302,661

193 Wolverhampton, South

604,938

254,817

194 Worcester

293,150

140,745

195 Worksop

250,038

106,190

Points of Order
4.14 pm
Mrs. Ann Clwyd: On a point of order, Mr. Speaker. You may have seen alarming reports in the press this weekend with headlines such as, "Ridley backs Third World aid to Soviets". Apparently the Secretary of State for Trade and Industry is to press in the Cabinet for funds to be diverted from the world's poorest people to eastern Europe. If this is correct, Mr. Speaker, it is a most appalling suggestion. Britain is already—
Mr. Speaker: Order. I do not know whether the report is correct. What is the point of order for me?
Mrs. Clwyd: If the reports are correct, Mr. Speaker, it is an appalling suggestion. Britain is already one of the most miserly aid donors in western Europe. The value of official development assistance to the Third world has dropped by a quarter since 1979.
Mr. Speaker: Order. There is enormous pressure on time today because so many right hon. and hon. Members wish to participate in the debate on the Budget. I cannot answer the questions which the hon. Lady has put to me. I have not received a request for a statement. I am sure that what she has said will have been heard. The Leader of the house is present.
Mrs. Clwyd: I am coming to the request that I have for you, Mr. Speaker.
Given the considerable influence of the Secretary of State for Trade and Industry—
Mr. Speaker: Order. This is unfair on the hon. Lady's colleagues. She is raising matters which have nothing to do with me. I cannot entertain her point of order; she has made her point.
Mrs. Clwyd: Further to my point of order, Mr. Speaker.
Mr. Speaker: What is the point of order for me?
Mrs. Clwyd: If you would allow me to finish, Mr. Speaker, I shall make that clear. I request a statement from the Government on what they intend to do in terms of the Third world budget.
Mr. Speaker: I am sure that that has been heard by those who are sitting on the Government Front Bench.
Mr. Tony Benn: On a point of order, Mr. Speaker. I wish to ask your advice on something that touches upon a constitutional matter.
Over the weekend we heard that the Archbishop of Canterbury had announced his retirement. A new appointment would usually fall to be made by the Prime Minister under the procedures laid down. However, the House has an interest in this matter, which I have expressed both to you, Mr. Speaker, and in other ways. What I want to know simply is this: is it in order for a Member of Parliament to put a question to the Prime Minister on a matter that falls within the prerogative? Also, is it in order for me to raise this matter in the Adjournment debate tomorrow? If hon. Members were excluded from raising questions, not about the name but about the procedure, it would neutralise us and prevent us from raising matters of legitimate concern to the community.
Mr. Speaker: Order. I do not think that it is our practice to ask questions of the Prime Minister on the royal prerogative, but I am sure that, with a certain amount of sophistication, the right hon. Gentleman might make his point during the Adjournment motion tomorrow.
Mr. Benn: Further to that point of order, Mr. Speaker. I appreciate your answer, but I had hoped that you would not feel it necessary to give an immediate decision. If the Prime Minister cannot be questioned on the exercise of powers that are entrusted to her by virtue of the fact that she is Prime Minister, this House is paralysed and cannot pursue matters that can be answered only by the Prime Minister under the arrangements governing relations with the Church of England.
Mr. Speaker: Order. If the right hon. Gentleman wishes to table a question, he should go to the Table Office where advice on this matter will be given to him.

Safety in Children's Playgrounds
4.16 pm
Mr. Robert G. Hughes: I beg to move,
That leave be given to bring in a Bill to lay down safety standards for equipment, layout and surfaces in children's playgrounds.
I introduced a Bill during the last Session that, because of lack of parliamentary time, was not successful. I wish to explain why I now wish to introduce this similar, although not identical, Bill.
Anyone who has been to a children's playground or has taken a child to one knows why the Bill is necessary. For example, most playgrounds have hard surfaces underneath the swings. The latest statistics available from the Department of Trade and Industry show that 70,000 children were taken to hospital because of accidents in playgrounds, 30,000 of them with swings.
To show how serious some accidents can be I wish to highlight one that happened in Northern Ireland. In August 1989, a nine-year-old boy fell off a swing in Hillhall. He did not deserve to fall on to a concrete kerb. He need not have broken his arm and severed two arteries. He does not deserve the fact that he may never fully regain the use of that arm. He did not deserve the fact that Lisburn council waited until after that tragedy to pledge that money was no object in keeping children safe. The question for the House is how many children's playgrounds are in that state of disrepair.
My Bill last Session resulted in one piece of good fortune for me and my children. After the playground in London to which I take my daughters had appeared several times on television—when the broken kerbs, the uneven concrete and the lumps of metal sticking out of the ground were highlighted—the local authority magically discovered that it needed to put down safer surfacing. I am grateful for that, but I should also be grateful if local authorities would think about how many more playgrounds need safer surfacing.
It is difficult to get a ten-minute Bill through Parliament, but, having had the temperature of debate raised not only by my Bill last Session but by the many people who have campaigned throughout the country wanting to know what would happen to their children's playgrounds, local authorities decided to revise their policies and to lay down safer surfacing, provide new equipment and generally uprate their playgrounds. Progress has been slow. I regret that some local authorities have even run away from the problem. They have been able to do so because some scientific data are misleading.
One report produced by Karen King and David Ball, who worked for the Greater London council scientific services and now are in business on their own, have suggested that safer surfacing is not as good as it should be and that its safety cannot be measured. The data used by
44
those people are not only sometimes out of date, but many are foreign, and so cannot be checked. Advice on safer surfacing and other safety matters is best left to the British experts. In this area, as in so many, British industry and British experts lead. Clearly, safer surfacing can make a dramatic impact on preventing accidents in children's playgrounds.
The Bill that I introduced last year had other effects. The Government have decided that a new code of guidance shall be introduced, and I am grateful to the Minister for Sport who will introduce it later this year. Once again, local authorities will have it brought to their attention that they need to do something about children's playgrounds. It is important that they should look at the good work done by our experts.
Last year's Bill was comprehensive. It would have changed children's playgrounds completely in about five years. Within that time, local authorities would have had to fit new safer surfacing and equipment. This Bill is much less draconian. Some people may worry about the expenditure ramifications, but local authorities will not need to spend more money than necessary. However, they must ensure that they buy the right equipment.
The main effect of last year's Bill was that, in revising their policy, many local authorities spent a great deal of money on new equipment and safe surfacing and thereby stretched the capacity of British industry. Some imports do not comply with the relevant British standards. In this Bill I am asking the House to approve that all equipment sold for use in public playgrounds should conform with British standard 5696, part 2, and the fitting advice in part 3. Where that British standard does not apply, the equipment should comply with the relevant standards laid down by DIN or other British standards. That would help and guide local authorities which are not entirely clear what they should buy. The legislation would help to prevent needless injury to many children in our playgrounds.
We cannot run away from the problem, or pretend that children's playgrounds are supervised, as some local authorities contend. The time is right, the technology and the information are there, so we should act now. I commend my Bill to the House. It is needed now and will stop many children being injured in playgrounds.
Question put and agreed to.
Bill ordered to be brought in by Mr. Robert G. Hughes, Mr. Paul Boateng, Mr. James Cran, Mr. Michael Jack, Mr. Ian McCartney, Mr. Graham Riddick, Mr. Ian Taylor, Mr. Matthew Taylor and Mr. Patrick Thompson.

SAFETY IN CHILDREN'S PLAYGROUNDS
Mr. Robert G. Hughes accordingly presented a Bill to lay down safety standards for equipment, layout and surfaces in children's playgrounds: And the same was read the First time; and ordered to be read a Second time upon Friday 4 May and to be printed. [Bill 110.]
Orders of the Day
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [20 March].
  WAYS AND MEANS

    AMENDMENT OF THE LAW
    Motion made, and Question proposed,
    That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

    (a) for zero-rating or exempting any supply;

    (b) for refunding any amount of tax;

    (c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or

    (d) for relief other than relief applying to goods of whatever description or services of whatever description.—[Mr. Major.]

    Question again proposed.

  Budget Resolutions and Economic Situation
  [Relevant documents: European Community Document No. 9487/89 on the Annual Economic Report 1989–90 and the un-numbered Explanatory Memorandum submitted by HM Treasury on 31st January 1990 on the final version of the Report as adopted by the Council.]
  Mr. Speaker: Before the House resumes the Budget debate, I must point out that resolution 26 on page 3421 of the Order Paper contains an error which occurred in production. The word "unquoted" in paragraphs (a) and (b) should be omitted. The resolution will be duly moved in the correct form.
  As I said earlier, in view of the pressure on time, I propose to put a limit on speeches between 7 o'clock and 9 o'clock this evening, and I hope that that limit will be borne in mind by the hon. Members on the Front Benches as well as by Privy Councillors.
  4.25 pm
  The Secretary of State for Employment (Mr. Michael Howard): The last seven years have seen unprecedented growth in employment and the longest and largest continuous fall in unemployment since the war. That is the reality of the economic performance of this Government. It is a record which the economic strategy set out in the Budget is designed to sustain and reinforce.
  The scale of what has been achieved is far too often taken for granted. In fact, our record on jobs is unequalled in Europe, and the envy of much of the world. There are now 27 million jobs in the United Kingdom—more than ever before—3·4 million more than in 1983. Jobs have grown three times faster than the European average—faster than in France, faster than in Germany, faster even than in Japan.
  We have seen unemployment falling steadily for 43 months running. At 1·6 million, it is now half what it was in 1986. Our unemployment rate of 5·6 per cent. is a full three percentage points below the European Community average. Long-term unemployment has been falling even faster than the total number of unemployed which is down 780,000 since 1986.
  46
  Some hon. Members may recall that, in the general election of 1987, the Opposition promised a reduction in unemployment of 1 million within two years. We did it in less than two—with the very economic policies which the Opposition opposed and vowed to overturn. Where would those 3·4 million extra jobs be now if the Opposition had had its way and pursued its policies of high spending and high taxation?
  The Budget statement continues to give the first priority to the control of inflation, because nothing is more calculated to undermine competitiveness and sap industrial and business confidence. My right hon. Friend the Chancellor of the Exchequer made it clear last Tuesday that we cannot afford to take risks with inflation. Of course, no one—neither the small business nor the home owner—likes high interest rates.
  Mr. Martin Flannery: Is the right hon. and learned Gentleman not missing out a fundamental point? When the Government came to power, unemployment was just over a million. It went up rapidly—at an unprecedented rate—to just short of three million. A decrease from that figure is bringing down unemployment which this Government caused.
  Mr. Howard: The hon. Gentleman is leaving out the fundamental issue—the fact that there are one and a half million more jobs now than there were in 1979. That is a fundamental fact that the hon. Gentleman would do well to recall.
  Neither new businesses nor home owners like high interest rates, but it would be wrong to relax the tight monetary and fiscal framework at this point or to reduce interest rates prematurely. If we can get inflation under control, the prospect is for renewed economic growth, increased business confidence and more jobs. But that means maintaining interest rates at high levels for as long as necessary.
  What happens to jobs in the short term depends on those who are negotiating pay settlements. If unions seek, and managements concede, pay increases which are not warranted by the competitive position of their firms, or the local labour markets in which they operate, the result will be higher production costs, declining competitiveness, and ultimately job losses.
  One of the most important factors in the unprecedented growth in employment over the last seven years has been the enthusiasm of investors in other countries to put their money into British businesses. That is one of the most significant differences between the economic record of this Government and the record of the last Labour Government, and one of the most influential factors in bringing about that change has been the transformation in British industrial relations since 1979.
  No one can dispute the extent of that transformation, because it is a matter of record. In the 1970s, this country lost, on average, some 13 million working days a year through strikes. The average through the last four years has been just over a quarter of that figure. In each of the last two years, the number of strikes—at 675 in 1989 and 781 in 1988—has been the lowest since 1935, and the number of strikes in January this year was the lowest January figure for over 60 years and the lowest figure for any month since September 1934.
  There is one comparison which, better than any other, sums up the contrast between Labour's strike record and

  47
  the position today. In only two months of Labour's winter of discontent—January and February 1979—this country lost 5·4 million working days because of strikes. In those two months alone, more working days were lost than in the whole of 1988 or in the whole of 1989.
  Mr. Eric S. Hefter: If the number of strikes is lower than ever before, and if unemployment is going down, with the result that the economic situation is so much better, why are the Government in such an economic mess?
  Mr. Howard: I am sure that the whole House will welcome the voice of the ghost of the winter of discontent. What that voice uttered was wholly misconceived and wholly mistaken.
  The lesson of the 1970s was clear: strikes destroy jobs. Britain's reputation for strikes, overmanning and restrictive practices exported job after British job to other countries. Since 1979, that trend has been decisively reversed.
  I do not claim that the transformation of industrial relations is the result of our trade union legislation alone. What I do claim is that this transformation would never have been possible without our trade union legislation. It would never have been possible if trade union law had remained as it was in 1979, with virtually unlimited immunity for organising strikes, protection for the flying picket and power for union leaders to order their members to strike without a ballot and under threat of fines and expulsion from their union if they disobeyed.
  It is all the more remarkable, therefore, that the Opposition are now committed to repealing the legislation of the last 10 years and returning, in all essential respects, to the legislation which gave this country the reputation for the worst industrial relations in the western world. They are committed to a massive extension of the scope for lawful strikes. They are committed to legislation which would once again put trade unions above the law.
  I have several times challenged the hon. Member for Sedgefield (Mr. Blair) to spell out the details of his proposals for trade union legislation. I do so again now. If it is made impossible for an employer to get a court order to stop an unlawful strike, what sanction would there be against a union which failed to hold a strike ballot? If trade unions have absolute protection against the possibility of sequestration, what action could a court take if a union refused to pay a fine or damages?
  Mr. Frank Haynes: The right hon. and learned Gentleman has just referred to an important point. He infrequently attends the proceedings in Standing Committee on the Employment Bill. He is therefore unaware that some of his hon. Friends have said in Committee that it is right and proper to stage a dispute if life and limb are at stake. How can one hold a ballot when life and limb are at stake? Action has to be taken immediately. Does the right hon. and learned Gentleman agree with what his hon. Friends have said?
  Mr. Howard: Even the hon. Member for Ashfield (Mr. Haynes) cannot think that the measures to which I refer, and the questions that I put to the hon. Member for Sedgefield—his party's principal employment spokesman —apply to disputes involving danger to life and limb. The
  48
  disputes about which the hon. Member for Sedgefield has consistently failed to answer germane questions are those that lay at the heart of our dismal performance throughout the 1970s. The hon. Member for Sedgefield knows that a court that cannot enforce its own orders is just like a talking shop. He knows that laws that cannot be enforced are not worth the paper on which they are written. Nothing more clearly illustrates the Labour party's failure to learn the lessons of the past, or its determination to return to the policies that crippled our economy in the 1970s.
  Within the overall economic framework of the Budget are a number of specific measures to promote enterprise and remove barriers to the effective matching of people with jobs. With my particular responsibilities for small firms, I know that there will be a widespread welcome for the exemption from value added tax of bad debts, for the raising of the VAT threshold to the maximum permitted by the European Community and for the simplification of the rules for VAT registration. Those are the unglamorous bits of the Budget to the general public, but they are worth around £200 million to business in a full year, and will save small firms countless hours in dealing with red tape and bureaucracy.
  The Budget changes to corporation tax will also give a fillip to small and medium-sized businesses that are growing. Some 20,000 companies will benefit, and as a result many smaller companies will be able to retain more profits for investment. As my right hon. Friend the Chancellor said, those changes mean that we will have the most favourable structure of corporation tax rates for small companies in the European Community.
  It is no accident that the first thing that visitors from eastern Europe want to know is how we have been so successful in promoting enterprise and stimulating the growth of small firms. In 1989, the number of new small firms registering for VAT was 80,000—virtually the same number as for the whole of the five years from 1974 to 1979.
  The measure to exempt from tax the value of workplace nurseries and playgroups has been widely welcomed. Since I assumed my present office, I have probably been questioned and lobbied more on that issue than on any other. The change will encourage employers to set up nurseries and help to remove what is sometimes a daunting obstacle for those mothers who wish to go out to work. However, it is important that employers should continue to examine other ways of helping women who want to come back to work—through more part-time work, more job sharing, special arrangements for school holidays and similar measures. Current projections suggest that 90 per cent. of the growth in the labour force during the 1990s will be among women. That means that employers must find ways of encouraging those women who wish to do so to return to work. I am confident that the Budget measures will give an important boost to that process.
  There are also important measures in the Budget to encourage share ownership. I take particular pleasure in the part played by the privatisation of the water industry in bringing the number of individual shareholders to 11 million—that is, one in four of the adult population. Since 1979, 29 major businesses and about 800,000 jobs have been returned to the private sector. That is good for the productivity and efficiency of those companies, and it is good for the competitiveness of the economy as a whole. It is also to the benefit of the employees of those

  49
  companies, many of whom have bought shares in the companies concerned. That has increased their involvement in those companies, and given them a direct stake in their productivity and profitability. The measures in the Budget to give roll-over relief from capital gains tax for sales of shares in employee share ownership plans will give a further boost to that process.
  Finally, let me deal with training. No one in the House would seriously dispute that our continuing economic success also depends on developing a work force that is second to none in its skills and competence. If we are to compete with the best in the world, industry must strive for the best: in quality, in innovation, in customer care and in its willingness to adapt to changing demands and new technology. That means more and better training: above all, it means more people being ready to train to higher levels of skill, and to continue upgrading their skills throughout their working lives.
  The Labour party delights in constantly diminishing what the people of this country have already achieved in raising their skill levels. It likes nothing better than to exaggerate the gaps between our performance and those of our European neighbours. We shall no doubt hear more of it today from the hon. Member for Sedgefield. However, we lag behind our international competitors in some areas of education and training largely because of the policies promoted by the Labour party during the 1960s and 1970s. It was its policies which reduced standards in education and sought to bring everyone down to the same level of mediocrity; it reinforced trade union restrictive practices in training and it raised levies on the best companies to subsidise the worst. Several generations of people leaving school and entering the work force were damaged by those policies. We are all still living with the consequences.
  In the past 10 years, we have begun to put right the mistakes of the previous 20. We have carried through a fundamental reform in education designed to raise basic standards and to prepare school leavers better for the demands of working life. We have swept away the training levies and the training bureaucracies. We have reduced the power of the trade unions to maintain restrictive practices. We have put the emphasis in education and training back where it should be—on standards, achievement and excellence.
  The results speak for themselves. We now have record numbers of young people staying on in full-time further education beyond 16; more students than ever before in higher education—more than 1 million in 1989—and a higher proportion of young people with degrees than in France, West Germany or Japan. In addition, more than 400,000 16 and 17-year-old school leavers are receiving training each year under the youth training scheme with the opportunity to acquire recognised qualifications, and a further 420,000 unemployed adults are training each year under employment training gaining new skills to help them get back to work.
  Perhaps the best news is that employers themselves are responding to the demands for skilled labour in the economy. Our latest figures show that, in 1987, employers' investment in training was at a record £18 billion; and employers trained 70 per cent. more employees in 1989 than in 1984. The benefits to the economy are to be seen in the fact that, despite an unprecedented period of economic growth, reported skill shortages in 1989 were running at about half the level of the last comparable period in 1973.
  50
  For the future, we are setting up training and enterprise councils in every part of the country—possibly the most important change in the way in which training is planned and delivered for nearly 30 years. The councils will be led by senior business leaders with responsibility for developing training and small business support in their local areas. They will have substantial resources from Government at their disposal, but their prime task will be to mobilise employers in tackling their own skill needs.
  My right hon. Friend the Chancellor announced in the Budget that, for the next five years, company donations to the councils would qualify for tax relief. That is a major vote of confidence in training and enterprise councils and a measure of their central importance in the Government's strategy for raising skill levels.
  Mr. Kenneth Hind: Will my right hon. and learned Friend confirm that, despite the complaints from Opposition Members, industry and commerce spend £15 billion a year on training their work forces, which is approximately five times as much as the Government do, and that what was announced in the Budget, which he has reinforced today, will encourage futher training and answer many of the complaints that we hear from the Opposition? Will he confirm that Britain is taking positive steps towards improving the quality and strength of our work force?
  Mr. Howard: I entirely agree with the substance of my hon. Friend's remarks, but if he will forgive me for saying so, he has underestimated the amount spent by employers on training, which was £18 billion in 1987 and has grown since then.
  Mr. Giles Radice: What is the comparable figure for West Germany?
  Mr. Howard: It is not altogether easy to make direct comparisons with other countries, but the hon. Gentleman ought to take some pride in the amount that has been spent in Britain. We can clearly identify the substantial sums that were invested in 1987 and have increased since then.
  The new tax concession that my right hon. Friend announced for training and enterprise councils is urgently needed, because the initiative is running two years ahead of schedule. More than 600 business men and women on 66 TECs around the country are already drawing up business plans for their local areas. I hope very shortly to announce that the first councils have had their plans approved and are fully operational.
  With the help of the training and enterprise councils, we shall be pursuing three major priorities in the coming year. First, we shall continue to encourage stronger links between business and education so that schools and colleges are more responsive to the needs of industry and turn out young people who are better prepared for work. My Department will be investing over £400 million in this process in the next three years through the technical and vocational education initiative and our support for local partnerships between business and education. That is in addition to the work of my right hon. Friend the Secretary of State for Education and Science in reforming the curriculum.
  Mr. Tony Blair: That is a very different story from that which we used to hear from the Secretary of State's predecessor, who described Britain's training

  51
  performance as "mind-boggling", and said that we had a mountain to climb. Is the new Secretary of State disowning that analysis?
  Mr. Howard: I am concentrating on addressing myself to the tasks which Britain faces. We would all do better to concentrate on those tasks rather than what the hon. Gentleman and his hon. Friends are so keen to do—at every moment to denigrate Britain's performance.
  We shall also be looking to the training and enterprise councils to set targets for the training of 16 and 17-year-old school leavers which reflect the needs of the local labour market and raise the overall level of skills in the work force. We shall also expect them to look at how we can motivate more young people to want to train and to expect training as a normal part of their employment. A total of £2·5 billion will be available from Government over the next three years to support that process. In addition, we are looking to the TECs to draw out substantial and increasing employer contributions.
  Mr. George Howarth: Perhaps I can help the Secretary of State to follow the interventions by my hon. Friends. I understand that there are about 800,000 engineering apprentices in West Germany. What would be the right hon. and learned Gentleman's target in Britain?
  Mr. Howard: The hon. Gentleman is quite right to recognise that his hon. Friends needed help, but I do not consider that facile comparisons are the best way of addressing the problem. We have to make sure that we are providing the training which meets the needs of employers in our country and in the local areas in which they operate. That, above all, is what the training and enterprise councils will achieve.
  Mr. Donald Thompson: Does my right hon. and learned Friend realise that Conservative Members are sick of comparisons with 10 years ago, which are unnecessary as 10 years ago we had nothing in anything? All the Opposition can do now is selectively choose foreign countries where they can find something that comes near to Britain. Opposition Members have referred to Germany. Representatives from our textile industry went to Germany to look at training there and found it producing nothing but industrial peasants incapable of change and flexibility. The only thing to commend it to anybody, and especially to the Opposition, was that it was extremely expensive.
  Mr. Howard: I would not presume to comment on the blunt point made by my hon. Friend. It needs no elaboration from me.
  We shall be looking to TECs to widen the opportunities for adults to develop and upgrade their skills, particularly skills that are in short supply. Again, the Government will support this process with over £1 billion in each of the next three years. We shall expect the councils to focus this public support on retraining unemployed people, on improving training in small firms, and on other gaps in the labour market. Above all, we shall continue to look to employers to make the major contribution in developing the skills that industry needs.
  Mr. Robert Sheldon rose—
  Mr. Nigel Forman: My right hon. and learned Friend has been talking about the very important contribution made by the training and enterprise councils. Can he confirm that the Government are minded to look favourably on the whole idea of individual training allowances, which have been suggested by many people who have studied this matter as a good way of giving extra support to individuals who want to help themselves?
  Mr. Sheldon rose—
  Mr. Howard: My hon. Friend may be aware that that matter is being looked at. I am afraid that, at this stage, I cannot give him the outcome of our deliberations.
  What I have described is a coherent strategy, which offers the prospect of creating a skilled work force for the 1990s. Perhaps we shall hear today from the hon. Member for Sedgefield how much of this strategy the Labour party is prepared to support. Will he acknowledge, for example, that the Government are spending about three times as much, in real terms, on training as did the last Labour Government? Will he now publicly support our programmes for training young people and unemployed adults, and encourage Labour local authorities to participate? Will he today make a commitment to retain the training and enterprise councils in their present form, with the leadership of senior business people?
  Above all, will the hon. Gentleman acknowledge, and apologise for, the totally negative attitude taken by his party to every one of the training initiatives introduced by this Government in the past 10 years? No doubt the hon. Gentleman—who is turning his head away—would prefer to forget the fact that five out of the last eight Labour party conferences passed resolutions attacking the youth training scheme; that its 1988 conference declared its total opposition to employment training and called
  "on all Labour Councillors and Labour controlled local authorities to boycott the scheme in every possible way";
  and that several Labour councils have obeyed that injunction to the letter. How dare the Labour party lecture us on training when that is its record of shame.
  Mr. Sheldon rose—
  Mr. Deputy Speaker (Sir Paul Dean): Order. If the Minister does not give way, the right hon. Gentleman must not persist.
  Mr. Sheldon: Will the Minister give way?
  Mr. Howard: No, I am not giving way.
  The right hon. and learned Member for Monklands, East (Mr. Smith) had the effrontery to say last week that training had been
  "grossly neglected in the past decade".—[Official Report, 21 March 1990; Vol. 169, c. 1131.]
  The right hon. and learned Gentleman has a certain reputation for mastery of the language. He certainly has an odd definition of the word "neglect". Given that the Government of which he was a Cabinet member spent three times less, in real terms, on training, I wonder what word he would have used to describe his own Government's performance. I shall give way if he would like to intervene.
  Mr. Sheldon rose—
  Mr. Howard: I will not give way to the right hon. Gentleman.

  53
  The Leader of the Opposition told the House earlier in this debate:
  "there is a consensus that there has to be increased investment … in training".—[Official Report, 20 March 1990; Vol. 169, c. 1033.]
  He does not seem to have told his hon. Friend the Member for Derby, South (Mrs. Beckett), who told the House on 13 February that the only Labour promises were for increases in pensions and child benefits. Everything else, she said, is
  "something that we hope to do as resources allow."—[Official Report, 13 February 1990; Vol. 167, c. 179.]
  Well, perhaps the hon. Member for Sedgefield will enlighten us. Is training, as the right hon. and learned Member for Monklands, East said,
  "the area that stands out above all others"?—[Official Report, 21 March 1990; Vol. 169, c. 1132.]
  Or is it just one of many areas where Labour "hopes" to do more?
  Mr. Blair: If the Minister cares so much about training, perhaps he will now explain why £300 million is being cut from the youth training budget over the next three years.
  Mr. Howard: The hon. Gentleman may have overlooked the fact that, over the period to which he refers, there will be a substantial reduction in the number of young people coming on to the labour market. He may have overlooked the fact that employers have increased their contribution to youth training sixfold in the last two or three years and are expected to continue to increase that contribution. In overlooking those facts, he simply comes back with the knee-jerk reaction of the Opposition—that if any extra money is to be spent, it must come out of the taxpayer's pocket. That is the knee-jerk reaction that the Opposition always manifest when they make points of this kind.
  Mr. Robert Sheldon: Will the Minister give way?
  Mr. Howard: No, I am answering the right hon. Gentleman's hon. Friend, whose question would have considerably more force if he were prepared to tell us whether training is indeed a priority, as suggested by the right hon. and learned Member for Monklands, East, or simply one of the matters about which his party hopes to do more.
  There was a fascinating revelation in the House last week. The hon. Member for Dunfermline, East (Mr. Brown), under pressure from my right hon. Friend the Secretary of State for Trade and Industry, was forced to concede that the explicit pledge in the Labour party policy review to burden every enterprise in Britain with a training levy of 0·5 per cent. of payroll—in other words, a jobs tax—still stands as Labour policy. His remarks are reported in column 1259 of Volumne 169 of the Official Report for
  22 March.
  I hope that the hon. Member for Sedgefield—who might have the courtesy to listen—will therefore explain to the House in a moment why that pledge is not mentioned anywhere in his latest policy document on training, "Investing in Britain's Future". Did he forget to put it in? Does he think that an extra burden of at least £1 billion a year on British industry is not important? Or does he disagree with his shadow Cabinet colleague that it still represents Labour policy?
  Just to help the hon. Gentleman, let me remind him of what the hon. Member for Dunfermline, East said:
  54
  "of course the policy review proposals … are still this party's policies. The policy review was passed by the party's annual conference."—[Official Report, 22 March 1990; Vol. 169, c. 1259.]
  Mr. Dennis Skinner: Everything has been changed since then.
  Mr. Howard: The hon. Member says that everything has been changed since then. Perhaps his hon. Friend the Member for Sedgefield will tell us whether it has been changed since then.
  Will the hon. Member for Sedgefield go on the record today to make it clear that the Labour party is still committed, as the policy review states at page 19, to setting up an enterprise training council with guaranteed trade union representation at every workplace? Does he believe that, as the review says at page 19, creating over 1 million quangos stuffed with trade union snoopers to "guide" and "monitor" every company's training policies will really help the competitiveness of British industry?
  Will he explain why his new training policy document not only omitted both these policy review commitments but also, unaccountably, left out the pound sign" Perhaps it was merely a printer's error. Perhaps he will tell the House today how much Labour would spend on training. If his party has any claim to being taken seriously, it will give clear answers to these questions.
  The Budget strategy set out by my right hon. Friend offers the clear prospect of controlling inflation, of renewed growth, and of a productive economy capable of competing with the best in the world. It provides the long-term framework for business growth and for falling unemployment. It is therefore a Budget that has the best interests of all the people of this country at heart. I commend it to the House.
  4.59 pm
  Mr. Tony Blair: After that speech, the only promotion lying in wait for the Secretary of State is the chairmanship of the Conservative party. It was a quite remarkable speech of complacency. The right hon. and learned Gentleman failed to realise that the most significant political event last week was not the Budget but the crushing defeat of the Government and their policies by the Labour party in the Mid-Staffordshire by-election. That is a reflection on not merely the heavyweight nature of our victory but the lightweight character of the Budget.
  The Budget took refuge in small problems, because it shrank from the challenge of the large problems. Where it succeeded, it did so on issues that, although important, are not essential, and where it failed it did so fundamentally. That is why the cheers for it from Conservative Members were not echoed in the country. The gap between the popularity of the Budget in the Conservative party and its credibility in the country merely reminds us how great is the distance between the Government and the people whom they govern.
  We all support measures to help the blind, the Football Trust, the few children in workplace nurseries and the value added tax relief for small businesses, but the questions that the people asked the Chancellor were more profound. They asked why, if privatisation was supposed to mean lower prices, they are facing unnecessary and large price increases for water and electricity. They asked why, when many believed the talk of economic miracles two years ago and budgeted, planned and borrowed on

  55
  that basis, they now face the agony of rocketing mortgages and cuts in their living standards. They were promised that the Government's rating reform would be fairer and simpler, but they now see this Tory tax—the poll tax—as so unfair that it disgusts even those who gain from it and so chaotic to administer that even long-serving Conservative councillors have resigned rather than implement it. They asked why, but they received no answers to those questions, except a concession on the poll tax which was so incompetently handled that the Chancellor must be the first in history to give away £100 million but be politically worse off as a result.
  Business and industry demand an explanation of how, after 11 years of this Government, we have the worst balance of payments deficit in our history—a deficit in new and old industries—the highest interest rates in the western world, the highest inflation of any of the Organisation for Economic Co-operation and Development countries and why they are being told by Ministers of the hard road ahead and the tough medicine that we should take, as if they were newly elected and not in the second decade of continuous government.
  The Chancellor's forecasts show that unemployment may rise and that it is bottoming out at 1·6 million, or closer to 2 million on the old statistical basis. People recall that the Conservative party took office 11 years ago promising a reduction in unemployment, which was about 500,000 fewer than it is today. It should never be forgotten that this Government, alone among our competitors, have had the unsought bonanza of North sea oil. The money that could have been used in planning the seeds of our future prosperity was wasted.
  Our central charge is not just that the Government have squandered the opportunities of North sea oil and that they have committed serious errors of economic management but that, at best, they have neglected and, at worst, undermined Britain's industrial base and the long-term investment necessary for it.
  That is evident above all in training. It is generally agreed that the key to Britain's success as a wealth-producing nation will lie in the quality of the knowledge base of the economy—the training and skills of its work force. The balance of payments gap is a reflection and product of the skills gap. Compared with our competitors abroad, that huge gap is widening. In Germany, 90 per cent. of 16 to 19-year-olds are in full-time training, in Belgium the figure is over 80 per cent. and in the United States over 80 per cent. and in Japan almost 80 per cent., but in Britain it is between 65 and 69 per cent.
  There is an enormous gap between Britain and its competitor countries in the number of 16-year-olds who remain in full-time education. A report from the Confederation of British Industry found that British children are two years behind Japanese children in basic mathematical competence, that they have fewer foreign language skills than French or German children and that one third of our school leavers have no quaifications to show for their 11 years of education. In France and Germany, 90 per cent. of school leavers obtain some qualification of a standard higher than our 0-level. Thirty five per cent. of French students achieve university
  56
  entrance level. The figure in Germany is 30 per cent., yet in Britain it is 15 per cent.—less than half that of France or Germany.
  In Britain, about 100,000 young people leave school each year and take up work without any proper training. In many competitor countries, that would be unlawful and practically unthinkable. We demanded answers to those questions from the Budget.
  Not long ago, the Conservative party said that manufacturing industry mattered little and that we could get by without it. We no longer hear that said. France and Japan train two or three times as many people in mechanical, electrical and construction occupations as Britain. We need 50,000 craftspeople a year simply to catch up, but the gap is increasing. What is the Government's response? They want to curtail the activities of the engineering industry training board. In Germany, 2,000 more people obtain degrees in engineering, there are 15,000 more technicians and three or four times as many craftsmen—120,000, compared with our 35,000. My hon. Friend the Member for Knowsley, North (Mr. Howarth) mentioned apprenticeships. In Germany, the number of apprenticeships over the past 10 years has risen to over 800,000, whereas in Britain they are down by one third. This weekend, an analysis was published by the National Computing Centre which shows that by 1995 Britain will have a 50,000 shortfall in the skilled people necessary for information technology.
  The hon. Member for Calder Valley (Mr. Thompson) said that, in the textile industry, the Germans were industrial peasants. I shall read a report on textiles from the National Institute for Economic and Social Research. It compared the performances of Germany and Britain and concluded:
  "Over 80 per cent. of the German machinists in the plants we visited had completed a two or three-year day release course leading to an examination qualification similar to our City and Guilds course for skilled clothing employees. About 10 times as many pass such examinations each year in Germany as in Britain."
  Mr. Donald Thompson: We found that the Germans' courses were inflexible, incapable of training and inadequate for Britain's needs.
  Mr. Blair: The institute found that the courses produced higher qualifications than in Britain.
  In case Conservative Members think that that applied only to manufacturing or textiles, I carefully considered the position on retailing, about which a comparison has been made between France and Britain. In retailing in France and Britain—the service sector which the Conservative party says will provide this country's future—the institute found that standards were lower in Britain. Nine times more people obtained qualifications in retailing in France than in this country, and the qualifications obtained in Britain were lower. The same position can also be found in the hotel industry, another service industry.
  A recent study compared Britain with Germany, where similar numbers are employed in the hotel industry. It found that in the last decade, 35 per cent. of the staff in the hotel industry in Germany had craft-level qualifications, but in Britain only 14 per cent. of staff had them. Again, the qualifications in Germany were higher, broader-based and externally set and marked. Those qualifications gave rise to not merely a greater sense of qualification among those in Germany, but greater job satisfaction. It helps in every way to have the right type of training.

  57
  Training is important not just in manufacturing or services, but in management. According to the most recent studies, management training is of a lower standard in Britain than in West Germany. It is proper to make such comparisons because that is the very sort of country against which Britain is competing. If we are unable to compete on the basis of greater skills, it is axiomatic, and accepted on both sides, that we shall lose the race in the 1990s as surely as we lost it in the 1980s. Therefore, it is no wonder that the head of the Training Agency, Mr. Roger Dawe, has admitted:
  "At every level we are towards the bottom of the training league table, whether in education, youth training, higher level skills training or management."
  The Labour party does not decry the activities of British employers who train. Within our constituencies we all know employers who train excellently, but only a few months ago the Confederation of British Industry said:
  "Britain's skill levels are lower than those in most of its competitor countries and the gap is widening."
  It talked of a "quantum leap in skills" or what is called "a revolution" in skills. That is not the language of complacency, but the language of challenge, which was absent from the Secretary of State's speech.
  Even the former Secretary of State, the right hon. Member for Sutton Coldfield (Sir N. Fowler), described Britain's training position as "mindboggling" and said, as was headlined in Employment News a few months ago:
  "We have a mountain to climb".
  No wonder he did so; that B1 report on training in Britain showed that almost half the work force expected to receive no further training in their working lives, two thirds of all employees said that they had received no training in the past three years and 20 per cent. of employers gave no training. Therefore, according to the Government's own study, one in five employers are not training. When asked to describe the drawback of training, 38 per cent. of employers said that it was employees leaving for other jobs. The training study found that only one in four employers had a training plan and there was little evidence of planning in training.
  The position that confronts us today is, first, that we have a massive skills deficit; secondly, that deficit is in manufacturing, retailing, services and management training; thirdly, it is a deficit not merely in the quantity of training, but the quality; fourthly, the deficit is growing, not decreasing; fifthly, there are major deficiencies in attitude in certain sections of employees and employers. It is in those circumstances, and against that background, that we examine the Budget to discover what it provides to achieve a training revolution.
  The Budget offers a tax concession for employers who make charitable donations to training and enterprise councils. That is so modest a proposal that, where its cost should be listed in the Red Book, there is an asterisk because the cost is negligible. Less than £5 million is lost to the Exchequer through increasing the limits of the business expansion scheme, which is much less than the £120 million given away through the abolition of stamp duty on share transactions, and less than the £5 million cost of unchanged duty on pipe tobacco, the most expensive political joke in history.
  What is the Government's response to the call for a training revolution? On 6 December, the previous Secretary of State made a speech setting out what he called the "targets" that the Government should adopt for the
  58
  training problems faced in Britain. That speech was entirely in keeping with his description of the training
  position in Britain as mindboggling. He said:
  "By the end of 1992 no young person should be employed without training, two thirds should get to national NCVQ level 2 and one quarter of them to level 3, by 1995 all of them should be at least at level 2, half at level 3."
  At page 10 of his speech he said:
  "Unless we set ourselves those kinds of stretching targets, we shall not meet the need for upgrading and multi-skilling in a decade of continuing rapid change."
  We therefore asked the Minister to say how we were
  progressing towards those targets under the new Secretary
  of State. I received the following reply on 8 March:
  "My predecessor offered a framework of objectives for the development of training in the 1990s. Progress on meeting the objectives depends primarily on action by organisations outside Government; they cannot be specific Government targets."—[Official Report, 8 March 1990; Vol. 168, c. 804.]
  That was the first response of the new regime, and we heard it again today, which is why I intervened earlier.
  It is perfectly clear that we are now experiencing the classic Tory trick. When the Government come up against a problem that they cannot solve, they deny its existence. There has been a subtle but important change of rhetoric, and the Government are now talking about how well they are doing, whereas the previous Secretary of State accepted, as did many others, that the problem was serious, indeed mindboggling.
  The Government's second response is to cut the training budget. It is scarcely credible that against that background, and with the need for a training revolution, the Government should cut the training budget for young people by more than £300 million in the next few years —£150 million next year, £120 million the year after and £60 million in 1992–93. We are told that the reason for that is the falling number of young people and the fact that employers are carrying more of the cost. Surely we should see the falling number of young people as an opportunity not to cut spending, but to improve the quality of the training we provide. We should view the demographic changes as an opportunity to upgrade the level of Britain's skills, not cut them. Many training and enterprise councils will start by having cuts in their funding, cuts in spending per trainee and even cuts in spending per trainee week. It is not merely a cut in the overall budget, but a cut in expenditure on each trainee.
  Mr. Howard: What has the hon. Gentleman been doing since 13 February, when his hon. Friend the Member for Derby, South (Mrs. Beckett) said that the Labour party had only two firm spending pledges, pensions and child benefit, and for all other sectors it would merely have to
  hope and do as resources allow? Why does not he have a word with his hon. Friend?
  Mr. Blair: The right hon. and learned Gentleman should have read the speech more carefully. My hon. Friend called on the Government to restore the cuts in training. The last thing that any responsible Government should do is to cut training. How do we address the revolution in training by cutting training? In addition to youth training, we must also consider adult training. Adult training is critical because it is estimated that 80 per cent. of what will be the work force in the year 2000 are working now.
  At the business and cities conference on 6 December, the former Secretary of State for Employment said that by the end of 1995 all employers of whatever size should have

  59
  the seal of approval of the CBI for such things as training plans and upgrading the skills of their work forces. He added:
  "By not later than 31 December 1992, there should be in place a comprehensive and effective framework of sector training organisations capable of establishing and monitoring standards and capable also of providing information and advice to employers in their sectors about labour market and occupational trends and training techniques and technologies in use or development both at home and abroad."
  That would seem to be an enormous task.
  Mr. Robert Sheldon: I am grateful to my hon. Friend for giving me an opportunity to raise the question that I wanted to put to the Secretary of State earlier. It was a pity that the Secretary of State would not respond to me. When a new programme is announced, the Public Accounts Committee likes to know the clear objectives and, at the end of the programme, to compare the objectives with the achievements. I want to know how the Secretary of State plans to do that. As my hon. Friend the Member for Sedgefield (Mr. Blair) was saying, an attempt will be made to compare objectives with achievement within a set time scale.
  Mr. Blair: My right hon. Friend is absolutely right. It was extraordinary that in a Budget debate the Secretary of State would not give way to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) who is a Privy Councillor and the Chairman of the Public Accounts Committee. The Secretary of State was prescient in not giving way because the answer to the point raised by my right hon. Friend is that the Government are dumping the targets that the former Secretary of State set out in his important speech.
  We have been looking at the sector training organisations and we have used some of the parliamentary answers secured by my hon. Friend the Member for Newham, North-East (Mr. Leighton) who is the Chairman of the Select Committee on Employment. We have examined the comprehensive bodies that are supposed to provide a wide range of advice across the spectrum. The notion that we can provide such a sector training strategy with the kind of organisations listed in a written answer to my hon. Friend the Member for Newham, North-East on 5 March is frankly laughable.
  We have been checking up on some of the sector training organisations to discover what resources are available to them. Earlier I said that by the middle of the 1990s, we would have a shortfall of 50,000 in information technology. At present, the computer services industry training council covers 44,000 people and that number will soon increase to almost 300,000. At present, that council has five full-time staff. The national retailing training council, which covers 2·5 million people, has only five full-time staff, but that is more than many other councils. The United Kingdom Agricultural Supply Trade Association has only 1·25 people covering the whole association. Only 0·6 of a person covers the National Association of Master Bakers, Confectioners and Caterers. The idea that that amounts to a comprehensive sectoral strategy is, as I said, laughable.
  That is the background against which the Government are abandoning targets, making cuts and trying now to
  60
  deny the extent of the problem because they lack the will to solve it. That is the context in which the Budget's negligible contribution should be set.
  Mr. Howard: The hon. Gentleman has been addressing the House for nearly 25 minutes. Conservative Members have been waiting patiently for him to answer the questions that I put to him during my speech. When will he tell us whether the jobs tax still forms part of Labour party policy? When will he tell us what the Labour party would do?
  Mr. Blair: We would not be cutting the training budget when we should be investing more. We would be providing every young person with an entitlement to train. We would be integrating post-16 education and training, upgrading our qualifications and skills and ensuring that we have a proper legislative framework to ensure that training occurs in this country. We would ensure that there are sanctions against employers who do not train, because that is important. It is important that we set the kind of targets that are now being undermined by this Government's strategy.
  Mr. Howard: The hon. Gentleman has just made an extremely important statement. He has told us that the Labour party would impose sanctions on employers. What will those sanctions be?
  Mr. Blair: They are in the policy review. We will require a training investment contribution from employers that are not training.
  Mr. Howard: That is a jobs tax.
  Mr. Blair: If the Secretary of State believes that the mood of the country is one of complacency towards employers that are not training, he is wrong. It is vital that we have a policy to deal with the one in five employers who do not train. That is why the TECs were appalled at the decision to cut training funding.
  Of course employers must do more. To answer the Secretary of State's specific point, it is excellent that employers are showing more signs of commitment. However, as the employers admit, their contribution is in addition to, and not in substitution of, the Government's contribution. If TECs are seen simply as the means of the Government disengaging from their responsibilities, the whole project will fail.
  That is why the Budget does nothing for training. It does nothing for the plight of the millions of low-paid people. It does nothing for the problems of families living on reduced child benefit and it does nothing to alleviate the hardship of millions of our citizens who face the poll tax.
  As constrained as the Chancellor of the Exchequer was by the errors of the past—
  Mr. Hind: Will the hon. Gentleman give way?
  Mr. Blair: No.
  We were entitled to look in the Budget for some recognition of the long-term structural problems facing British industry. We now have a better chance than at any time in recent history to create the training revolution that we need. There is support for that everywhere; in industry, among the unions and, most crucially, among young people and those already in work.
  We, therefore, have a great challenge and a great opportunity. It is not the poverty of aspiration among the

  61
  British people that we need fear, but the poverty of aspiration of the Government. As the Conservative party's position crumbles and Conservatives begin to fight the Tory party's internal battles because they have lost the battle for the electorate, the Labour party will look forward with enthusiasm to meeting the challenges ahead, not as critics in a Labour Opposition, but as Ministers in a Labour Government.
  5.29 pm
  Mr. Nigel Lawson: I shall be brief. Partly for that reason, I shall not follow the debate that we have just heard about training, but will talk about matters more closely related to the Budget which we are debating today. I have to say on the subject of training that there is agreement on both sides of the House of its importance— there is no doubt about that.
  I have to confess that I was astonished by one omission throughout the speech by the hon. Member for Sedgefield (Mr. Blair). Not once did he mention the vital correlation between the amount of training done by business and industry and the profitability of business and industry. Those things are intimately connected. It was the abysmal levels of profitability of British industry in the 1970s that led to the very low level of training at that time. It is the recovery in profitability which has occurred during the 1980s and which will continue, I trust, during the 1990s which is so important for all our aspirations in the future.
  I should like to commend my right hon. Friend the Chancellor of the Exchequer on his Budget. I commend it not least because of his rejection of the clamour that there was in some quarters for a massive increase in taxation. That would have been wholly misguided. He was right to resist it. I would like to quote his words from the Budget statement:
  "fiscal policy is not … a flexible instrument which should be altered to meet short-term contingencies. Fine-tuning fiscal policy is not only disruptive to the public sector, but business, and to taxpayers, but its effects on the economy are uncertain and often destabilising."—[Official Report, 20 March 1990; Vol. 169, c.1015.]
  I entirely endorse that judgment.
  After all, in this country—let nobody forget it—we have a very strong fiscal position indeed—one which is the envy of most of the rest of the world. Given the inheritance, it took us quite a long time to get to that position. Having got to that position, we must and will stick to it. Within that context, tax changes should be driven by long-term supply side considerations and not by the short-term requirements of so-called demand management. Tax reform, which is of such importance, has a beneficial effect on economic behaviour and economic performance only to the extent that it is believed that the changes that are made will endure. That is why my right hon. Friend is right. But, in that context, of course, it follows that the task of bearing down on inflation must continue to rest, as it has rested before, with monetary policy. Again that is something which my right hon. Friend fully acknowledged, but I have to say that that is where my doubts creep in.
  Let me hasten to say that I am not referring to the incentive for the expansion of broad money which my right hon. Friend introduced, bearing in mind the fact that broad money is principally composed of deposits in banks and building societies. I have no quarral with that, even though I know that one or two of my hon. Friends might find that somewhat paradoxical. No, the danger—the
  62
  concern—lies with the exchange rate, for it is the exchange rate which threatens to undermine the strength of the Government's monetary policy, the strength of the discipline imposed by uncomfortable but necessary levels of interest rates.
  Again, that is something which I know my right hon. Friend himself fully acknowledges. He himself said in his Budget statement that he favoured a strong exchange rate policy—quite right. It was a very important statement, but it may be that words alone will not be enough.
  We have already seen that, since interest rates were raised to 15 per cent. as far back as last October, the exchange rate—the index—has lost about 5 per cent. of its value, and any further drift would clearly imperil the strength of the Government's commitment against inflation and their anti-inflationary policy. That is the one area of concern which I have.
  What is the solution? Where do we go? Again, my right hon. Friend, in his Budget statement and again in his broadcast yesterday, very firmly restated the Government's commitment to sterling joining the exchange rate mechanism of the EMS. But my concern is that the timetable which is envisaged by the Government might be somewhat too leisurely for the circumstances in which we find ourselves. In my judgment, it is a pity that we did not join some time ago, but we did not, and that is that. But now we really cannot afford to take the risks involved in a leisurely timetable.
  It may be that we should initially join within the framework of the wider bands before subsequently moving to the narrower bands, but the whole of the Government's commitment against inflation is potentially at risk. There is an exposed flank, and that is why I could favour the early entry of sterling, as I said, possibly initially with the wider bands, into the exchange rate mechanism of the EMS.
  There is a further reason, too, Incidentally, it is far less important even than the increased influence that we would gain within the Community—influence which is particularly important in the context of the debate on European monetary union, in which I wholly and unreservedly support the Government's stand. It is important, too, as we come up to the intergovernmental conference, to discuss this in December of this year.
  But there is another reason, too. As I listened, as many hon. Members did, to the speech by the right hon. and learned Member for Monklands, East (Mr. Smith) on an earlier day of this debate, it was abundantly clear that the Labour party has no alternative coherent policy whatever—none whatever. Yet the right hon. and learned Gentleman is seeking to conceal it and, to some extent, he has been successful with the media. He is seeking to conceal it by regular repetitions and incantations about the EMS and joining the exchange rate mechanism of the EMS. It is by removing the fig leaf from the Opposition that the true nakedness of their policy and the ugliness of what is revealed will be seen by all. That is devoutly to be wished.
  We, of course, have a clear and coherent policy which, despite current difficulties, has brought the people of this country unparalleled improvements over the past 11 years. It must continue to do so, and it can continue to do so, but it will continue to do so only if that exposed flank of the exchange rate is protected. That means early entry into the exchange rate mechanism of the EMS. Of that I have no doubt whatever.
  5.38 pm
  Mr. Paddy Ashdown: I am sure that the whole House and many people outside will have listened to the very interesting speech by the right hon. Member for Blaby (Mr. Lawson), the central portion of which I enthusiastically agree with. My hon. Friends and I have been arguing for some time that our early membership of the exchange rate mechanism is necessary for Britain's proper economic management. It is even more necessary now. As the right hon. Gentleman said, there is a great hole in the centre of the Budget, and that constitutes the exposed flank of the whole budgetary strategy.
  As the hon. Member for Sedgefield (Mr. Blair) has said, it seems odd to reflect that the Budget was less than a week ago—so much has happened in between. Returning to the Budget debate after last week's events seems a little out of kilter with the mood. However, that is not the whole case, because at the heart of the Budget debate is a lack of any commitment to the strong economic policies that the Government have talked about in the past. That is the same lack of confidence, lack of direction and confusion that has characterised the Government's policy in the past few weeks, and for which they paid a heavy penalty on Thursday and continue to pay a heavy penalty in the opinion polls.
  That is not to say that we do not recognise the difficult circumstances in which the Chancellor had to frame his Budget. It was a difficult calculation. Britain stood and remains on a knife edge between high and possibly double-digit inflation on the one hand and a recession on the other. The speech of the right hon. Member for Blaby might have been better received if he had shown a little humility about leaving his successor a legacy of serious problems to address.
  Those legacies can be put in the form of three questions. First, who runs the economy? Is it No. 10 or No. 11 Downing street? We all know that that is the subject upon which the right hon. Member for Blaby offered his resignation. Secondly, what is the Government's policy? That matter has been left confused and unclear in the past few months and is, in large measure, the reason why there has been a good deal of uncertainty in the money markets about the Government and the exchange rate. The third question is, what will the Chancellor do to address the problems that are the legacy of the past 10 years and, at least in part, of his right hon. Friend the Member for Blaby? What will the Government do, for instance, about the fact that, far from a Thatcher economic miracle, we are close to a Thatcher economic nightmare?
  We have the highest inflation of any of the major OECD countries. We have a record that goes back for the past 11 years in which, far from tackling inflation, our rate of inflation has been higher than the average of the EC countries, inside and outside the EMS, for seven of those 11 years; it has been higher than the average of the OECD countries for eight of those 11 years, and higher than those of our major competitors for 11 out of those 11 years. If the Government are making the case that inflation is the judge and jury, they are guilty of having totally failed to tackle it.
  One might also judge the country's economic position by the fact that wage rises here are now racing ahead of inflation and are rising much faster than those of any of our major competitors. One might also judge the economy by the fact that, as a percentage of GDP, investment
  64
  briefly blipped, to use a favourite word of the right hon. Member for Blaby, above its level in 1979—a full 11 years ago—for just a few months last year but, according to all accounts, is now plunging hard under the high level of interest rates. By the by, our interest rates are higher than those of any of our competitor nations and are very close to a record for this nation.
  Presiding over all that is the fact that, throughout the past decade, Britain's share of world markets has continued to decline at a rate not dissimilar to that experienced throughout the two previous decades. We now have a balance of trade deficit of record proportions. Those were the problems that the Budget had to address.
  If the Budget sought to answer those three questions—who runs the economy, what is the Government's policy and what firm action will they take to address the serious problems now facing the British economy—it provided an answer that was at best confused and at worst unconvincing.
  The Government's policy is still unclear. I cannot see any thread running through it, except for the Chancellor's rhetoric that he wants to keep inflation down. But that was immediately followed by an admission that inflation would increase in the next few months. We heard only a few vague promises and prophecies beyond that. We have learnt to mistrust the Government's prophecies about inflation or anything else, because they are all remarkable for the fact that they are all breached by substantial margins.
  Who runs the economy? Is it really the case, as the right hon. Member for Blaby said, that in his heart of hearts the present Chancellor believes that we should join the exchange rate mechanism now? The resignation speech of the right hon. Member for Blaby was splendid. It was one of the best speeches that I have heard in the House. In it we learned that the right hon. Gentleman had consistently argued around the Cabinet table for joining the exchange rate mechanism and that the Prime Minister was the one who had said no. We had a hint a moment or two ago that the same conditions obtain around the Cabinet table today, and that the Prime Minister is preventing that important lacuna in the Government's policy from being filled. If that is the case, the question of who runs our economic policy remains as unanswered now as it was in the days of the previous Chancellor.
  If the Government's major thrust is to tackle inflation, I fear that, as has been said, the Chancellor is playing with very high risks. Whatever happens externally, his present strategy leaves him no room for manoeuvre, except to raise interest rates. In short, where we needed a Budget that was tough, with a broad thrust that the public and the markets could understand, we got a Budget that was full of minor measures, which, unless the Government are very lucky, will fail to face up to the major problems that now confront us.
  The reality of the Budget was very different from the hype and the descriptions that preceded it. We were told that we would get a lion of a Budget; but the Chancellor produced a mouse. The inadequacies of that mouse of a Budget were cruelly exposed by the reaction of the City and the foreign markets.
  Of course the minor measures were welcome—who would not welcome some of the things that the Chancellor did? We had been calling for some of them for some time, as had his own Back Benchers and the Opposition. I refer

  65
  especially to measures to encourage women back to work. I found it odd that in pouring some scorn on that the hon. Member for Sedgefield—
  Mrs. Margaret Beckett: Barbie dolls.
  Mr. Ashdown: If the hon. Lady would like to intervene, I shall be happy to give way to her.
  Mrs. Beckett: I am grateful to the right hon. Gentleman for giving way. I find it difficult to square his wise words about the value of women in work with his most ungenerous remarks about my hon. Friend the Member for Mid-Staffordshire (Mrs. Heal).
  Mr. Ashdown: I am not quite sure what that has to do with the debate, but as the hon. Lady has questioned me about this—as I suspected she would—I ask her to look again at my comments. I was not making a comment about that hon. Lady; I was commenting on the disgraceful way in which the Labour party would not allow a Labour candidate to speak for herself. She was treated as a Barbie doll by Walworth road. The sexist comments and approach of that manifesto are a disgrace; they completely undermine the Labour party's rhetoric about being in favour of women in society and in politics.
  However, if I was to go further down that line, no doubt you, Mr. Deputy Speaker, would call me back to order. Therefore, I turn to the central question of the welcome steps taken by the Chancellor.
  As I was saying, it is odd that the hon. Member for Sedgefield said, somewhat contemptuously—I tried to note his exact phrase—that the Chancellor's measures would bring back to work only "a relatively small number" of women, because not many workplaces have nurseries. Unless I am mistaken, the Chancellor has precisely followed Labour's policy on this matter. Presumably, therefore, if the Chancellor's measures will bring only a few women back to work, the Labour party's measures would bring only a small number back as well.
  Mr. Blair rose—
  Mr. Ashdown: I shall give way to the hon. Gentleman, but I ask him to consider what my party has proposed, which is to issue vouchers that could be used whether or not there are workplace nurseries. Will he do that? I happily give way to him.
  Mr. Blair: The right hon. Gentleman keeps saying that I treated the provisions on workplace nurseries contemptuously. That is entirely untrue. I was merely saying that they do not affect many people.
  Mr. Ashdown: Then the criticism that the hon. Gentleman levels against the Government must be levelled against his party's policy, in which case it is odd for him to make it.
  The Chancellor's proposals on savings are also welcome, although TESSA has a 1960s or 1970s flavour. According to the last figures that I saw, the level of debt has gone up from about 1·5 per cent. of average household income to 8 per cent. of average household income, whereas savings have dropped from around 12 per cent. to about 5 per cent. Therefore, I wonder how much money there is around to be put into new saving instruments and to what extent TESSA will be used simply to transfer savings from one account to another. The move and the
  66
  instrument are welcome, but will they achieve what the Chancellor wants? If it did, that would be advantageous, but I doubt whether it would. Let us wait and see.
  The Budget failed significantly in its central thrust. As the right hon. Member for Blaby said, the hole in it is its lack of entry into the ERM. That could, and should, be the rock upon which the Government base their anti-inflation policy. It is the mechanism by which the Government could give themselves room for manoeuvre. It is true that, were we to join the ERM, that might take the pressure off the pound and enable us to bring down high interest rates, which would be beneficial. However, it would also release money into the economy, which might be inflationary. That is why my right hon. and hon. Friends and I have recommended that the Government should be prepared to alter national insurance contribution rates and mortgage interest tax relief rates, so as to take about £2 billion out of the economy.
  The Government have argued that we cannot afford to join the ERM because our inflation rate is too high. It is a matter of fact that our underlying inflation rate is around 6·2 per cent. of the RPI, whereas the average rate of countries within the ERM is around 5 per cent. Spain went in, on the broad band rate suggested by the right hon. Member for Blaby, with an inflation rate of around 7·1 per cent. There is not a serious problem—it is an excuse for the Prime Minister to prevent us from joining the ERM because of her personal prejudice and passion against anything European, and in particular the ERM. As somebody else has said, it is simply an elegant way of saying no. I have a strong suspicion that the timing of entry into the ERM will be tied to the timing of the removal of the right hon. Lady. It will not happen unlit she goes.
  Again, the Labour party shows a depressing lack of understanding and clear commitment about what it wishes to do about the ERM. The right hon. and learned Member for Monklands, East (Mr. Smith) has said that the Labour party would like Britain to enter the ERM, but the Labour party's conditions for that remain unchanged. It has given us no idea what those conditions now amount to. It has said that we need to go in at a competitive rate. Perhaps the hon. Member for Derby, South (Mrs. Beckett) will tell us what that competitive rate will be. Is it a devaluation?
  The second condition made by the Labour party is that there should be reflationary policy. It knows perfectly well that such a thing is simply unacceptable under the present conditions of the ERM, and the Bundesbank would never buy it for a moment.
  Mr. Radice: What a load of rubbish.
  Mr. Ashdown: If the hon. Gentleman wishes to intervene, I am happy to give way.
  Mr. Radice: My party has made it clear that we are talking about negotiating objectives. If we were in government now, we would immediately want to negotiate our way into the ERM. That is a different position from that of the Government, who are not prepared to go in at all—certainly not while they have the present Prime Minister.
  Mr. Ashdown: The hon. Gentleman is making it clear that his party—I suspect that he has different views—wants to turn the ERM into a reflationary club. None of the other members of it would tolerate that.

  67
  The position of the Government and of the Opposition are almost exactly the same. The Government argue that they will not go into the ERM until inflation is down to the level of that in Germany, while the Labour party argues that it would not go into the ERM until the Germans risk putting their inflation rate up to the same as ours. There are equally clear ways to say, "We ain't gonna do it." It is inadequate and untruthful for the Labour party to claim that it has a stronger desire than the Government to go into the ERM.
  Mr. Flannery: The right hon. Gentleman will never have to face this problem, because he will never lead a Government.
  Mr. Ashdown: The hon. Gentleman ought to realise that the biggest failing of his party is that, although it has become successful in opposing, it says nothing about the policies that it would introduce were it in government. The hon. Gentleman and his party are failing Britain today, although they have a real opportunity to remove the Government. They lose that opportunity by the day, because they fail to put forward proper policies. Anybody who heard the Leader of the Opposition last Friday on the "Today" programme explaining what his economic policy would be and could divine from that extraordinary collection of platitude and waffle anything that constituted something like an economic policy was capable of a divination of a high degree. The Labour party has a real opportunity to defeat the Government, but it will not do so by putting forward vacuous policies that amount to nothing.
  The Budget fails in other areas. It does not realistically address the necessary steps open to the Government to protect the environment. From this Budget, I have come to the conclusion that the environment was an electoral toy with which the Prime Minister has played around and in which she has now become disinterested. The Chancellor claimed that this is a fiscally tough Budget, but we have to ask whether the £500 million that the Chancellor is taking out of the economy by bringing more people into the higher band of taxation is not more than compensated for by the £1,000 million that will be released into the economy by independent taxation. That is the moot point.
  This is a weak Budget and, unless the Government are very lucky, it will be inadequate to solve the problems that confront us. The Budget does not deal seriously with those problems. It shows complacency. It is built on hope, not on solid policies. If the Government were true to their rhetoric, they would be taking risks with the Conservative party's support in the short term so as to ensure the country's stability in the long term. Instead, the Chancellor has taken risks with the economy in the long term in a vain attempt to restore the Conservative party support in the short term. We now need a party committed to free enterprise, to a just competition policy and to taking the necessary hard actions to tackle inflation. We need a party that understands the importance of Europe in that strategy, and in particular the importance of the ERM.
  There was a day when some—not all—of those attributes could be claimed by the Conservative party, but not after this Budget. In it, the Chancellor takes high risks with the future. He has hoped that everything will come
  68
  right. This Budget makes the point at which the Conservative party lost its nerve. If it now loses its luck as well, the price of the Budget will be high for the Conservative party, but higher still for Britain.
  6 pm
  Sir William Clark: The right hon. Member for Yeovil (Mr. Ashdown) made an extraordinary speech. All that he has to offer is immediate entry into the European exchange rate mechanism. He ended his remarks by falling out with the Opposition, not with the Government. It was an extraordinary performance and I might come back to it later.
  I congratulate my right hon. Friend the Chancellor of the Exchequer on the presentation of his maiden Budget. I think that hon. Members in all parts of the House will agree that his presentation was perfect. I believe that he gave us the right Budget. It has been overlooked that my right hon. Friend the Member for Blaby (Mr. Lawson) left a legacy of separate taxation of husbands and wives. That will benefit about 3 million people. I am sure that none of us will forget the achievements of my right hon. Friend the Member for Blaby.
  My right hon. Friend the Chancellor of the Exchequer had a difficult decision to take. He could have gone for overkill or underkill. In the event, he presented a roughly neutral Budget. He did not opt for overkill because, obviously, he did not want to risk recession. The Budget achieved about the right balance. I agree that the City's reaction was not all that favourable, but I am sure that hon. Members who have connections with the City will agree that there seems to be too much computerisation. Far too much time is spent looking at "boxes". When the programme says sell, they sell. When it says buy, they buy. Sensitivity, on other occasions a lack of sensitivity, and instant statements have an effect on our currency.
  The hon. Member for Sedgefield (Mr. Blair) did his best to denigrate the economy, but it cannot be all that sick when we consider the amount of foreign investment that comes into the country weekly. The Japanese, the Germans and the Americans, for example, are confident in investing in Britain. We must not over-react to the fears that some express. We must not panic ourselves into entering the exchange rate mechanism. There are those who suggest that the ERM is the panacea for all our ills, and the right hon. Member for Yeovil is at the fore of that group. My right hon. Friend the Chancellor of the Exchequer was right when he said in his Budget statement that we shall join it. It is only a question of when. There are more complications now, because we do not know what will happen with monetary union in East Germany and West Germany. The ostmark will be made convertible with the deutschmark or will be swapped with it. Helmut Kohl apparently took the decision to promise to swap and the Bundesbank did not want to have anything to do with it. So much for the so-called independence of the Bundesbank.
  There is no doubt that the policy of my right hon. Friend the Chancellor of the Exchequer of a 15 per cent. base rate has slowed down spending and had an effect on the price of housing. Hon. Members on both sides of the House must accept that. No one has mentioned the fact that our exports are increasing. They increased by 11 per

  69
  cent. year on year and imports reduced by 1 per cent. three months on three months. We shall not see a miracle overnight, but the trend is favourable.
  The Opposition are keen on credit controls as a means of controlling expenditure. How we could have credit controls without a reintroduction of exchange control is beyond me and, I should think, beyond most people. If the Opposition say that they want credit controls, that means that they are committed to the reintroduction of exchange control, and that goes against the EEC. One of the Madrid conditions of the United Kingdom's joining the exchange rate mechanism is the abolition of exchange controls throughout the Community. If the United Kingdom is to introduce credit controls and then have to reintroduce exchange control, how is it credible for the Opposition to say that they would join the EMS? Their position is illogical.
  I welcome the repayment of the national debt. About £25 billion has been repaid over the past two or three years, which has saved us about £2·5 billion a year in interest payments. I suggest to my right hon. Friend the Chancellor of the Exchequer that we should not over-rush the repayment. That would make credit far too easy for any Government. My right hon. Friend has discouraged borrowing to spend and I welcome, as did the right hon. Member for Yeovil, the concept of the tax-exempt special savings account. I believe that it will prove to be a success. Personal equity plans are extremely valuable, but there has been a tremendous switch from various forms of investment into PEP.
  There was some new money, but not as much as was wanted. The catchment area for savings that we should target is the person with an income between £20,000 and £30,000 a year. That sort of person will find TESSA extremely good. My right hon. Friend the Chancellor of the Exchequer has said, in effect, "If you want to spend money and you do not have that money, the cost of borrowing it will be high." That has stopped a good deal of spending, but there are those who do not have to borrow to spend, and those people will find TESSA especially attractive. There is tremendous potential, especially when we consider that there are about 11 million shareholders. Two out of every three families own their own house. There are many more people now, compared with 1979, who have something to conserve.
  I regret that action was not taken on disincorporation. A family business pays capital gains tax on whatever assets it may sell. When the family tries to get the money out of the family company, it has to pay capital gains tax again. It is double taxation. I remind my right hon. Friend the Chancellor of the Exchequer that about two years ago a discussion paper was produced. It has been discussed, and I understand that many representations have been submitted to the Treasury. I hope that my right hon. Friend will let me know what is happening.
  I am struck by the absence of suggestions or options from the Opposition. It is worthy of an entry in the "Guinness Book of Records". During the by-election campaign in Mid-Staffordshire the Labour party did not hold a public meeting. No answer was given to any question asked. Surely the Opposition do not think that they will be able to adopt the same stance at a general election. Do they think that it will be sufficient merely to make vague statements attacking the Conservative party's policies? That would be a con trick on the electorate.
  70
  Before 1979, many U-turns were made to the detriment of the economy and, incidentally, to the detriment of the Conservative party politically. We must go for the long-term future of the country. Of course, we are extremely unpopular at the moment, but there is no point in trying to relax polices just to gain votes. There are some rough seas ahead, but my right hon. Friend is on the right track. If he stays on course, we will succeed.
  6.10 pm
  Mr. Robert Sheldon: The hon. Member for Croydon, South (Sir W. Clark) thinks that the Budget judgment is just about right. It is hard to get a Budget judgment just right, and the Chancellor bears an awesome responsibility for that.
  I share one sentiment with the right hon. Gentleman, which is his admiration for Jain Macleod. My view on the Budget judgment follows that of lain Macleod. His beliefs are not mine, but his approach to political life and the standards that he held earned him the respect and regard of many people outside his party. It is more than 20 years since he said that the Budget that was cheered on the day that it was delivered tended to look rather different later. I and many others made similar points, even before that occasion. I am sure that we could go back to the last century and find similar views. However, rarely have we seen the waving, cheering and shouting that occurred at the end of the Budget statement last week, which was then repudiated by so many the following day. The poll tax remained a problem and there was a failure to deal effectively with the pound, which resulted in Bank of England intervention.
  The Chancellor was generous to his right hon. Friend the Member for Blaby (Mr. Lawson). He did not blame him for his inheritance—and in these rather less scrupulous times, he earned the respect of some of us for that. The right hon. Member for Blaby thought that the exchange rate mechanism was enormously important. The reduction of inflation is the Government's principal objective, which the Chancellor confirmed in his Budget statement. The right hon. Member for Blaby thought the main way to achieve that objective was through the exchange rate mechanism. Having been denied the use of that method, it was honourable of him to resign. The present Chancellor may face a similar problem in due course.
  I wish to pose two questions about the Budget. First, was it tough, and secondly, was it directed towards a general election in 1991 or 1992 or towards our economic problems? The answer to the first question came the following day with the problems of a declining pound. All Chancellors face that problem because to show toughness towards those on whom they depend to retain the value of the pound means that they frequently have to do things that they do not like. Pressures were constantly placed upon the last Labour Government to increase prescription charges. That was unimportant economically, but it showed that we were anxious to satisfy the market and do those things that we disliked most. The parallel for this Government is an increase in income tax. It may not have meant a great deal in terms of withdrawing sums of money from demand, but doing what they disliked would have shown the seriousness of the Government in their attack on inflation.

  71
  In view of the Government's difficulties in trying to engineer a recession, it did not make political and economic sense to have the pre-election boomlet in 1988. It could not be avoided because the decision was taken in the light of other matters about which the then Chancellor could not convince the Government. The Government's difficulty was simple—they wanted to engineer a recession but could not do it. They have been trying to do that for more than 18 months. In the past, the simplest way to achieve that would have been to increase taxation and Excise duties and so reduce demand, but they did not do that. I understand the difficulty with VAT, because it is a simple tax of 15 per cent. It is not as easy to change it as it was to change purchase tax. However, income tax was readily available, but the Government did not know how to deal with the ghosts of the past.
  The Government were left with just one club because all the others had been thrown away. Credit restraint might have sent the right signals. Although it might not have meant a great deal in theory, we should not underestimate the importance of such actions in practice on markets and individuals. Having been trailed for more than 18 months—and I believe that we are now heading for a real recession—such action may not now be worth resurrecting. It would have been available, but the opportunity was missed.
  Only the day after the Budget, I received another massive credit offer, almost geared to the Budget, asking me to borrow some more money. The problem is that we are relying on interest rates, which also increase the income of savers. Although those who borrow lose during the time of high interest rates, those who save gain. We are not sure of how much those who gain then spend.
  Mr. Denzil Davies: Does my right hon. Friend agree that it is a terrible condemnation of the Government that, even with such high interest rates, which mean high interest for savers, the Government still had to give tax subsidies to savers?
  Mr. Sheldon: The Government were in a dilemma. Everyone knows that they should have increased income tax. They could also have done more with Excise duties last year, but that time has now passed. It is usual to increase taxes if we want to reduce levels of inflation and demand. The Government were boxed in; they had only the one club and they did not use it wisely.
  Borrowers spend less, but lenders may spend more because of the increased interest on their savings. The problem with soaring house prices is that more and more people spend up to the level of their income, fully satisfied that they can afford it. Many people feel that they need less money for a rainy day because the value of their house represents the savings that people used to make in the Post Office, with saving certificates, and so on. They now believe that they have a valuable cushion, so if they find themselves temporarily short of money, they borrow against their house to maintain their standard of living. The more the Chancellor tells them that there are good times around the corner, the more readily can they justify that borrowing, which they will believe will be short term.
  72
  The medium-term financial strategy states that the central objective is the defeat of inflation. I have the 1980–81 financial report—which I treasure—by the right hon. Member for Blaby. The very first sentence states:
  "The Government's objectives for the medium term are to bring down the rate of inflation."
  The Government have been in office for 11 years. What is a medium-term financial strategy? According to the current Red Book, it will be another four years before inflation significantly reduces. It is the longest term medium-term financial strategy that I have ever known.
  The proposed solutions are similar to what they were 10 years ago. The Government produced the figures for the money supply decreasing year by year until the magic year four years on. It is now four years on and the figures are the same. Who believes them now? The price rises in 1974, about which the Prime Minister makes something every Question Time, were due to the quintupling of oil prices.
  Page 11 of the Red Book states:
  "Reductions in marginal tax rates have increased incentives to work and save, and improved the quality of investment."
  I wish that were true. Not long ago I went to the opening
  of a bank that had carpets up the wall. Another bank had leather lining the whole of its office space. Banks get the same investment and capital allowances as anybody who buys plant and machinery. They get a 25 per cent. reduction in the first year. Plant and machinery is worth more than that. That is the problem.
  Page 11 talks about
  "A firm fiscal policy … Frequent … changes … are harmful."
  I am not sure that that is so. The right hon. Member for Blaby pointed out that tax changes should be rare, and, presumably, always downwards. Why should he have that view about tax changes? What is so holy about them? Why should they not be used for short-term alterations in people's perceptions? Why should that be left to interest rates? We never heard such an argument previously. Perhaps the Chancellor of the Exchequer will deal with that.
  The Chancellor has said that he does not want to reduce interest rates because he may have to increase them again. Why should they not be used in accordance with varying circumstances? We know that he believes in short-term changes, so why should he deny himself this particular opportunity? When in the Red Book he says that monetary growth is excessive with
  "too much money chasing too few goods,"
  it sounds suspiciously like demand management as I used to know it. Indeed, I cannot see any difference between that formulation and demand management. With all those qualifications for money supply, is there a monetary policy at all? It is like reading tea leaves. If we see a forest or a baby in the tea leaves, we can justify it. The justification for the money supply is the same.
  My second question was whether it was a Budget for the economy or for the next election. It was a balancing act and I am not sure that the Chancellor will reach the end of the tightrope safely. In 1988 the goodies were handed out too early to the Government's friends. It is a pity that they were not handed out more fairly. It is normal to hand out goodies nearer to a general election. If the Government did that for political reason, they got it wrong, and if it was for economic reasons, they also got it wrong. The inheritance— the Chancellor is kind not to refer to it—meant that the boom came at the wrong moment.

  73
  With a deficit of £21 billion a year, we have to appear a safe haven for overseas borrowing. That meant a hard Budget, but with an election only two years away it also meant that politically the Buget could not be as harsh as those who lend us money would like. Therefore, the answer to whether this is a harsh Budget is that it is not hard enough for overseas investors, and the markets expressed their anxieties.
  In his Budget statement, the Chancellor said:
  "I favour a strong exchange rate."
  That is not a ringing declaration, if one is trying to calm the nerves of those who deposit money here. Overseas investors look at these matters day by day because they know that once that commitment is not expressed, it is time to withdraw their money.
  The Chancellor of the Exchequer (Mr. John Major): I appreciate the graciousness with which the right hon. Gentleman makes his remarks. Is he aware that, although it is true that sterling fell the day after the Budget, it has since risen and is now higher than when I rose to deliver the Budget speech?
  Mr. Sheldon: We must see first the amount of intervention by the Bank of England, and secondly, the long-term reaction of the markets as the Budget affects them.
  In his Budget statement, the Chancellor said:
  "I am confident that the period of low growth will be short-lived—not least because of the permanent improvements in the underlying economy in the 1980s."—[Official Report, 20 March 1990; Vol. 169, c. 1011-14.]
  Comparing 1979 with 1990, what are the permanent achievements? In the last full year of the Labour Government the balance of payments stood at plus £5 billion, whereas last year it was minus £21 billion. The non-visible balance is disappearing. In May 1979 inflation was 10·3 per cent., whereas in 1980 it was 21·9 per cent. That was not because of the quintupling of oil prices, but partly because of the doubling of VAT. Is there a permanent improvement? Inflation will increase to 9·5 per cent. as against the Labour Government's 10·3 per cent. Since the 1950s output has fallen only under this Government. In Tameside and Stockport we had 20,000 skilled engineers; now we have only 5,000. Questions about skills remain supremely relevant. Where is the permanent improvement?
  Mr. Barry Field: Will the right hon. Gentleman tell us the productivity of those 5,000 engineers compared with the 20,000? In most cases they now have multiple-headed machines and computerised lathes which have increased output.
  Mr. Sheldon: The difficulty is that total output has fallen in those engineering companies. Their output is not what it used to be. More important, companies are crying out for skilled engineers. There is a shortage.
  If there is a permanent improvement in the standard of living, how is it achieved? North sea oil revenues are £85 billion which has an effect on the balance of payments. We have to borrow to maintain our standard of living and sell our assets—£5 billion a year—to maintain our standard of living. Is that a permanent improvement? What happens when there are no assets to sell? The average family paid 35 per cent. in income tax in 1979, whereas now it is 37 per
  74
  cent. Is that a permanent improvement? In 1979 unemployment was just over 1 million whereas today it is 2 million.
  According to the Prime Minister recently, France is an economy to aspire to. In 1979 we would have been insulted if it was suggested that we should aspire to the French economy. We now find that, according to the European Commission and the Organisation for Economic Co-operation and Development, Italy has a greater level of production than Britain. Will we have to aspire to Italy? Are we going to continue to go down and to aspire to the performance of countries that we thought we had long since overtaken, in the 17th and 18th centuries? The permanent improvements, in the underlying economy which the Government boast about do not exist. Industry has suffered. There is no doubt that it has suffered in my constituency, and I feel it greatly.
  If we had made those sacrifices for the benefit of permanent improvements, we could have borne them and accepted them willingly, but we find that the sacrifices have been in vain. We have wasted years and this Government will shortly come to an end.
  6.30 pm
  Mr. Terence L. Higgins: I join those hon. Members who have congratulated my right hon. Friend the Chancellor on his presentation of the Budget. He is a new Chancellor, the Budget was being televised for the first time, and he had remarkably little scope for manoeuvre in the Budget, but he performed his task with considerable distinction and he put forward his proposals with great cogency. I join those hon. Members who have wished him well.
  In his opening remarks the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred to a statement by the late lain MacLeod—with whom I had the privilege of sitting on the Opposition Front Bench and on the Government Front Bench before his untimely death—to the effect that if a Budget looked good on Budget day it was often viewed differently by Second Reading. He also said that it worked both ways, and that if a Budget did not look good on Budget day it might look better by Second Reading. Since my right hon. Friend's Budget was received with reasonable appreciation, it will continue to be so received in future.
  I welcome a number of my right hon. Friend's proposals, in particular the abolition of the composite tax rate for building society accounts, which will mean that many of my poorer constituents who have previously been paying income tax in that form but in no other will no longer be subjected to it. Those people who ought to pay the full rate of tax will do so.
  I welcome what my right hon. Friend the Chancellor said about savings and the proposals that he made on that subject. I also welcome the fact that he raised the lower threshold for income tax but not the higher rate threshold. That shows a regard for people on low pay, despite the fact that many people, in anticipating the Budget, did not believe that he would do such a thing.
  I welcome the increases that my right hon. Friend has made in indirect taxation, particularly on tobacco and alcohol. On social grounds there is a case for that increase. Those taxes were not increased last year. My right hon. Friend has more than adequately coped with inflation since then. Also his action is a clear sign to the European

  75
  Community that we do not propose to go along with its proposals for the harmonisation of indirect taxation. My right hon. Friend's decision was a clear move in the opposite direction, and I welcome that because, as the Treasury and Civil Service Select Committee has pointed out, there is no argument for going along that road, particularly in regard to value added tax, to achieve the benefits of the single market in 1992. Therefore, the increase in indirect taxation should be welcomed as much for the implication of the change as for the change itself.
  The major change taking place in the United Kingdom with the introduction of the community charge is in the system of local government finance—both in taxation and in expenditure. Clearly a number of anomalies exist that need to be straightened out in the light of experience. Some of them arise because local authorities have been given too much authority, for example, over the level of tax that should be applied to second homes. Some of the definitions of second homes have been nothing short of bizarre. Other anomalies need to be straightened out.
  One matter which gives particular cause for concern is the substantial increase in local government exenditure. It is shown in the Red Book as a clear increase in the percentage of public expenditure in relation to gross domestic product, despite the fact that the estimate for GDP has been raised. That gives considerable cause for concern. It is uncertain to what extent the increase has been balanced by an increase in local government taxation in the form of the community charge, but its effects, in terms of controlling public expenditure, give cause for concern. Whereas previously the extra money would have come out of reserves, both expenditure and taxation are now increasing as a result of local authorities' actions. We have to consider that carefully. I hope that the Treasury and Civil Service Select Committee, when it studies the Budget and takes evidence from my right hon. Friend the Chancellor, will be able to consider that unfortunate development and its implications for the Treasury's control of the economy.
  The community charge sets the context in which the Government's overall budget is made. The changes I have mentioned in regard to the community charge may have a significantly greater impact than the Budget. Protests about the community charge have had considerable publicity, and it has been extremely difficult for anyone to put over the positive case for the tax. I strongly believe that it is a much fairer tax than the old rating system. Previously only 18 million of the electorate of 36 million paid any local taxation, and that was unfair. The community charge is a significant improvement.
  A slogan appeared outside my town hall a little while ago saying, "The duke and the dustman pay the same". That is not the case. People at the bottom of the income scale will have substantial relief from the community charge. People with higher incomes may pay just the community charge, but they will still pay far less than the cost of the services provided to the community by the local authority. That is not an unfair arrangement. More than the cost of local services will be paid by people who are better off, for the simple reason that, taking the country as a whole, only a quarter of the cost of the services comes
  76
  from the community charge, a quarter comes from business and something like a half from general taxation, which is levied on a progressive basis.
  I hope that my right hon. Friend the Chancellor and his colleagues will be able to get across the fundamental arguments in favour of the change. Frankly, those arguments have not been adequately explained.
  Mr. Alex Salmond: Will the right hon. Gentleman give way?
  Mr. Higgins: No, because there is little time and I wish to make a number of other points.
  On the Budget judgment, the way in which the grant system works also gives me grave concern. That is part of the problem. I greatly welcome the transition from rates to the community charge, but I have serious doubts about the way in which the grants system works. The change in local government finance is subject to Higgins first law of politics, which states that when there is any economic change the people who suffer will scream much louder than the people who benefit will cheer. That is a fact of political life and there is nothing we can do about it. However, we need to emphasise the fundamental case for the charge, and suggest that if people use local authority services they should pay something towards the cost. If people pay the community charge but not general taxation, they will still pay way under half of the cost of those services, but even that will improve accountability.
  The Treasury and Civil Service Select Committee has had difficulty in finding suitable catch phrases for the Budget judgment. When the Chancellor of the Exchequer last appeared before the Committee, he suggested that he was a surfboarder in perilous waters. We have long used the analogy of balancing on a tightrope between inflation and recession. I believe that this time my right hon. Friend's Budget judgment was right. But not only is he on a tightrope; he is also on a tightrope in a very thick economic fog. This means that caution is an appropriate response.
  Mr. Anthony Beaumont-Dark: Will my right hon. Friend give way?
  Mr. Higgins: No. I am sorry, I do not have much time left.
  The statistics upon which my right hon. Friend had to rely in formulating his Budget were in many ways seriously defective, in particular the retail sales figures. No one doubts that the high streets are considerably depressed by the action that my right hon. Friend has taken. That is, rightly, having an impact on the economy. However, it is not coming through yet in the statistics. That is creating real problems for him.
  Apart from the impact of the change from rates to the community charge and the corresponding increase in public expenditure, the change is also likely to have an uncertain impact on consumption. Those who gain from the transition may save the proceeds, whereas those who now have to pay something towards the cost of local services will not have money to spend on something else. The precise impact on the economy is at this stage uncertain.
  Finally, it is likely that there will be increased pressure on interest rates worldwide. Recent Japanese experience has suggested that that will be so. The transition in Germany, with the integration of the two currencies, may

  77
  also raise the general level of interest rates. In those circumstances, I doubt whether my right hon. Friend, who until now has, rightly, resisted further interest rate increases in the United Kingdom, will be able to continue to do so, if interest rate increases overseas are significantly large. If that happens, it will have a significant depressing effect on the United Kingdom economy.
  Against the uncertain background that I have described, and in the face of this potential threat, if my right hon. Friend had introduced a tough Budget of the kind that some City commentators wished him to introduce, there would have been a serious risk that in two or three months we should have been driven into a severe recession, with considerable implications for output and unemployment. That would have been particularly dangerous, at a time when wage settlements continue to be significantly inflationary. The two opposing forces would project a conjuncture not dissimilar from that in 1980–81, when the consequences for unemployment were very serious.
  My conclusion is that, in the circumstances, my right hon. Friend's judgment was right. On reflection, I believe that it will be recognised as having been a sensible judgment. It might have been much easier to introduce the Budget in three months' time, by which time many of the present uncertainties may have been resolved, but no Chancellor of the Exchequer has such an option. I hope, therefore, that the Treasury and Civil Service Select Committee will be able to investigate the matter in detail.
  My right hon. Friend referred to the passages on funding policy in the Red Book. As the right hon. Member for Ashton-under-Lyne said, it is difficult to appraise just how tight or tough the Budget is and precisely what is the fiscal stance. At all events, however, we are still running, and are projected to run, a massive Budget surplus compared with previous times. It is important to take into account the fact that up to now the Government's policy of so-called "full unfunding" has meant that much of the money that was taken out of the economy has been put back by back-door means. With a surplus, therefore, my right hon. Friend has considerable scope for tightening the reins, if that seems appropriate in the weeks and months to come.
  In all the circumstances, what my right hon. Friend has done is right. He has introduced many excellent specific measures, as well as taken an overall view of the economy, which is the right one to take in present circumstances.
  6.44 pm
  Mr. Giles Radice: I am delighted to follow the right hon. Member for Worthing (Mr. Higgins), who is such an excellent Chairman of the Treasury and Civil Service Select Committee. I want to follow up what he said about the poll tax and the Budget judgment, but I shall not do so at the moment. I noted his remark about the Chancellor of the Exchequer being on a tightrope in an economic fog. If one is on a tightrope in an economic fog, there is a great danger that one will fall off. Perhaps the right hon. Member for Worthing was warning the Chancellor that he is about to fall off the tightrope.
  I felt some sympathy for the Chancellor of the Exchequer when he spoke on Tuesday. By any standards, he has been dealt an exceptionally weak hand. He inherited from his predecessor an economy which is severely out of balance, with a high inflation rate, relative
  78
  to our competitors, a large balance of payments deficit and crippling interest rates. However, he was also faced with a difficult political situation. The Chancellor's dilemma was compounded by the Government's political plight. It is difficult to make the right economic decisions if one is already 20 points behind in the opinion polls, with only two years to go before the next general election.
  Until last Tuesday I thought that the Chancellor, at least in terms of style, was not making too bad a job of it. Sensibly, he has adopted a demeanour that is far more appropriate to the current problems than was the brash approach adopted by his predecessor. The right hon. Member for Blaby (Mr. Lawson) was never a credible Chancellor of the Exchequer of the bad times. At least the right hon. Member for Huntingdon (Mr Major) has had the nous to admit that mistakes have been made, something which his predecessor could never bring himself to do. In contrast to the previous Chancellor, the right hon. Member for Huntingdon consulted relatively widely when preparing his Budget. However, we all waited to find out whether the Chancellor's economics were as good as his style. Sadly, his Budget proved to be a disappointment— so much so that on Tuesday it was rejected by the Scots, on Wednesday by the markets and on Thursday by the voters of Mid-Staffordshire.
  The Chancellor would be able to shrug off the hostile reception as a short-term setback if he could convincingly demonstrate that his strategies are likely to be successful in the longer term. I very much doubt, though, whether he can. To be effective, the Chancellor's policies have to achieve the following objectives. They must slow down the economy, reduce inflation and shift resources from imports to exports without, at the same time, clobbering output and investment and undermining productive potential, thus leading to new unemployment. In the meantime, the Chancellor must keep the markets happy, despite our relatively poor inflation record, our very large balance of payments deficit and a very uncertain European and international situation. Finally, because the Chancellor is a politician, his policies must succeed enough for him to be able to present the voters with at least a passable prospectus in time for an election in late 1991 or in 1992.
  My judgment is that the Chancellor's Budget strategy will not achieve those objectives. It will not do enough to get the economy back into balance, it will fail to satisfy the markets in the longer term, and, because it will continue the pain without producing satisfactory evidence that it is working, it will also be a resounding political failure. In short, we shall get the worst of all worlds.
  The Chancellor's policy is flawed in three crucial respects. It relies far too heavily on interest rates; it is not supported—as was pointed out by the right hon. Member for Blaby (Mr. Lawson)—by a credible exchange rate strategy; and, as my. hon. Friend the Member for Sedgefield (Mr. Blair) said in a notable speech, it ignores the long-term requirements of the economy.
  Like the previous Chancellor, the right hon. Gentleman has confirmed his faith in interest rates as "the key lever". However, the Chancellor's lever is a very blunt instrument. In his column in The Independent on Sunday yesterday, Christopher Huhne quoted Professor Paish's description, which is worth repeating:
  "It is like pulling a brick across a table top with a piece of elastic: nothing happens for ages, and then the brick hits you in the eye."

  79
  That is the problem with high interest rates. As we all know, there are also some unpleasant side effects on the way. Quite apart from the impact on mortgage holders, there are already signs that the welcome investment boom of the past two years is being choked off. Inevitably, mortgage rate increases will be reflected in wage bargaining, thus adding to the inflationary spiral. In other words, the result of slowing down the economy through high interest rates is likely to be unpredictable and disruptive.
  There is a case to be made for alternative monetary measures. The Chancellor is belatedly urging the financial institutions to restrain their marketing of credit facilities. It is about time. Page 18 of the Red Book contains a note on the practice in France and Germany of imposing minimum reserve asset ratios.
  However, the case that I wish to make concerns not the alternative monetary arrangements, but the fact that the Chancellor should have been prepared to use fiscal policy in his Budget. Like his predecessor, the Chancellor says that he is against fine tuning. I suspect, however, that his apparent opposition in principle amounts to little more than a debating point. Despite the previous Chancellor's unprovable assertions about the improvements to the supply side, he was not averse to some fiscal fine tuning in the form of tax cuts in the run-up to the 1987 election—or, indeed, in 1988.
  A more serious counter-argument is that the economy is already heading towards recession, which was the point made by the right hon. Member for Worthing. A tighter fiscal stance, it is argued, would merely pile on the agony, and it is better to wait and see what happens. That appears to be the Chancellor's strategy. In my view, such fiscal Micawberism is mistaken. Like the right hon. Member for Worthing, I predict that the Chancellor will be forced to raise interest rates again quite soon, partly in reaction to what is happening in Germany and Japan. That would be disastrous. A further rise in interest rates will clobber the real economy and bring in its wake precisely the recession that the Chancellor says that he is trying to avoid.
  If the Chancellor had been prepared to act on the fiscal front in the Budget, he would have been in a better position to resist recession in the coming months. Even a modest increase in the tax take—between £1 billion and £2 billion—would have been a psychological signal both to the market and to consumers. And, because it would assist in dampening demand directly, raising taxes would help pave the way for a reduction in interest rates at the right time, and thus relieve pressure on companies and enable them to concentrate on winning orders in export markets. In that way it would be possible to maintain output, investment and employment, while at the same time bringing the economy back into balance more speedily by reducing inflation and cutting the trade deficit.
  I suspect that the real reason why the Chancellor did not feel able to raise the overall yield from taxes by more than £500 million was that the Government have almost totally lost their political authority. An administration who were foolish enough to introduce the uniquely unpopular poll tax this year could not afford at the same time to increase national taxes.
  Mr. Ashdown: I have listened to the hon. Gentleman's speech with some interest. He is making more sense from
  80
  the Opposition Back Benches about what the Government might have done than any Opposition Front-Bencher whom I have heard. Can he tell the House whether raising taxation is Labour party policy?
  Mr. Radice: I was speaking for myself; I do not commit my Front Bench. It is easy enough for the right hon. Member for Yeovil (Mr. Ashdown) to speak for himself, because there are not many people behind him; indeed, at the moment there is no one alongside him. There are proposals in Labour's alternative Budget to raise taxes—for instance, on company cars—such as the Chancellor introduced. There are also some green Budget proposals—
  Mr. Major: In not committing his Front Bench to anything the hon. Member for Durham, North (Mr. Radice) is wise, and he is following precisely the practice of his own Front Bench. I have here a quote from a distinguished economic correspondent, who said that my
  "decision to go for a broadly neutral budget was finely judged, but a good one.
  The extra £1 billion or so of fiscal tightening the City had been calling for would have made little difference … Major was probably right to resist such tightening, which would have been fine-tuning of the worst sort."
  That was written in yesterday's Sunday Times by Professor David Currie, who has from time to time advised the Labour party Front Bench.
  Mr. Radice: Different advisers give different views. In the Treasury Select Committee we have a wide range of advice from advisers giving different views on different matters, but the majority of commentators argue that the Chancellor should have taken tough fiscal measures in his Budget.
  Mr. Nicholas Budgen: The question is whether the Government are prepared to use any of the weapons available to them. If the view is taken that for political reasons the Government are not prepared to use the interest rate weapon, it may be necessary to use a less attractive weapon, namely taxation.
  Mr. Radice: I entirely agree. We must get away from the mumbo-jumbo that says that the fiscal weapon cannot be used in the short term. That is the doctrine enuciated by the previous Chancellor, and it is wrong. It is time to get away from it. We must examine the position seriously, which is what I have been trying to do.
  The Chancellor ducked the issue because he lacked the political authority. This was primarily a political and not an economic judgment.
  Mr. Robert Sheldon: It is No. 10.
  Mr. Radice: It may be No. 10.
  Mr. Budgen: Will the hon. Gentleman give way?
  Mr. Radice: I will not give way. I have already given way four times, which is unusual for a Back Bencher.
  The Government's lack of authority is also a problem in financial markets. Most City commentators—rightly, I think—expect the value of the pound to continue to drift down during 1990. As the right hon. Member for Blaby said, that will make it more difficult to reduce inflation.
  If the Chancellor had been able to announce that Britain would be joining the exchange rate mechanism in the near future, he might have been able to keep the pound steady over the next few months. However, as everyone

  81
  knows, the Prime Minister has veteod British membership. I do not know whether she will gradually succumb to pressure from the Chancellor and his right hon. Friends over the coming months. She may, or perhaps—as the right hon. Member for Yeovil suggested—it will be necessary to get rid of the Prime Minister before changing the policy. Only the Conservative party can answer that conundrum.
  British membership of the exchange rate mechanism is not a panacea, but it would greatly assist a British Chancellor to maintain a stable exchange rate in difficult circumstances. It would also provide a useful counterinflationary discipline for both industry and Government. In time, as our inflation rate came down to nearer to the German level—as the French rate has done—it would probably lead to a reduction in interest rates as well. So it would have positive advantages and the sooner we join the better.
  The Chancellor's strategy also ignores the long term. Apart from a token gesture towards training, neither the Autumn Statement nor the Budget offers anything constructive to improve education and training, to strengthen our research and development or to reduce our regional imbalance. Yet the skill, research and all-round effort of people in the north as well as in the south represent the real supply side of the economy. As my hon. Friend the Member for Sedgefield said, we neglect those areas at our peril. I suspect that this year's Budget will be remembered—if it is remembered at all—as a short-term Budget with short-term objectives by a short-term Chancellor.
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. We are now into the 10-minute limit for speeches and wise hon. Members should keep an eye on the clock for themselves so as not to allow the Chair to ruin the last minutes of their speeches by the inevitable guillotine that will be imposed by me.
  7.1 pm
  Sir Peter Hordern: Every Opposition Member who has spoken has suggested increasing the rates of income tax. I know that that is the result of their experience in government as that was their custom, but there is one considerable difference between the position today and that under successive Labour Governments: we do not have a financial deficit; in fact, we have had a substantial financial surplus for the past two years, and that is unique in the experience of the past 20 years or longer.
  The case for increasing income tax has not been made because our position is fundamentally different. Moreover, my right hon. Friend the Chancellor was not averse to putting up taxation, because, as hon. Members have recognised, he raised the excise duties by more than the rate of inflation. That does not show any lack of authority, still less any lack of courage, on the part of my right hon. Friend.
  I know that many in the City felt that the Budget should have done more to take demand out of the economy, and many of them sought increases in direct taxation. I recollect that 365 economists wrote a letter to The Times in 1981, after the Budget of my right hon. Friend the Leader of the House, saying that it would result in rapid inflation, but they were all proved wrong. The proposition put forward by those in the City and by economists that we
  82
  should have taken more out of the economy by increasing direct taxation was also wrong. I do not believe that we have a choice between increasing direct taxation and reducing interest rates. Our interest rates are extremely competitive, and it is by no means certain that had we increased taxation we should thereby have been able to reduce interest rates later. I very much doubt whether that would have been the case. One has only to look at what is happening now in Japan, and to a similar extent in West Germany, to realise the truth of that observation.
  I do not know what the House thinks will happen as we all have different views, but I suggest that the demand for money in eastern Europe will be extremely large in the foreseeable future. The effect of that demand will be similar to the large transfer of resources that occurred during the last hike in oil prices when so much money went to the middle east. It is no longer the case that we can envisage a gradually growing world economy in which interest rates accommodate a flow of money from surplus countries to debtor countries. There is bound to be a huge demand for money and for funds which will be attractive to investors all over the world. That brings me to the exchange rate mechanism.
  The conditions we have set for joining the exchange rate mechanism are that the French and Italians should discard capital controls and that we should more nearly approximate to the rate of inflation and the interest rate in West Germany. Naturally, many people consider that that will happen over a period in which our inflation rate falls and our interest rate falls with it, but I suggest that, because of the extra demand for funds in eastern Europe, interest rates in West Germany are likely to be rather higher than one would normally expect as perhaps will be the rate of inflation, for however temporary a period. West German interest rates at 9·5 per cent. for long-term funds are extremely high, historically speaking, and it is by no means certain that the limit has yet been reached. So, by a curious twist which was in no sense expected, the convergence between our inflation rate and interest rate and those in West Germany will now occur because the West German rates are likely to increase and we expect ours to fall somewhat.
  We must also consider the effectiveness of our monetary controls. I must tell my right hon. Friend the Chancellor that I have enthusiasm for almost every part of the Budget save only that part dealing with monetary policy. It may well be that I am shamefully out of date in these matters, but MO does not register with me as an indication of anything except for banks and notes in circulation and as a snapshot of the economy at any particular moment.
  Mr. Budgen: Will my hon. Friend give way?
  Sir Peter Hordern: No. I have very limited time.
  We should have proper monetary targets for broad money and for narrow money, as almost every other European country has, and we should stick to them. It is not difficult or impossible to do so if the will and determination are there, although I accept that many sacrifices will have to be made. It is no use thinking that the exchange rate mechanism is an alternative to strict monetary policy. It is no such thing.
  I recognise that Britain has to face peculiar difficulties as it is the centre of so many money movements across the exchange rates and has such a wide comprehensive

  83
  financial market. However, it would be of great benefit to Britain if we were to have a separate and strengthened Bank of England responsible for monetary policy. I have thought that for some time, and I hope that my right hon. Friend will be able to pursue a study which I understand my right hon. Friend the Member for Blaby (Mr. Lawson) set in train.
  I wholly congratulate my right hon. Friend the Chancellor on scrapping the composite rate of tax for depositors in buidling societies and for creating the new tax-exempt special savings account. I understand that £1,000 billion out of a total personal wealth of £1,860 billion is tied up in housing. Although I defer to nobody in my enthusiasm for the property-owning democracy, so much of our personal wealth being stored in bricks and mortar is not producing the supply-side revolution of which Britain is capable. I should like relief similar to the £30,000 mortgage taxation relief for those who want to start a personal savings scheme or to encourage entrepreneurs to set up in business. Taking the long-term economic view, I think that it does not make sense to freeze such a large proportion of our national assets in this way. I do not think that it is done in other countries to anything like the same degree. If one looks at the matter independently and in a reasoned way, one can only come to the conclusion that the proposition that we ought to set out to achieve such a situation is very strange.
  There is competition for money because of the demand for investment in eastern Europe. That demand will certainly be met. We can expect to see in eastern Europe an increase in productivity and in production such as has not been seen since the start of the industrial revolution in the United States, when hundreds of thousands of people moved from western Europe to set in motion the biggest industrial revolution of all time. We have in prospect an economic revolution limitless in scope such as we have not seen since the beginning of the European Community. With wider European boundaries, we in western Europe can expect to see a substantial improvement.
  I congratulate my right hon. Friend on his Budget, and wish him success.
  7.11 pm
  Mr. Denzil Davies: The hon. Member for Horsham (Sir P. Hordern) has made a very interesting and a very sensible speech. Unfortunately, because of the time limit, I am unable to respond to many of his arguments.
  The Government have been desperately anxious to describe this as a tough Budget. Treasury Ministers repeated the phrase with Pavlovian predictability. The current Leader of the House, who was the first Chancellor of the Thatcher era, and has now acquired something of a reputation as a bull terrier of monetarism, was wheeled out a few days before the Budget to say in a speech that it was likely to be a tough Budget. I wondered at the time how he knew. I know now that he did not know. In fact, it seems that he was fed some dud information.
  This is a timid Budget. I am sorry to say that it is the Budget of a frightened Chancellor. I do not blame him for being frightened. He is frightened by his economic inheritance—if "inheritance" is the right word—he is frightened by his Back Benchers, and, quite properly, he is frightened by the British electorate. The Tory party was
  84
  elected in 1979 mainly to defeat inflation. This it has failed abysmally to do. At the moment, inflation, as measured by the RPI, stands at 7·5 per cent., and it will probably go up to 9·5 or 10 per cent. in the next few months. That is three times as high as the rate of our principal competitors in Europe—France and Germany. The French have managed to get their inflation down almost to the German level. But the rate in Britain is three times as high as the average for the seven major economies of the world.
  The Prime Minister owes the British public an explanation, but they will not get it. The right hon. Lady really ought to explain to the British public why her Government, having invested so much in the defeat of inflation, cannot do as well as the French, the Germans and our other competitors. Perhaps when she next goes to the EC Council of Ministers the Treasury could arrange for her a little seminar with Chancellor Kohl of the Christian Democrats and President Mitterrand of the French Socialists. They know the trick; perhaps they could explain how what they have done might be done in Britain.
  The Budget has all but abandoned monetary targets and has loosened an already-loose fiscal stance. All monetary targets, except little MO—notes and coins in circulation—have been jettisoned. Indeed, the range of increase in MO this year is to be the same as for last year. Although, according to the last Budget, the range of increase was to be reduced from I to 5 per cent. to 0 to 4 per cent., it is above the 1 to 5 per cent. range already. Even last year it was above 5 per cent. Does anyone seriously believe that if, over the next few months, the Chancellor sees MO again exceeding the target of 1 to 5 per cent. he will increase interest rates? Of course he will not. The pound may go down. At the end of the day, interest rates would be increased to stop a run on the pound. But if the pound goes down slowly and gradually, the Treasury will sit back. There will be benign neglect. If it looks as if the slide is getting out of control, the reserves will be thrown at it. Ultimately, if the reserves do not do the job—because they are running out—interest rates will go up. But only then will this Chancellor put interest rates up. Only then will he use monetary methods.
  As a result, I do not see that the Government have any alternative, on the monetary side, to eventually joining the exchange rate mechanism of the EMS. To put it brutally, that means allowing Herr Otto Poehl of the Bundesbank to run our monetary policy. The Prime Minister may not like it. She may kick and scream, but she will have to accept it. In the end, she will have nobody but herself to blame for the failure, over 10 years, to establish a proper and sensible monetary policy.
  Then there is fiscal policy. The Chancellor tells us that fiscal policy is meant to bolster—I think "bolster" is the word he used—monetary policy.
  Mr. Ted Rowlands: It was "buttress".
  Mr. Davies: I was about to say that it was a pretty soft bolster; perhaps I should say, instead, that it was a pretty thin and wobbly buttress.
  So far as I understand it, the Government define fiscal policy as comprising three elements: the budget surplus, tight control of public expenditure, and taxation policy. Let us look at the budget surplus. It, too, is beginning to look pretty wobbly. In the last financial year it was supposed to be £14 billion, but it turned out to be £7

  85
  billion. In the next financial year it is to be £6·9 billion. But if the privatisation proceeds are taken out of that—and there is a very good case for doing so—the figure is down to £1·9 billion. Apparently it will disappear altogether in the following year. So that element of the triad of fiscal policy does not look too sound.
  Let me come now to control of public expenditure. As many commentators, including Mr. Gavin Davies, of Goldman Sachs, and others have pointed out, things are not looking too good on that front either, in respect of the medium-term strategy. On the basis of forecasts of last year, public expenditure over the next three years will be up by £7 billion, £9 billion and £15 billion respectively. That is a total of £31 billion. But it is not real resources, not real money. Those are inflationary increases. So things do not look too good even on the public expenditure side of this fiscal policy.
  On the taxation front, the Budget raises an extra £430 million. When the £1 billion that is already going back into the economy, as a result of independent taxation, is taken into account, we have a minus figure. So the fiscal stance is not very tough. It does not seem to buttress very well the monetary policy, which itself is a shambles.
  The Chancellor and the Government are now in a very tight corner—and the Chancellor knows it. If he introduces tough measures to get inflation down, the next election will be lost; if he does not introduce tough measures to get inflation down, the next election will be lost anyway. He is in a corner, and he cannot get out of it.
  Mr. Major: What would the right hon. Gentleman do?
  Mr. Davies: Opposition Back Benchers do not have to make recommendations. Indeed, I commend the Opposition Back Benches to the Chancellor—it is a very comfortable place.
  The present Government have had one of the easiest and most favourable 10—year periods since before 1914. They could have used those 10 years to build a foundation for the much more difficult 10 years that Britain will face in the 1990s. They neglected to do so, and for that reason, if for no other, they deserve to lose the next election, and they will do so.
  7.20 pm
  Mr. Barry Field: The point made by the hon. Member for Sedgefield (Mr. Blair), who, unfortunately, is no longer present, about short-termism was entirely answered last week by my right hon. Friend the Chief Secretary to the Treasury. He pointed out that since the war we have had 17 years of Labour government and 27 years of Conservative government. Under Labour Governments, our living standards increased by 14 per cent. and under Conservative Governments by 78 per cent. There could not be a better indication of how the fiscal and financial policies of Conservative management have brought achievements of lasting benefit to our nation.
  The abolition of the composite rate of taxation is welcome. It will benefit the lowest paid in society, who hitherto have been prevented from recovering the tax that they pay on building society accounts. They find such accounts useful and convenient places to deposit their money. It will also be of much benefit to children and grandchildren. More than a few grandparents have opened
  86
  accounts for their grandchildren, and hitherto they have been prevented from recovering the tax paid on those accounts.
  My right hon. Friend the Chancellor said that he is mindful of the administrative and enforcement problems that abolition of the composite rate will create. Having been a director of a building society, I should point out to him that, annually, building societies send a voucher of the interest paid to each account holder. I cannot see why that should not become a tax credit voucher, which would minimise the administrative disruption that abolition will cause the Treasury.
  I was pleased to hear my right hon. Friend the Chancellor express concern about how the credit and finance institutions have encouraged people to take on further debt. At a recent meeting, the archdeacon of the Isle of Wight, Tony Turner, told me that he had monitored the amount of unsolicited mail that he had received in the past year. He received 41 letters, all encouraging him to get deeper into debt. That is a matter of considerable concern, and I have suggested to my right hon. Friend that the finance industry should make some contribution to debt counselling agencies. That would be particularly welcome, and I do not think that there is a downside to that suggestion. Brewers make considerable funds available for alcoholism counselling. No one suggests that the brewing industry causes alcoholism, so I do not see why the finance industry should not make some contribution to debt counselling.
  The point made by the hon. Member for Sedgefield about training in British industry is entirely answered by an article in The Echo on 13 March. Its headline read "Open Doors for Women". It announced that an additional 400 jobs will be created for women in my constituency by—and this is a name to be conjured with within the Conservative party at the moment—Westland Aerospace. It has £16 million worth of new orders from
  "McDonnel Douglas of the USA, Dornier of West Germany, and Hispano Suiza, part of the French based aero engine group."
  The tax allowance on training and enterprise councils and the concession for women on workplace nurseries will be welcomed. Curiously, the abolition of VAT on inshore rescue particularly affects my constituency. The Royal National Lifeboat Institution builds all its inshore rescue craft in my constituency and employs many women in its factory at east Cowes.
  I should not like to congratulate my right hon. Friend the Chancellor on making a tax concession for TECs without placing on record my grateful thanks to my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) for granting my constituency a TEC. My constituency fell outside the original parameters for TECs, but his intervention and representations from industrialists led to that decision being made.
  Will my right hon. Friend the Chancellor solve a long-running conundrum about national savings? I have no ideological problem with national savings, but, having been a director of a building society and a member of the Conservative party all my life, I cannot understand how we believe in the free enterprise economy but continue to have a state mechanism for savings. Perhaps my right hon. Friend will sit me down on his knee and give me a cup of Treasury cocoa—
  Mr. Major: I shall certainly give my hon. Friend the cocoa.
  Mr. Field: My right hon. Friend might not like what I am about to say. I noticed buried in the Budget a requirement to fall in line with EEC legislation and to allow EEC tax inspectors access to information on my tax affairs. I cannot accept that a Sicilian tax inspector, with all his Mafioso connections, is an ideal candidate to receive information from the Inland Revenue. This morning, I was told by chief valuation officers of the Treasury that they are unable to obtain information from the Inland Revenue when considering valuations based on profit. It is a cornerstone of our constitution that Inland Revenue information is not passed to others. I view with the greatest alarm the prospect of an Inland Revenue inspector, or his equivalent in Sicily, being aware of the returns of hon. Members.
  I am pleased that my right hon. Friend the Chancellor has addressed the problem of companies' dual residence. He will not allow companies to escape capital gains tax by claiming to be resident here but operating from another country. In future, will that prevent the highly geared bid that we saw for DRG and other companies? If so, that will be a welcome aspect of the Budget that has not been highlighted by the financial press.
  On 13 March, in response to a written question, the Treasury told me that the yield from stamp duty on a regional basis was £145 million in 1985–86 in the south-east, with an average house price of £46,392, and that by 1988–89 it had increased to £360 million on an average house price of £80,249. The housing market is the means to unlock skills and to allow greater mobility in society. Given those variations in yield, there must be a case for regional stamp duty. That would be an unexpected windfall.
  In the current political climate, it may be unpopular to say in the House that the hike in mortgage rates is understandably translated into votes and electoral prospects. One of the Government's great achievements has been to make 65 per cent. of the nation home owners. However, the point that has been missed is that mortgage rates are a good regulatory mechanism against inflation. Literally thousands of pounds have been taken out of the economy and taken away from people's purchasing power, which has a far more deflationary effect than anyone has yet realised.
  7.30 pm
  Mr. Brian Sedgemore: Shortly after what has just been described as the Chancellor's Sicilian Budget speech, one of my colleagues said that he had admired the simplicity of its language. With characteristic generosity, I replied, "Yes, it would be churlish not to recognise that the Chancellor found that point at which ignorance and simplicity converge. Don't you think it was a pity that the steps which he outlined to deal with the immense problems facing the British economy were inversely proportionate to the tedium and length of his 75-minute speech?"
  The Chancellor's lack of understanding in his slight, irrelevant Budget was adroitly summed up in an editorial in that rabid Tory newspaper the Evening Standard on 21 March. The editorial writer said:
  "the Budget is unlikely to make any significant impact on the increasingly severe economic problems which Britain now faces. The Chancellor's silences in this regard are worse than embarrassing: they are dangerous. Part of Mr. Major's Budget Judgment sounded like extracts from a student's essay in 0 Level economics."
  88
  In like manner, on television yesterday, the Chancellor referred to
  "constant waves of demand causing inflation".
  I find it disturbing to have to listen to such juvenile Keynesianism from a Chancellor of the Exchequer.
  The markets did not like the Budget and within hours of it they signalled their horror by pushing the pound down to its lowest ever level against the mark. Despite the Chancellor's intervention, it can be only a matter of months before the markets wreak their retribution on the Budget and he will learn, like other Chancellors before him, that those who live by the markets die by the markets.
  The pundits were equally contemptuous of the Budget. Christopher Johnson, the chief economic adviser to Lloyd's bank, said that the Budget
  "may not be enough to prevent the pound falling and interest rates rising as inflation rises to nearly 9 per cent. next month."
  In the UBS Phillips and Drew Budget special, Bill Martin was merely accentuating the obvious when he observed:
  "1990 goes down as Major's annus miserabilis."
  He added that the Chancellor had a major credibility problem. Kevin Darlington and Joe Roseman finished their article in the UBS Phillips and Drew Budget special by stating:
  "The implications for John Major are obvious. If the economy does not stagnate this year, he may well not be in a position to restore the government's reputation for competence in economic management in time for the next election. The electorate may then conclude that Mr. Smith offers a more palatable alternative."
  Mr. Major: I shall not take up too much of the hon. Gentleman's time, but since he quoted Phillips and Drew, I shall also quote that firm, which said in the middle of February:
  "The latest indicators suggests that policy is delivering the sharp demand slowdown necessary to take the inflationary sting out of the economy."
  If that was true then, it is even more true today.
  Mr. Sedgemore: I shall come to just how much sting has been taken out of the economy, but it is clear that, post-February, Kevin Darlington and Joe Roseman are hedging their bets. If I were a gambling man, I would do exactly the same. They realise that the economy is suffering from the irresponsibility of the previous Chancellor and the present Chancellor.
  There has been a vertiginous collapse in the growth of overall domestic demand in the economy, from a peak of 10 per cent. in early 1988 to minus 0·5 per cent. by the end of 1989. That is bound to take us back to increasing unemployment and cuts in real wages. That is the horror story of the Budget.
  Budget 1990 also gives the lie to the Tory claim that it is the party of sound money and stable prices, which believes that the currency should represent a store of value, because it shows that it is the party of unsound money. The pound in everyone's pocket will be diminished by the Budget. Above all else, the Budget is inflationary: it is a Budget of inflation, by inflation, for inflation. The Chancellor has got us to the top of the inflation league and intends to keep us there.
  It is extraordinary that a Government whose first priority was to bring down inflation saw the annual increase of 13 per cent. in 1979 soar to 18 per cent. in 1980 and touch 22 per cent. on a year-on-year basis. After a temporary blip in 1986, inflation is about to rise to 9 or 10

  89
  per cent. on a year-on-year basis. That is the cause of the Chancellor's credibility gap. It is also a sad epitaph for the Mickey Mouse monetarism of the past 10 years.
  I understand that there is now a conflict between the Treasury and the Bank of England over the future of monetarism and the monetary aggregates. The bank is still keen on them but, for the Treasury, the Chancellor says that MO is up the spout, MI is down the shute, M2 is in a corner, M3 is in a jam, M4 is on the run and M5 is out of sight. Although the Chancellor set a target for MO, he has said that it will be ignored, and should MO come within the target range, that will be pure accident and nobody will be more surprised than him.
  The Chancellor now says that he will replace monetary targets with an even more ludicrous concept, a highly abstract artifice which he deigns to call "his judgment". To paraphrase Christopher Fry, the Chancellor's critical judgment is exquisite, it leaves us with nothing to admire except his opinion, and that, as we all know, is worthless. Those of us who are members of the Select Committee on the Treasury and Civil Service know that the Chancellor's judgment on the size of the balance of payments deficit was mindbogglingly in error. We also know that his judgment on inflation was wrong, like that of other Treasury Ministers over the past five years.
  The Chancellor managed to keep a straight face when he introduced the Budget by telling us that it was fiscally neutral. What nonsense! What tripe! We are told that the medium-term objective is a balanced budget, yet that objective is set to be reached by 1992–93, at least a year earlier than envisaged in the 1989 Budget, and the public sector debt repayment objective for this year and next has been halved. That is a major relaxation of fiscal policy in every conceivable sense.
  The Budget shows that the Tory party is not only the party of high inflation, but the party of high taxation. Paragraph 2.50 of the Red Book states:
  "The Government's objectives for taxation are to reduce tax rates and bring down tax as a percentage of GDP."
  However, table 2.5 describes North sea taxes, national insurance contributions and the community charge as a per cent. of non-North sea money GDP. It states that in 1978–79, taxes under Labour, as a percentage of GDP, were 34 per cent. By 1981–82, they had rocketed up to 38·5 per cent. They are projected for 1990–91 to be way above their level under Labour, at 37·75 per cent. Looking as far as the human eye can see, to 1993–94, they are projected to be way above what they were under Labour, at 36 per cent.
  We see that Labour is the party that lets people spend their own money and the Conservative party is the one that taxes us to death. If, as some Conservative politicians argue, taxes are theft, the three biggest crooks in this country in the past 20 years have been the last three Conservative Chancellors of the Exchequer. The present Chancellor is almost certain to win the Ronald Biggs award for daylight robbery.
  When the Chancellor introduced the Budget he was extremely sad that he had three cheap paragraphs on international monetary relations. He talked as though Britain was a self-sufficient island and told us nothing about the problems of the American, Japanese and German economies and the impact that they would have on the British economy. He did not consider the problems of the big world surpluses.
  The Japanese surplus is disappearing and West Germany's surplus will almost certainly have to be used to
  90
  finance investment in East Germany. How will the international monetary system be able to pay for the big British deficit and the huge American deficit? It is an astonishing shame that the Chancellor did not have the vision or depth of understanding of the world's monetary problems to address those issues.
  7.39 pm
  Mr. Michael Morris: It would have been more honest for the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) to give the percentages of direct taxation rather than the total taxation figure. If he had done so, he would have found that the Conservative party believes in reducing direct taxation and the percentage figures would have demonstrated that amply in comparison to the Budgets presented by Labour Chancellors.
  It is interesting to note that Opposition Members suggested that there should be an increase in direct taxation, but they said that they were worried about the prospects of a recession. There is no more direct way of producing a recession than to increase direct taxation. It was surprising that the hon. Member for Durham, North (Mr. Radice) and the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), both of whom I respect, and both of whom represent industrial constituencies as I do, should suggest such a policy.
  I congratulate my right hon. Friend the Chancellor of the Exchequer on bringing a few smiles to the Government Benches. For once there was a clear strategy which hon. Members and also the public could understand. I found it particularly refreshing last weekend to visit my constituency, talk to my constituents and find that they understood what my right hon. Friend the Chancellor was about. I am a mere politician who once read economics. The City scribblers quoted ad lib by the hon. Member for Hackney, South and Shoreditch may deal in the City, but perhaps they have not read economics.
  My right hon. Friend the Chancellor faced three different scenarios when he wrote his Budget. Under one scenario, interest rates are kept high enough to bring inflation down steadily. Fiscal policy could be tightened only gradually and personal savings were not going to increase. Under that scenario, we would surely have had a sag in domestic investment. The current account balance would have improved a little, but as the domestic recession took hold, we would have become uncompetitive and there would have been a reduction in our exports. My right hon. Friend rightly rejected that scenario.
  Under another scenario, fiscal policy might have been tightened only gradually and personal savings might not have increased very much. Under that scenario, the market might have concluded that more investment was needed and that the Chancellor would give way and reduce interest rates and that that would gradually depreciate the currency. Again my right hon. Friend rejected that scenario.
  My right hon. Friend chose a scenario with which some economists find favour. He decided that there should be a marginal tightening of fiscal policy which should be accompanied by an increase in the savings ratio. The one message to come from the Budget is that the Chancellor is going to have a real crack at increasing the personal savings ratio and my colleagues have congratulated him on what he has done in that respect.

  91
  The introduction of TESSA will come about when the Chancellor hopes that interest rates will begin to fall. Under that strategy personal savings should increase when perhaps interest rates will come down and people will have marginally more money to spend. I believe that that strategy is absolutely right.
  One of the fundamental planks of my right hon. Friend's policy was to see exports continue to increase. That is right. The hon. Member for Sedgefield (Mr. Blair) suggested that our share of world trade is declining. However, he did not paint a true picture. We are holding our share of world trade and over the past 18 months that has increased marginally. While it is true that the pound has depreciated, particularly in relation to the deutschmark, and that helps exports in the short term, we must ask whether we are doing enough.
  My right hon. Friend the Chancellor should call for a report from the Department of Trade and Industry. While he may be considering the macro side of exports, there is something going on at the DTI which may affect exports adversely. The DTI has chosen June as the time to bring about an overhaul of the Export Credits Guarantee Department. For medium-term credit insurance, particularly against the riskier markets, but against all markets in general, there will be an increase in premiums. This is not an opportune time at which totally to revamp the ECGD. There is also a proposal within the reforms that there should be a restriction on geographical markets where we already have heavy exposure on the accounts of the ECGD. This is not the right time for that kind of exercise.
  My right hon. Friend the Chancellor is determined that the balance of payments deficit will be no more than £15 billion. To achieve that, good sound export insurance is vital. It is not good enough to suggest that we will negotiate with the Commission to ensure that the Italians, French and Germans come into line. We want to ensure that they are in line before we alter any of our dimensions.
  Five conditions were laid down at Madrid for our entry into the European monetary system. It is clear that four of those conditions will broadly be met by the autumn of this year. I hope that my right hon. Friend the Chancellor will be brave and recognise that we must move forward and enter for positive reasons. It is good for a Budget to anticipate change and help it along. I believe that we have had a major Budget, but in a minor key. The Budget is very much a turning point.
  It is too easy to forget that sentiment and attitude are key factors that affect the financial and political markets. I feel that my right hon. Friend has pitched his Budget absolutely right. It is reassuring to find that at the grass roots, in our constituencies, people understand the strategy and know what is going to happen. In response to the sceptics on the Opposition Benches, anyone who has been to the City over the past day or so will see that the views have changed from the immediate reactions to the Budget. The general view of economists in the City now is that my right hon. Friend the Chancellor has got it about right, and I congratulate him on that.
  7.48 pm
  Mr. Alex Salmond: The House will expect me to say something about the Budget storm that descended on the Government on the question of poll tax savings limits, and I would not wish to disappoint the House.
  The political position of the Secretary of State for Scotland has been fatally weakened by the events of the past week for four reasons. First, the events demonstrate the marginal position that he occupies in Cabinet. He was not even consulted about the change before the morning of the Budget. Secondly, the Secretary of State for Scotland was completely unprepared for the change that the Chancellor was about to announce. He was so dozy that he did not have the wit to speak up in Cabinet last Tuesday to insist that a caveat was inserted in the Budget speech to take care of the Scottish position. Thirdly, the Secretary of State's position is damaged because of the insensitivity with which he greeted the outcry from Scottish Members of Parliament, describing our indignation for a full 24 hours as a matter of "bogus" political point scoring. Fourthly, there was a craven surrender within the next 24 hours as the Secretary of State for Scotland scrambled desperately to save his political skin.
  Given this demonstration of political weakness by the Secretary of State for Scotland, it was all the more remarkable to see him reinterpret the past week in the Scottish Sunday press as an example of a macho Secretary of State for Scotland boldly defending Scotland's corner in the Government. In the immortal words of Zsa Zsa Gabor, men who claim they are macho usually aren't mucho. So it is with the Secretary of State for Scotland.
  The Sunday papers made interesting reading. We had a bold statement, described as a "declaration of political independence," from the Secretary of State when, according to The Observer, he said:
  "I came into politics before Mrs. Thatcher became leader of the Conservative Party and no doubt I will still be in politics when she is no longer leader of the party."
  However, an article in the Glasgow Herald this morning states:
  "Mr. Rifkind said all he meant was that he was 43, and the Prime Minister was 63".
  That is a rather ungallant climbdown from the tough comments over the weekend. In the same article in The Observer the Secretary of State for Scotland declared that, on poll tax capital limits, the Prime Minister
  "has fallen into line with my better judgment."
  Yet again this morning the Secretary of State backed down from that rather rash remark by saying that it was "a frivolous reply to a frivolous question".
  Having suffered mental paralysis last Tuesday when the issue arose, the Secretary of State for Scotland is now in a state of schizophrenia. He cannot decide whether he is macho man defending Scotland's interests to the Government or macho mouse defending the Government's interests to Scotland. For some understanding of the Secretary of State's mental condition, I advise hon. Members from English constituencies to read a column in today's edition of the Glasgow Herald in which Mr. Brian Meek, who is a leading Scottish Conservative and probably the Secretary of State's foremost confidant, gives some advice to his friend. The article states:
  "Malcolm, however, would do well to remind the electors from time to time that he is not Mrs Thatcher's monkey. In fact she needs him a lot more than the other way round.

  93
  Mrs Thatcher is beginning to look increasingly mortal, and there is no need for any Cabinet Minister to be rubbished by her or by Mr Bernard Ingham. He will not be around the day after she departs."
  One difficulty for the Secretary of State for Scotland is that there is a great deal of material from the past week for Mr. Bernard Ingham or anyone else in Downing street to rubbish. One such example appeared in yesterday's edition of the Sunday Mail. An article describing the poll tax climbdown states:
  "an aide to Mrs. Thatcher said: 'If Malcolm Rifkind can find money from within his own budget to solve a political problem, he can do that.
  'You (the Scots) have got no new money at all.'"
  Although I seldom agree with aides to Mrs. Thatcher, that is a reasonable estimate of what happened over the previous week. We have had the spectacle of a Secretary of State for Scotland implicitly or explicitly threatening resignation to win the right to reshuffle money within his own budget which he has always claimed that he was in sole charge of anyway. Such a pathetic sight calls to mind the comment by one of my predecessors in east Aberdeenshire, Bob Boothby, when he dismissed the office of the Secretary of State for Scotland as "the scullery maid of the Cabinet". There can be no doubt that the present incumbent is well fitted to that description.
  The lesson that the people of Scotland will draw from the events of last week is not about the falling political stock of the Secretary of State for Scotland. The real lesson will be simple, and it is that this Government will bend, break and crack under political pressure. Political pressure will be intensified over the next year, and an early opportunity will be presented in the regional elections, when the objective will be to remove every single Conservative councillor from Scottish politics. Moreover, the target of the non-payment campaign, which is growing in Scotland, will be to remove the poll tax altogether.
  In opening today's debate, the Secretary of State for Employment gave a hostage to fortune when he said that an unenforceable law does not justify its position on the statute book. The poll tax in Scotland is well on the way to being a voluntary tax. It will he totally unenforceable as the non-payment army grows in 1990 from the present 500,000 members. The target of the campaign is not the amelioration or modification of the poll tax but the total removal of this evil tax from the statute book.
  My hon. Friend the Member for Caernarfon (Mr. Wigley) has specifically referred to one tax change in the Budget—the doubling of the blind persons' tax allowance, which is a welcome change, but, as my hon. Friend would point out, it will benefit only a small proportion of visually handicapped people. The tax allowance is payable only to blind people who are registered blind with the Department of Social Security and also have an income that is sufficiently high to be taxed. The Royal National Institute for the Blind estimates that only about one third of blind people will be on incomes that are high enough to make use of that special allowance and that many more blind people will be reliant on social security benefits than make use of the allowance. I hope that the Treasury Bench will take note of that point when disability benefits are next considered.
  The Budget and the Chancellor's speech are at best irrelevant to Scottish economic conditions. It will be of no great surprise to the Treasury Bench that the Budget will not enjoy the confidence of Scottish Members of Parliament. What is perhaps more revealing is the vote of
  94
  no confidence that was passed on the Government's economic policies by the National Federation of Self Employed and Small Business Ltd. at its annual general meeting at Inverness last week.
  The growing dissatisfaction among small business with the Government's policies has been based on the realisation that Scotland is suffering from economic policies that may or may not be appropriate to the overheated economy of the south-east of England and that are most certainly not appropriate to the Scottish economy with substantial underused resources. It is bad enough to have to suffer from penal rates of interest when the economy is overheating, but it adds considerable insult to substantial injury to have that medicine applied when we do not even suffer from such an economic disease.
  The fundamental weakness of the Budget is that it has done nothing to tackle social and geographical imbalances within the United Kingdom economy. The Chancellor did nothing to redeem the disgraceful move by his predecessor in cutting higher rate taxes. He has done nothing whatever to ameliorate the socially regressive impact of the poll tax. From a Scottish point of view, the key factor is that the Budget does nothing for Scottish economic requirements. It is only through constitutional change in Scotland and, in particular, the achievement of Scottish independence within the European Community that we can have an economic policy that is designed and suitable for the Scottish economy and, just as important, a social policy which is amenable to the Scottish desire for social equity and economic justice. The lesson that Scotland has learnt from the Budget is that the Prime Minister, the Chancellor and the Government are now on the run, and we intend to keep it that way.
  Mr. Deputy Speaker (Sir Paul Dean): Order. In view of hon. Members' excellent co-operation and the fact that some hon. Members who applied to speak have withdrawn, I am now prepared to relax the 10-minute limit on speeches—not to take it off, but to relax it.
  7.59 pm
  Mr. David Davis (Boothferry): Thank you, Mr. Deputy Speaker. I am not quite sure to what extent I shall take advantage of that relaxation, but we shall see.
  I am sure that the House will forgive me if I do not follow the new claim for Scottish independence that was put forward by the hon. Member for Banff and Buchan (Mr. Salmond). I am sorry that the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) is not in his place. Like him, I am a fan of the late, great lain Macleod and I should like to correct the right hon. Gentleman's quotation. If my memory serves me right, Iain Macleod said of Budgets,
  "A Budget that is praised in the spring will be dammed in the autumn"—
  not, "A Budget that is praised today will be damned tomorrow."
  I suspect that this Budget will exactly reverse that first maxim, which will be an interesting demonstration of another aspect of short termism for the Opposition Front Bench.
  In the past few days the City, its pundits and the financial media commentators have criticised the Budget as not being tough enough. That is an extraordinary criticism when one looks back over the last couple of months to see what they themselves have said. Only two or three months ago they were advancing cases that would

  95
  have produced exactly this Budget. Indeed, that is the case that was put by their unexpected proxy in the House this evening, the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore). I am sorry that he is no longer in his place to hear my points.
  If we are generous, we can say that the commentators' comments must have had something behind them. If we are generous, we could look to see what changed the mood of the City over what constituted a sufficiently tough Budget. One presumes that those in the City took their change of mood from the national public statistics of the past few months. I refer especially to the balance of payments and the balance of trade figures, which showed a deficit of £2 billion in January, and to the retail sales figures, which showed a nominal growth of 2 per cent. last month on the year-on-year basis. If that is what changed their mood and led to their judgment of the Budget, which has been replicated by Opposition Members in the past few days, one is bound to say that, at the very least, that judgment is childish.
  One hopes that even the teenage scribblers among them are old enough to look back at the history books and to consider the reliability of the statistics such as those from which they have taken their cue. If they were to look back to a few historic crises that Opposition Members will remember well, they would see that in the 1960s and 1970s, when we had trade and other crises such as that involving the International Monetary Fund, there were even errors in the GDP judgment, which is the most stable and the biggest number and, therefore, one would think, the easiest to get right. Nevertheless, there were errors in that of between 4 and 6 per cent.,—or of between two and four years' growth in those days. Those were the errors on an annual figure, let alone on a quarterly or a monthly figure.
  Commentators could also look back to see errors in the trade balance. Invisibles have been a key issue in the developments of the past few months, but there was a £1 billion error in the invisible figure in 1976, which changed the amount from £2 billion to £3 billion positive, when it was adjusted. That was important, given the IMF crisis at the time. Sir Leo Pliatzky, an adviser to the Labour Government in those days, has pointed out that those errors in the national accounts led the major policy misjudgments at the time. He picked out another number —the £2·5 billion overestimate of public expenditure in the late 1970s.
  Therefore, the set of figures that seemed to change the mood of the City in the first few days after the Budget seem extraordinarily thin pieces of data on which to base a judgment, especially when the City itself is surrounded by anecdotal data. I refer to the summary in The Sunday Times at the weekend, which said
  "Retail squeeze tightens its grip",
  which is exactly the opposite message to that adduced from the national accounted figures. Every story that was summarised under that headline was at least a week old. The article referred to the various retail consortia that were having trouble because sales, margins and volumes were under pressure. In reaching a conclusion on the Budget on that basis, the City therefore made a poor judgment.
  We know that such national accounting figures lead to poor judgments and, to some extent, they lead to the sort of problem that we have seen time and time again in
  96
  post-war economic management. I refer to putting a brake on the economy long after it has started to decelerate—indeed, long after it has already achieved some deceleration. In effect, the City is calling for a reinstatement of "stop-go". That is extraordinary and the City would deny it, but in effect that is what it has said about the Budget. It has said, "We want a tougher Budget because we have been frightened by a few numbers in the past few days."
  That is not the only error that the City pundits and their proxies on the Opposition Benches have made—[Interruption.] I am glad that the cap fits. I hope that Opposition Members are getting their fees. The City has also made the error of making a judgment of risk and saying that when facing an inflationary problem, the tougher Budget is the less risky one. In effect, the City has said, "If we are looking at a grey area in which to cast the Budget, the toughest, the most fiscally sharp and the tightest money Budget is the safest one." However, that is not the case.
  Again, we have evidence that that strategy has failed in the past. The easiest way to understand it is to consider the workings of a virtuous spiral in a healthy economy. Let us consider economies that we should like to emulate, such as those of Japan, Korea and West Germany and this economy before the crash of 1987 knocked it somewhat off line. All those economies have high growth. That high growth makes it easy to get high productivity.
  That is statistically well established, everybody knows it and it is also easy to see anecdotally how that comes about. If one is running a factory and one has a 10 per cent. increase in output, it is easy to get a 10 per cent. increase in productivity. All that one has to do is to hold the manpower steady and to solve a few technical problems. If, on the other hand, one has a constant output and one is trying to get a 10 per cent. improvement in productivity, one has to sack people. That is miserable, unpleasant and difficult and as well as technical problems, there are negotiating problems. Therefore, when there is low growth, there is a poor productivity record. Irrespective of the micro-economic changes that the Government have brought about in the past 10 years, that growth is needed to generate high productivity improvements.
  In a healthy virtuous spiral, that productivity improvement allows high wage increases to be paid. In a couple of the past five years, we have seen 8 per cent. increases in wages; 7 per cent. improvements in productivity and a net 1 per cent. increase in unit costs. Therefore, our competitiveness was also well defended which, in turn, created a new growth boost for the virtuous spiral. We were on that spiral from 1986 until the beginning of 1988. That is the spiral that any good Chancellor should seek to be on again.
  Let us consider what would happen if we were to do what the City and its proxies have demanded. Too hard a check would be put on growth and the productivity improvements would evaporate. Therefore, when we are inevitably faced with the 8 per cent. or more wage claims, which we saw even on the morning of the Budget, and they are granted by a British management which, I am sorry to say, is still not very strong and does not get the "mucho macho" award, to which the hon. Member for Banff and Buchan has referred, the increase in costs works its way straight through to the retail prices index.
  Monetarists among my hon. Friends will say, "You can choose whether to take that as an increase in costs or an

  97
  increase in unemployment", and they are right about that. However, the reality is that after such a check on growth one is facing a tougher decision. That hard check leads to a combination of an inability to compete—because of higher costs and retail price inflation—and unemployment. Therefore, we have both unemployment and inflation. It is a recognisable scenario, which we used to call stagflation. That would be the outcome of a tougher Budget policy than the one that we are pursuing today.
  Mr. Ashdown: The Government have predicted economic growth at 1 per cent., although how on earth they can tell it will be I per cent., which is well within the margin of error and well beyond the Government's errors of prediction, I do not know. With economic growth stagnant, and inflation the highest in Europe, the present conditions could only be described as stagflation.
  Mr. Davis: The right hon. Gentleman is old enough to remember real stagflation in the late 1970s, when his party, in conjunction with another party, was a supporter of policies that led to inflation at 28 per cent. and rapid increases in unemployment. That is not what we are seeing today. He is right, but he should study his error margins more carefully because we always underestimate GDP and I suspect that 1 per cent. will turn out to be rather more.
  The right hon. Gentleman should appreciate the point that I am making, which is that my right hon. Friend the Chancellor has to find his way through a narrow channel. On the one side, he has the tide race of accelerating inflation, and on the other the rocks of recession and stagflation. The Budget would best be described as a "steady as she goes" Budget. That does not make a very good headline or a battle cry for a by-election, but it makes a first-class recommendation for a Government facing difficult decisions in difficult days but taking the best judged way through to get us on to that virtuous spiral.
  8.11 pm
  Mr. Ron Leighton: Despite the sacrifices of 11 years of Thatcherism, the North sea oil revenues and the receipts from privatisation, none of the problems of the British economy has been solved. We are going straight back into the old stop-go cycle. A number of hon. Members think that they have found a panacea for this problem—joining the exchange rate mechanism of the European monetary system. Because I think that there is no intellectually credible evidence for this, I shall devote my speech to this one point.
  In a market economy, nothing is fixed in perpetuity. Prices change every day, as do the terms of trade between countries. The exchange rate is simply the price of a currency in terms of other currencies. Like other prices, it will change over time. It is a misunderstanding to imagine that it can be fixed by fiat, or by passing a resolution. Futile attempts to deal with balance of payments deficits or internal price levels by fixing the exchange rate are like trying to control the weather by fixing the barometer. There has been a movement of 4 per cent. in sterling's trade weighted index since the beginning of the month. Its price against a basket of currencies is 85·5 per cent. of what it was in 1980. It has moved 14·9 per cent. against the deutschmark since March of last year. In March 1985, there were 258 yen to the dollar, and at the moment there are 154.
  98
  All that demonstrates that if countries have divergencies of economic efficiency and productivity, and different rates of inflation, then the value of their currencies will vary. That simple fact of economic life should be evident to all. If country A has higher productivity and a lower rate of inflation, and country B has lower productivity and a higher rate of inflation, and if their nominal exchange rates are fixed vis à vis each other, what happens, de facto, is that country A's currency is gradually devalued in real terms and country B's is revalued upwards. Country B's goods then become even less competitive and it develops balance of payments deficits, while country A's goods become even more competitive and it piles up large surpluses. A good example of a country A is West Germany, while Britain looks like country B. While we may try to fix the nominal rate, we cannot fix the real rate, and unless the nominal rate is allowed to reflect the real rate, we suffer massive economic dislocation.
  The rate of exchange is a measure of the terms of trade with the rest of the world. Those terms change every day with every change in the world economy, and it makes sense to accommodate those changes through the rate of exchange rather than through piling up large deficits or surpluses or changes in the levels of output and _employment. Currently, Britain has a horrendous balance of payments deficit, running at some £20 billion per annum, mainly with the Common Market and particularly with Germany. This deficit accounts for 20 per cent. of our import bill and 25 per cent. of our exports. It is very silly to suggest, as did the previous Chancellor, the right hon. Member for Blaby (Mr. Lawson), that this does not matter. This deficit has to be reversed if we are to prosper. To imagine it can be done by linking the pound to the deutschmark, which is what joining the ERM means, strains credulity too far.
  To fix the sterling rate in these circumstances would push us into recession, cause unemployment to grow, destroy growth, make the payments deficit endemic, and lead to a sterling crisis. To appreciate the damage that a wrong and uncompetitive exhange rate can do we need only recall 1980–82, when a quarter of British manufacturing industry was destroyed. If it is said that joining the ERM does not mean a fixed exchange rate, then there is no point in joining. The last Labour Government, in 1978–79, deliberately refused to join the ERM and set out the arguments in a 1978 White Paper. In 1986 the Labour party said that it would join the ERM only if four important preconditions could be obtained. They were: first, entry at a competitive rate; secondly, greater central bank swap arrangements; thirdly, a collaborative growth strategy to combat unemployment; and, fourthly, a greatly expanded regional and structural policy to offset the German surplus. In the policy review document "Meet the Challenge: Make the Change" we said:
  "We believe that the European monetary system, as at present constituted, suffers from too great an emphasis on deflationary measures as a means of achieving monetary targets and that it imposes obligations which are not symmetrical. We oppose moves towards a European Monetary Union which would further impede progress in this area.
  Substantial changes would therefore be required before the next Labour Government could take sterling into the European Exchange Rate. There must be less reliance on interest rate adjustment and more on co-operation between central banks. There would have to be an EC-wide trade policy which contributes to balance of payments stability for

  99
  individual members. There must be a co-ordinated EC-wide growth policy. The pound would have to enter at a rate and on conditions which ensured that British goods became and remained competitive."
  Those are Labour's preconditions. They are substantial and far-reaching. The question is: are they possible or available?
  First, what would a competitive rate be? It is too high at the moment, and it should be lower. We could negotiate, but the experience of Spain is not too encouraging. It had to enter at the existing market rate for the peseta. The problem here is that, even having found the right rate, it would be a fallacy to think it could be safely fixed. What is the right rate at one moment will probably be wrong 18 months or two years later. Labour wants conditions to see that it remains competitive. What are they? Further changes could be accomplished only amid political controversy with our partners and by unanimous agreement, not by our independent decision. Full economic and monetary union, which is the aim, would rule that out altogether.
  Then there is the condition of adequate central bank swap arrangements. Some hon. Members mistakenly think that we should thereby obtain the support of the central bankers to defend sterling and also protect us from speculative flows or runs on the pound. There are already facilities through the G7 and the IMF. What else would there be in the ERM? It is utterly naive to believe that, in future, we could all relax because the Conservative central bankers would rush in with unlimited resources to bail out sterling and wish our problems away. First, any help would be through loans, which we should have to repay. Secondly, no more than the IMF would these banks ladle out billions without laying down conditions—that is, dictate to a British Government what their policies should be.
  That was demonstrated in 1983, when France borrowed 4 billion ecu, but on terms that insisted on a deflation, which destroyed the programme on which the Mitterrand Government had gone to the electorate. Mitterrand was given a choice between socialist policies and the EMS. He chose the latter. So the central bank swap facilities are not an easy option for a Labour Government. It would be unwise to imagine the bankers would give us unlimited funds to finance socialist policies.
  Then what about symmetrical obligations—the equal obligation of surplus countries as well as deficit countries to take action to eliminate imbalances? This sounds nice, but there is no way in which it could happen in the real world. In practice, the burden of adjustment falls more heavily on the central banks whose currencies are weak. There are greater pressures for a tightening of monetary policy—that is, higher interest rates for a weak currency —than a relaxation for a strong currency. Can anyone see the Bundesbank loosening monetary policy to help an ailing sterling? Further, the weak currency has no bargaining power. It is the supplicant asking to borrow someone else's reserves.
  So, in practice, there are no symmetrical obligations in the ERM system but an inbuilt deflationary bias instead. Nor would it, as some people fondly imagine, mean lower interest rates in Britain. Without the option of letting the exchange rate take the strain, high interest rates would have to be used to keep the pound within the ERM band.
  100
  What about the other Labour party condition of co-ordinated economic expansion and the elimination of inter-Community deficits and surpluses? Anyone with eyes to see can observe there is nothing remotely like this in sight.
  Then there is the condition of effective regional and industrial policies. This would effectively mean recycling the surpluses earned by the successful countries back to the deficit countries. In other words, the Germans would be expected to make a present of billions of pounds, or rather marks, to Britain every year. Is it even worth wasting breath on so unlikely an idea? At the moment, we are donating £2 billion net to the Community budget. There is no suggestion that the Community should have a regional policy to recycle its surplus funds. Of course it is unpleasant to have movements in the rate of the pound, but there is one aspect of that which should be of interest to politicians. When there have been such movements in recent years—the most dramatic of temporary depreciations was in 1985—there has been no political crisis and no political drama. How unlike the regular traumas and sterling crises during the period 1945 to 1972 under the Bretton Woods rules and as it would be in the ERM. Do we really want to go back to that? I should have thought that that was the last thing that particularly a Labour Government would want.
  It is sometimes said that accommodating a depreciating currency is inflationary. Of course, it increases the price of imported goods. This simply reflects the change in the terms of trade and has the effect of restraining imports, which is now a prime need. It also has the effect of lowering the price of British exports and thus helping to right the balance of payments. Price rises are, however, not automatic. Experience shows that previous depreciations in 1931, 1949 and 1967 led not to price explosions but to corrections of the current account deficits. Perhaps the reason is that allowing the currency to depreciate to its right level, first, reduces the value of the money stocks in terms of foreign currency, secondly, encourages the outflow of hot money by the lower interest rates that it makes possible, and, thirdly, reduces the cost of both public and private debt. The effect of depreciation of prices has to be measured against alternative policies for correcting imbalances, particularly the current high interest rates, which are pushing up costs and prices. The essential difference is that what I advocate would allow an increase in output and employment, whereas higher interest rates reduce output and employment. It is clear from what I have said that, looked at objectively and dispassionately, joining the ERM, instead of solving our problems, would damage and impede our efforts and rob us of control of our domestic affairs.
  Several Hon. Members rose—
  Mr. Deputy Speaker: Order. I understand that the Front Bench replies will begin at 9 pm. There are still four hon. Members—two on each side of the House—who hope to be called to speak. I hope that they will agree to divide the remaining time between them.
  8.26 pm
  Mr. John Butcher: I congratulate the hon. Member for Newham, North-East (Mr. Leighton). If I had closed my eyes and forgotten about his accent, I would have assumed that about 60 per cent. of his

  101
  speech came from the erstwhile right hon. Member for South Down, Mr. Enoch Powell. It was truly Powellite in part of its construction. I genuinely congratulate the hon. Gentleman on the part of his speech which dealt with the exchange rate mechanism. Such a speech was long overdue from the Opposition Benches. The hon. Gentleman has stated his position clearly. It would add to our debate in this place if those on the Opposition Front Bench were as clear, given their apparent recent wedding to the idea of the ERM.
  The fourth condition which the hon. Member for Newham, North-East laid down took me back to the days when the Labour party had a policy on such matters. He said that there should be appropriate adjustment through regional policy, and we all know what will happen to regional policy within the EEC over the next few years. We are in for a turbulent period.
  Regional policy for the next few years will mean soft loans to a major extent for the East German economy. The paymasters of the EEC have, correctly, set their policies. They wish to help their brothers, sisters, cousins—their fellow countrymen—in an economy which has been stuck in a time warp for a long time. For East Germany it is now 1947, such is the state of its infrastructure and housing stock, its lack of an enterprise culture and the general nature of its clapped-out economy. Regional policy in Europe means billions of deutschmarks and billions of ecu being nobly and laudably deployed to help 17 million people in beleaguered East Germany. The fourth condition, on which the hon. Member for Newham, North-East did not place too great emphasis, will be even more difficult to deliver than it was back in 1985–86.
  Those who have argued for a European central bank have forgotten that the recent justification for redesigning such a mechanism is to take it out of the hands of those objective people who run the Bundesbank and to place the decision making in the hands of the individual Finance Ministers, who in committee, in their cabals and in their smoke-filled rooms, and for much more politicised reasons, would gear and run monetary policy across the European Community. We might find in those circumstances that pan-European monetary policy would be in for an especially turbulent period.
  Like the hon. Member for Newham, North-East, I feel that we have been treated today to a number of panaceas that have not been examined properly in the House. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) has argued yet again, in a coded fashion—that is a device that has been used hitherto by Conservative Members, but now it appears that the Labour party has to speak in code —that there should be increased taxation, as that would be an easier option than high interest rates.
  I recall a well reasoned argument in an article in The Sunday Times during 1985–86 entitled "Who is selling the Snake Oil?" It examined the proposition that supply side economics really did work. In answer to questions from Opposition Members, we found that, as the top rate of tax came down, not only did the total tax intake increase, but the proportion contributed by the better-off section of our community also increased. Supply-side economics really does work, and reducing taxation is an effective way of adding to the Chancellor's income and allowing us to spend on programmes that the House generally welcomes, such as social services and the reduction of our national
  102
  debt. I do not think that increased taxation is any better an argument today than it was when we successfully tested supply side theories in the early and mid-1980s.
  Again, in coded observations, the right hon. Gentleman said that he was in favour of investment allowances. Those of us who, in previous incarnations, witnessed capital spending programmes in the private sector know that in February or March, towards the end of the financial year, the capital investment programmes of most companies suddenly had a huge surge because company secretaries and chief accountants were trying to increase their spend on capital goods at the last minute and so reduce their tax bills.
  That might have been a laudable objective for accountancy purposes, but the quality of investment on that basis often left a great deal to be desired in the return on capital compared with our European counterparts, especially Germany, the Netherlands and the low countries. I do not believe that investment allowances would be a better way to proceed. It was not then, and it is not now.
  I am a staunch adherent to the "manufacturing matters" tendency. I believe that the west midlands will again become the locomotive engine of this country. It is export-based, it is manufacturing-based and it has leavened its employment with imports of service sector activities from the south-east and other parts. It has a strong economy, it is strong in manufacturing and exports, and the return on capital in that region will exceed that of most other regions. I am delighted to say that the competence of our manufacturers remains high.
  The third panacea put forward by the right hon. Member for Ashton-under-Lyne was our old friend credit controls. We have yet to hear from the Opposition just how they would introduce credit controls without the commensurate necessity to introduce exchange controls to insulate us from cross-border movements of capital. The markets are now very sophisticated. Those who lend money either to the corporate sector or to individuals would find it easy to bring in money from outside and reintroduce it into our economy at precisely the time that the Opposition would want to prevent such a tactic from being deployed.
  The Chancellor was astute in that matter, because, if his objective is to take money out of circulation, the introduction of TESSA—which asks savers to leave their capital sum in one place for five years—is an effective way to achieve that. The reform has been comprehensively under-estimated by the City, by the chattering classes and by the much-vaunted scribblers who have already been referred to during the debate.
  The fourth panacea is our old friend the exchange rate mechanism. Our debate on the ERM became obsolete the moment that the people of East Germany, on 18 March, voted for a Christian Democratic Union-based profile to their political representation. From that moment on, we knew that there would be an especially turbulent period in German and pan-European monetary policies.
  No one has yet answered the question, what if the United Kingdom were to join the ERM prematurely—for example, now—at a time when its interest rates are 8 per cent. higher than those in Frankfurt? Once in the ERM, corporate borrowers could go to Frankfurt and borrow money without the need to hedge, thereby sucking in a large amount of cash income that would ricochet around the economy and increase the money supply at precisely

  103
  the time that we would not want that to happen. My right hon. Friends the Prime Minister and the Chancellor of the Exchequer said that we would join the ERM when the time was right, and that phrase has a clear and real meaning. If we join the ERM prematurely, we will undermine the fight against inflation for the reasons that I have given.
  Germany is hoping to build its new wirtschaftswunder, and to do so on the basis of real money. If it is 1947 in East Germany, the East Germans have a choice—they can either take the Attlee solution, the SPD solution—keep their controls and public utilities in public hands—or the Euchen-Erhard solution of real money. They have gone for the real money. That is why they will have their wirtschaftswunder, but in the meantime all movement in Europe towards integration of our financial systems must remain on hold. That is the best service that we can do for our friends in Germany.
  The four panaceas suggested by the Opposition will not work. I congratulate the hon. Member for Newham, North-East on the candour with which he delivered his speech. I sincerely hope that we shall hear equal candour from his hon. Friend the Member for Derby, South (Mrs. Beckett) when she replies to the debate.
  8.36 pm
  Mr. Keith Vaz: This is the first time that I have spoken in the House since 20 February, as I have been away on an official visit to India. What I said on that day—as reported in column 836 of Hansard—was the subject of comment in my absence. The statement that I made on that day was made in good faith, but I sincerely regret any confusion that it may have caused. I am happy to put the record straight on this first opportunity to do so.
  Few Chancellors have had the luxury of having their Budget statements tested before the electorate while the Budget is being discussed in the House. I know that other hon. Members have said that the verdict on the Chancellor's Budget was evident in the result of the Mid-Staffordshire by-election when it was announced on Friday morning. If the voters of Mid-Staffordshire had had the opportunity to read the Red Book, they would have noted that paragraph 1.01 makes the cardinal statement of this Government's economic strategy:
  "The objectives of the Government's economic policy are to defeat inflation and to promote output growth and the creation of jobs."
  The utter rejection of the Government's policy was evident in the by-election result.
  I listened carefully to the speeches of hon. Members on both sides of the House. I do not think that the people of Mid-Staffordshire, of Leicester or of any other place are concerned with the jargon of TESSA, the exchange rate mechanism or the money supply. They are concerned with their ability to pay their mortgages, to provide a decent life for their children and to have sufficient funds to make ends meet. For millions of people, their expectation of the Budget was an end to what they had suffered during the past 11 years. The Budget provides no strategy to help them out of their misery.
  I wish to focus on a number of points during the limited time available. I welcome the changes in tax on workplace nurseries. The Opposition have fought that campaign for many years. Last year I tabled an early-day motion in which I commented on the excellent work being done by
  104
  Leicester city council and its workplace nursery, the Val Jones nursery. When I visited the nursery, mothers told me that they wanted the tax abolished, and I am delighted that that has happened. I hope that the Chancellor and the Secretary of State for Education and Science will go a small step further during the next few months and will ensure that the universal principle of free nursery education for the under-fives is put on the statute book. If they do that, the limited changes announced in the Budget will be worthwhile.
  I also welcome the additional money to be given to the Football Trust. I sat for many hours on the Standing Committee that considered the Football Spectators Bill. It became an Act, but was shelved by the Government following the Taylor inquiry. I only wish that some of the money for which we asked had been made available during the passage of that Bill.
  I am sure that, like me, other hon. Members have constituents attending their surgery who say that they cannot pay their mortgage. I have constituents, specifically from the outer estates of Leicester, who last year purchased a house and cannot keep up with their mortgage payments this year. Mortgage holders in the east midlands are having to pay £127 a month more than they paid a year ago. That is an additional £1,500 a year.
  As a monument to the Government's high interest rates policy one has only to look at the Hamilton estate which was supposed to be built in the eastern part of Leicester. Support for the estate comes from both the city and county councils and it was supposed to be the showplace for new houses. A total of 4,000 houses were to be built by the end of the 1980s, but only 150 have been built, half of which are empty because people cannot afford to move into them. Yet 11,000 people are on Leicester's housing waiting list.
  There were expectations in Leicester and the east midlands that child benefit would be increased and the Treasury would make additional resources available for that. Over the past three years, families in the east midlands have lost more than £60 million because the Government have refused to increase child benefit.
  We hear a great deal about tax cuts. As the House knows, only families that earn more than £275 a week have gained to any extent under the Government's legislation of the past decade. Yet 70 per cent. of families in the east midlands are on incomes below that figure. We have some of the lowest paid in the country and the Budget has done nothing to help them.
  We have heard a great deal about the poll tax and even Tory Members justifying their support of it. In the debate that follows and in further debates this week we shall see how many Tory Members rebel against their Government. On Saturday more than 1,000 people gathered in Leicester town hall square to oppose the poll tax. I was presented with a petition which was signed by more than 2,000 people. [Interruption.] The hon. Member for Derby, North (Mr. Knight) has comments to make. I hope that he will take part in the debate and represent his constituents' opposition to the poll tax.
  The average family in my constituency will have to pay a poll tax at 52 per cent. above what it previously paid in rates. Leicester city council is not extremist. It is a moderate council with an excellent record on spending, yet because of the Government's policy it has had to impose a poll tax of more than £400. The city councillors tried extremely hard to lower the figure, but they were forced to

  105
  impose it because of Government cuts in local authority assistance. If the Government are serious about helping those who have to pay the poll tax, specifically pensioners and others on low income, I hope that they will come forward with additional proposals, which they euphemistically call transitional payments, to help those people.
  Two vital industries are embellished on the social history of my city—the textile and footwear industries. The Secretary of State for Employment referred to the textile industry. Earlier this year I conducted a survey based on the job losses in those industries. We worked out that two jobs were lost in the footwear and textile industries every hour. By the time the debate has finished, a further 10 jobs will have been lost. Since Christmas 1,500 jobs have been lost in Leicestershire and since June 1989, 16,000 jobs have been lost nationally. T. W. Kempton made 750 people redundant. Today in Leicester it has been confirmed that Paisley Hyre is to make 750 people redundant and G and K, 50 people. Twin Textile have made 70 people redundant and Whytes have made 20 redundant. They are household names involved in the history and development of Leicester and the east midlands. Now they are names on the tombstones of the textile industry.
  The same applies to the footwear industry. In the past two years, 2,000 jobs have been lost in the footwear industry in Leicester. That is more than one third of the work force. Since Christmas one of the greatest names in the footwear industry, Glovese, which used to be a leading manufacturer of ladies boots and shoes, has made 300 people redundant and closed its premises. Portland Shoes, Co-op Footwear and Lawson-Ward are further examples.
  Tory Members representing Leicester make statements in the press, especially to the Leicester Mercury, about how hard they are fighting for the footwear and textile industries. Yet in the House they vote for Government policy and support the Government on the multi-fibre arrangement which will devastate these two industries. Who is to blame for the devastation? The Government are to blame. The high level of interest rates, the level of exchange rates and the current volume of imports, especially from the far east and Portugal, are crippling these essential industries. In addition, the unified business rate, which is the poll tax that will be imposed on small businesses, will cause further closures. By the time the Chancellor presents his next Budget the industries will have been cut in half because of Government policies.
  Budgets are supposed to create the climate and conditions for economic growth. This Budget does nothing of the sort. It is complacent and will preside over the final destruction of this uncaring Government.
  8.46 pm
  Mrs. Teresa Gorman: I, too, congratulate the hon. Member for Newham, North-East (Mr. Leighton) on his splendid exposition of an alternative Budget and financial strategy. His position was endorsed largely by my hon. Friend the Member for Coventry, South-West (Mr. Butcher). If we had a low pound, we could have low interest rates. Production costs would be lower, so our exports would cost less. We could then have a lower balance of payments, if we decided that that was important. As a result the burden on mortgage payers would be reduced. That cycle has been well explained by other hon. Members.
  106
  I greatly welcome the proposals that will assist mothers to care for their children in workplace nurseries while they go out to work. They apply to a relatively small number of women, about 3,000. At the weekend I heard my right: hon. and learned Friend the Secretary of State for Employment say that he thought that that provision would be extended to nurseries other than those at the workplace and that employers could pay for that help somewhere other than on the immediate work premises. I hope that when my right hon. Friend the Chancellor of the Exchequer replies, he will make that clear, because that will be equally welcome by many women.
  A couple of weeks ago, I previewed that type of proposal in my ten-minute Bill. I have had the most amazing support for it across the country and across parties. The National Union of Teachers, the National and Local Government Officers Association and the Stockbridge and Deepcar Child-minders Association have written to me. There would be tremendous support if my right hon. Friend the Chancellor of the Exchequer expanded the provision to include a wider range of tax relief for people who need help with domestic responsibilities. I have had a lot of letters from people who have to go out to work and leave elderly relatives at home. They could do with that kind of tax relief on the cost of providing someone to care for those elderly relatives.
  An extenstion of that tax relief would tie in with three strands of Government policy: the campaign to get more women back to work; the proposal to extend nursery care, which is popular throughout the country but which could be achieved by making care tax deductible rather than putting more Government money into it; and the recent proposal to help older people remain with the family instead of moving them into a home. If we allow tax relief to children caring for elderly parents, they may be prepared to keep their parents with them. People would like to do that if they could get tax relief on the cost of providing care in the home rather than having to give up their job to stay at home themselves.
  The extension of that tax relief would enormously benefit the Treasury because of the savings that it would make on social service provision. It might help to meet the increasing demand for nursery care, and the increasing need for women in the workplace, which we have discussed at some length. It might create a new industry on the caring side of society, which would look after people in their own homes. That would be more cost effective than social services departments giving out large sums of money directly out of the taxes. It would cause an enormous surge in the child care business, whether at nursery level or for care before and after children are at school. Children often need care at those times of day and it would be important and useful.
  One teacher wrote to me to say that, although she had gone back to full-time teaching, after she had paid for full-time childcare for her children at home she netted only £200 a month out of her salary. That is hardly an incentive to get people back to work.
  The National Union of Teachers tells me that there are 400,000 trained teachers—mostly women—at home who do not go out to work because there is not a great enough incentive to do so and to provide for care in the home. We need that enormous pool of teachers back in the labour force. By extending that provision to include a wider range of beneficiaries, the Government would be doing themselves and all of us a favour.

  107
  In addition to the House considering this issue, the other two great fora of public debate, "Any Questions?" and "Question Time", have also placed it high on their agenda in the past few weeks. I heard the Financial Secretary to the Treasury say at the weekend on "Any Questions?" that the Government's role should be neutral in this issue. By allowing such a concession on workplace nurseries, the Government have breached that neutrality. They have accepted the principle that Government should make allowances in certain cases. Therefore, I ask the Government to extend that concession to a wider spectrum of people.
  The hon. Member for Derby, South (Mrs. Beckett) was on the same programme. She pointed out that some women do not earn enough money to benefit from the tax allowance. I am sure that she would agree that we could have both provisions. We could not preclude one to provide the other. I am sure that she will support me when I say that women who earn enough to have the allowance should be able to benefit. Everyone who has to provide care at home should be able to benefit from the extension of that principle. I hope that in Committee on the Finance Bill or on Report we may be able to consider an amendment to extend the tax relief to a wider group of people.
  In addition to the support of all those groups that I have mentioned, I have the support of my right hon. Friend the Prime Minister. She was a junior Minister in the House in 1968 when she gave an interview to Good Housekeeping in which she said that she considered that her children had benefited from their mother going to work. She said:
  "My children like me working; they can see and do things they never would otherwise."
  She also said that it would make a tremendous difference if part of the expense of employing others to run her home was allowed against tax. The Good Housekeeping article said:
  "she has fought fervently for this very thing".
  With the support of the Prime Minister, parties across the political spectrum, mothers and fathers who work and people who have to care for the elderly, for the principle of extending tax relief, I hope that my right hon. Friend the Chancellor will give serious consideration in Committee to extending that provision.
  8.55 pm
  Mr. Harry Cohen: I supported the hon. Member for Billericay (Mrs. Gorman) in her Bill to improve child care and domestic tax relief. However, I think that we should go further. There should be proper public provision. The Government are guilty of cutting that provision. They have put a squeeze on local authorities. By freezing child benefit, they have in effect cut it by 24 per cent. I go along with what the hon. Lady said, but we need a lot more.
  When the Chancellor got up to speak last Tuesday, there was a glimmer of hope. He started his speech by saying that he was going to abolish two taxes. Instead of abolishing two virtually irrelevant taxes to help share dealers, the abolition of one tax would have done—the poll tax. That is a grossly unjust tax and a huge burden on families, which will push many people into bankruptcy and may make them lose their homes.
  108
  The poll tax is 33 per cent. higher than the rates this year and it is highly inflationary. It is no wonder that it is hated across the nation, in Tory areas as well as in Labour areas, and that the Government are reaping the whirlwind because of it. The Chancellor should abolish that tax.
  The Chancellor said that inflation is common to all nations, but it is a bit more common to the United Kingdom under a Conservative Government than it is to our major industrial competitors. Inflation here is more than twice the rate in West Germany, for example. Now we have the poll tax and record interest rates. Rents are set to rise by 20 per cent. If councils do not put up rents by 20 per cent. the Government will take away housing subsidies. The CBI said that the new business rate will put 1 per cent. on the retail prices index this year. Prescription charges, fares, electricity, gas, water and the exchange rate devaluation have also contributed to inflation.
  I had to laugh when the former Chancellor, the right hon. Member for Blaby (Mr. Lawson), said at the Conservative party conference that it was not the party of devaluation. The exchange rate has been devalued, and has been sinking into free fall, and will continue to do so. The Tory party is the party of devaluation. That has had an effect on inflation. We have had all that from a Government who promised to bring down inflation.
  The Budget was a non-event in terms of the country's economic problems. I received a written answer last week which shows that debt has increased by 515 per cent. since 1979. Those who are trying to buy their own homes are particularly badly hit. The number of people who are in arrears with their mortgage payments has risen by about 30 per cent. in the past year. I should prefer an increase in mortgage interest relief, particularly if it were targeted to those who are facing repossession, those on low incomes and first-time buyers, particularly in areas where house prices are high. The Government are making ordinary people pay for their mistakes. That problem was not addressed in the Budget. Personal debt is set to rocket.
  The trade deficit is £20 billion per annum; manufacturing output has sunk below the 1979 level; unemployment stands at around 2 million. The Chancellor of the Exchequer said that growth would be only about 1 per cent. next year. That will mean higher unemployment. Public services are underfunded. The National Health Service, community care, public transport and the environment are hugely underfunded, despite the fact that this Government have enjoyed North sea oil revenues amounting to £70 billion. No other Government have enjoyed such huge revenues.
  Privatisation proceeds stand at over £30 billion. Harold Macmillan described it as selling off the family silver. As a result of the consumer boom, the Treasury's tax revenues have soared. However, they have all been wasted. Only the rich have benefited. The money has been invested abroad instead of in the United Kingdom. Defence spending has also increased. I also had to laugh when the Chancellor referred to a public sector overshoot of £2·5 billion and then blamed local government. The Ministry of Defence, however, is reported to have overspent by £2 billion on nine projects.
  The Chancellor dressed up his tough old mutton Budget as lamb by describing it as a Budget for savers. He did not have to do anything for the big savers; high interest rates are doing that. However, small savers and those without savings are being punished by increased bills. To say that this is a Budget for savers is just a Government

  109
  cover-up. The Government have not invested properly, so the Chancellor could introduce only a boxed-in Budget. He cannot give anything away to people; if he did, they would spend it, which would result in more imports.
  The country is vulnerable. Germany and Japan are able to force the Government's hand by means of higher and higher interest rates and by one run after another on the pound. The crisis has been caused due to a shortage of United Kingdom-produced goods. Only a Labour Government can rectify that problem. High interest rates will not solve it. There have to be other measures, which must be targeted on the rich. They have benefited from previous Tory Budgets. They ought to pay. The poor, who do not create excess demand, should be protected.
  The Government are engaged in a short-term fiddle for their own political interest. They want to create the image of a rosy economy just before the next general election. Interest rates will come down then, albeit temporarily. The Government have paid off borrowing in previous years, as in this year, so that they will be able to borrow again and bribe people next year. They are not interested in the nation's economic prosperity; they are interested only in conning the people before the next election. However, it will not work.
  The Government have gone too far by plunging into debt. They have not run the economy sensibly for the future. Their bluff is being called, as we saw in the Mid-Staffordshire by-election. People will not forget. They want and deserve better economic policies. Only Labour can produce them.
  9.3 pm
  Mrs. Margaret Beckett: Many excellent speeches have been made in this debate, as in the three preceding debates on the Budget, on both sides of the House—not that I agreed with everything that was said.
  The Budget was presented in a different and quieter style—more in the style of the present Lord President of the Council than that of the right hon. Member for Blaby (Mr. Lawson)—although we had a refresher course today when the right hon. Member for Blaby made it plain that, whatever he has lost, he has retained his arrogance intact.
  Moreover, the present Chancellor managed to give the impression of being relaxed, almost of enjoying himself. That goes to show that he is a much better actor than he is given credit for. No Chancellor of the Exchequer in his right mind, or out of it, could enjoy presenting a Budget and forecast in which he tried to explain away the worst trade deficit in our history, rising inflation and peak interest rates, especially when the Government have been in power for 11 years.
  I had come reluctantly to the conclusion that I would never hear Ministers stop answering embarrassing questions about their own record by talking about what the Labour Government did 12 or 13 years ago. However, I was wrong. I freely admit my error, and apologise to the Conservative Members whose ingenuity I underestimated so profoundly. They have found a new way of not talking about their own record: they have moved triumphantly and seamlessly from talking about the record of the last Labour Government to inventing a record for the next.
  Let me turn to the overall balance and judgment that the Budget represents. Is it, as some commentators have suggested, short-term panic, because we are nearer to
  110
  recession than the Government admit? Or is it long-term boldness—a gamble on everything turning out all right after all?
  There is of course a third option, which is appearing more and more in the views of commentators: that the Budget does not address the long-term prospects of the economy, but—as we feared and warned—addresses the shot-term prospects of the Conservative party. It is the Budget that Conservative Members needed to restore their morale, instead of the Budget that the country needed to restore the economy.
  The gamble—if that is what it is—depends for its success on the electorate's failing to recognise its nature. That is why the Chancellor is so annoyed with my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), who has suggested that he may be aiming for a boomlet in 1991–92. Not that that is not true; predictions of the speed and scale of the resumption of growth shown in the Red Book imply a pre-election boom. What really upsets the Chancellor is the fact that, if the electorate realise what he is up to, he may have risked our future for little short-term gain.
  To be charitable, there may be another, slightly different, reason for the Chancellor's annoyance. Perhaps since those predictions were made he has realised—as the economy deteriorates before our very eyes—that perhaps he cannot engineer a pre-election boom; so, making a virtue out of necessity, he claims credit for what he may not be able to escape.
  This is, of course, an intensely political Chancellor. We are told by some—perhaps even, implicitly, by the right hon. Member for Blaby today—that the Chancellor is not as brilliant as his predecessor, but has a lot more sense. He is not going to come to the Dispatch Box and tell us that we are just too stupid to understand his brilliance; he picks his words as carefully as he picks his excuses. That was already apparent when he addressed the Treasury Select Committee. He carefully won its sympathy, first by being polite—which it was not used to—and secondly by selecting the range of lesser economic crimes to which he would plead guilty, making a frank and open statement of error but confessing only to minor crimes, and only when he could shuffle off the blame.
  Some commentators have expressed surprise at the nature and scale of the Chancellor's gamble. I am not sure why. He may have been, if not the silent partner, at least the quieter one, but he was the partner in the great gamble of 1988, for which we are paying such a heavy price today. That 2p off income tax, and the letting rip of the economy that went with it, is now matched by today's heavy increase in interest rates. The present Chancellor was a partner when, together, he and his predecessor gambled and lost. Now he is going for double or quits.
  Those with gambling fever, often quiet souls, may applaud the right hon. Gentleman's daring; more prudent souls—and Labour Members are very prudent because of the stock from which they spring; by definition, there is no one to pick up the pieces if it all goes wrong—will worry about the extent to which the Chancellor is risking our future. Nor is the gamble the only real resemblance between this Chancellor and his predecessor. There is never enough money to do everything that we might wish, but it is when the room for manoeuvre is least that we see most clearly the nature of the choices made—and the nature of those choices differs not one whit from the nature of the choices made by his predecessor.

  111
  For all the kind words for small businesses, the cost of the Chancellor's measures for them pales into insignificance beside the cost of his gesture to the City. He told us that the abolition of stamp duty on stocks and shares will cost £120 million in 1990–91. He did not mention that it will cost £800 million in a full year. The Chancellor has introduced tax relief for charitable giving up to £5 million. That is very nice, but how much is intended to give extra encouragement to private donations to city technology colleges which help a tiny minority of the nation's children at the expense of the rest? The concessions on workplace nurseries, the composite rate of tax and poll tax rebates are all welcome, but the Chancellor is only alleviating the burdens imposed by the Government.
  The concession on the poll tax will help fewer than 1 per cent. of poll tax payers, and in any case the figures were wrong. The clawback of such help as is given will be severe, assuming that people are earning 20 per cent. on their capital, and the shambles over Scotland exposed once again the incompetence and the injustice of Government policy.
  Let me give the House an example of someone who assumes that he will get help from the Chancellor's concessions on the poll tax. Someone with savings of £13,000 would have been debarred by the capital limit under the old system. The assumption of the income from that capital means that a person facing a poll tax of £400 who is eligible for the maximum rebate of 80 per cent. and had to pay £6·15 a week would find that it was offset by the potential income of £6, so there would be no rebate whatsoever.
  People will have to apply for the concession on the poll tax. As always, under the means-tested schemes introduced by the Government, help is what they call targeted only on those in the greatest need. Speaking of prudence, I contrast that with the help given in last year's Budget to people such as the Prime Minister to subsidise their private health insurance. That was not targeted on people in any need and will be given automatically and people will not have to apply for it. Perhaps the Chancellor will tell us about the prudence of that.
  I now turn to the Budget analysis of the state of the economy. In the Chancellor's speech and on the succeeding four days we have heard about the Government's brilliant record in economic management —the record that led us to the biggest balance of payments deficit and the highest mortgage rates in our history, inflation higher than that of our major competitors, and falling investment.
  One of the claims repeatedly made in defence of what we are told is a temporary setback is that, under the present Government, we have seen the longest period of expansion in 50 years. Sometimes we are told that it has been the longest period of expansion in our history. That sounds good, but unfortunately it is not true. Before the OPEC price increase in 1973, all the usual measures of growth in gross domestic product show steady growth under all Governments, including the last Labour Government—from at least 1958 to 1973, or, if one chooses the measure of disposable income, from 1948 to 1973. There were stop-go cycles then, but what are we experiencing now? Without the cushion of North sea oil,
  112
  we would probably have seen an earlier example of stop-go under the present Government, as balance of payments constraints would have occurred far earlier.
  We are told about the remarkable growth in output after 1982, greater than that in Germany, France and Italy. However, if one examines the entire period from 1979 to 1989—the period during which the Government have had responsibility—the growth in output was average. We were out-performed by Italy, and relatively our position in the OECD, Europe and the G7 countries declined. We are told that exports stabilised as a percentage of world trade after falling for decades. Yet the volume of exports grew less than the volume of world trade in all but the two years 1982 and 1987, and the volume of imports grew massively more in every year except 1980 and 1985 and was roughly the same in 1989.
  We are told that total investment has grown since 1980 because of the growth of business confidence, and that total United Kingdom investment has grown faster than that of any other European country. In fact, from 1980 to 1986, gross domestic fixed capital formation as a percentage of gross domestic product was lower than in 1979. In 1981, it fell to the lowest level since 1959. Even in the boom year of 1989, it did not reach the post-war record achieved in the period 1968–70 under a Labour Government.
  In any case, manufacturing investment—the engine of recovery—was lower in every year between 1980 and 1987 than it had been in 1979, and from 1981 until 1983 it was at levels not seen since the mid-1950s. As for the claim that it grew faster than in any other European country, one can only say that it evidently needed to recover. In fact, in the period 1979–89 the growth of investment in this country was exceeded by Spain, Portugal, Finland, Turkey and Norway—and that is only in Europe. Moreover, all this growth in investment still leaves us near the bottom of the league—18th out of 23 OECD countries—in levels of investment as a percentage of GDP. And we had the benefits of North sea oil.
  The Government claim also that, since 1983, they have created more jobs than any other European country—sometimes they say, more than all the others combined. Again, that is just not true. According to the most recent reliable figures, we made up a quarter of the total number of jobs created in the EEC Twelve—not more than all the rest put together. Percentage gains in employment were greater in Italy, the Netherlands, Denmark, Luxembourg, Greece and Portugal.
  We staged the strongest recovery after 1983, but between 1979 and 1983 we lost more jobs—1·8 million out of a total EEC job loss of 2·8 million. In addition, all the figures for jobs created in this country include Government schemes. If the numbers of people employed on Government schemes are stripped away, one finds that the number of jobs created in the 1980s was much the same as the number created in the 1970s, when we had no oil —indeed, we had a huge hike in the price of oil—and when we had less favourable terms of trade. Yet we claimed no miracle.
  Mr. Richard Page: How does the hon. Lady contrast her figures with the 5·6 per cent. average in the United Kingdom and the 8·8 per cent. average in the EC? Is it not a fact that, in terms of employment, we in this country are better off?
  Mrs. Beckett: I do not know whether the hon. Gentleman was listening, and I do not know what figures he is quoting. I have just said that the Tory Government claim to have created more jobs in the 1980s than ever before, and that is simply not true.
  Even if all these claims could be made without qualification—and they cannot—to boast of their achievements, as this Government continuously do, without mentioning oil is like someone claiming credit for having prospered more than his neighbour without mentioning that he had won the pools.
  But the Government do not make misleading claims just about their overall record. They claim, most misleadingly of all, that the underlying problems of our economy—our lack of competitiveness and our low rate of growth in traded goods and services, what we sell abroad to make our living—has been resolved. Again, the figures give the lie to that claim. Manufacturing output fell by 19 per cent. between 1979 and 1981 and since then it has grown roughly in proportion to total GDP. So, while GDP grew by 24 per cent. in that period, overall manufacturing output grew by only 13 per cent., and is again flat. No wonder we remain 17th out of 20 OECD countries for the rate of growth in output over the period.
  The significance of that low place lies also in the fact that, with growing internationalisation and interpenetration of markets, we need to hold on to our market share at home, as well as sell abroad, if we are to succeed. We all know that this is one of our major problems. The export volume may have risen by almost 50 per cent. between 1979 and 1989, but the import volume rose by 110 per cent. While our output growth has been 13 per cent., our expenditure on manufactures has risen by 30 per cent. Hence, again, we have the deterioration in our trade balance in manufactures, from a £2·7 billion surplus in 1979 to a deficit of nearly £17 billion in 1989—the first deficit in manufactured trade in our history, and it appeared under this Government.
  The Government used to argue that this was all totally unimportant, as the income from invisibles—from traded services—would keep us going. The forecast now is for a surplus of £1·5 billion on invisibles, compared to £2·5 billion in 1989 and £6 billion in 1988. This suggests that perhaps last month's deficit was not quite the aberration that we were told it was.
  The export volume of all services rose by under 15 per cent., and of those financial services contributed by far the greatest growth. We have seen a collapse in earnings from merchant marine and tourism, from which, as usual, the Government have stood aloof, and we are all now reaping the consequences. While the export growth of traded services rose by 15 per cent. between 1979 and 1989, the import growth of traded services rose by over 50 per cent. Although our service trade balance has not yet disappeared, it has fallen as a percentage of gross domestic product.
  Tragically, it appears that the Government are not ready even to recognise that problems exist, let alone that they have any duty to help to remedy them. We called in our pre-Budget background briefing, as my hon. Friends have done in the debates, for support for investment, training, research and development and the inputs that have made, and are making, the performance of our competitors superior to ours—the inputs without which we approach 1992 with not one but both hands tied behind our backs.
  114
  What did the Chancellor say about training or research and development? In effect, that everything was wonderful. In an unbelievably complacent speech, the Secretary of State for Employment said the same. My hon. Friend the Member for Sedgefield (Mr. Blair) demolished that argument this afternoon.
  The Chance llor said that spending on business research and development had risen by 50 per cent. in the past five years. That is good, because between 1981 and 1985, the last period for which good international comparisons are available, we had the lowest rate of growth in total research and development expenditure in real terms of all the OECD countries, except Yugoslavia. We were the only OECD country, except Turkey, to experience a fall in total research and development as a percentage of gross domestic product.
  Within those figures, the rate of growth of business-financed research and development was the worst of all OECD countries, except Australia and New Zealand. We were one of only three countries—the others being New Zealand and Eire—in which Government-financed research and development declined in real terms. Since then, Government support has been cut further, while our most successful competitors continue to spend a higher proportion of wealth on research and development than us.
  The danger in which that places us is highlighted by two recent press reports. The first appeared yesterday in the Mail on Sunday and is only the latest in a series of articles on the brain drain from this country of qualified scientists and technologists. Until recently, the Government refused to acknowledge that the brain drain existed, and have taken no steps to resolve it.
  The second article appeared in The Guardian on a report from the 1FO Institute in Munich, that some 40 per cent. of all manufacturing products that will be internationally traded in 1995 are not yet in production.
  The pace of innovation in products is quickening, and if we are to remain competitive, there must be more investment and research. Manufacturing investment is falling, and the Government's Budget predictions show that they expect it to fall, yet they continue to stand aside.
  The international comparisons made for the Japanese company Yamaichi are bad enough for this year. They show us at the bottom of the growth league, at the top of the inflation league and with the highest trade deficit in Europe. More worrying, they show no change in the position in their forecasts for 1990 or 1991.
  Mr. David Lightbown (Lords Commissioner to the Treasury): This is depressing.
  Mrs. Beckett: I agree—it is depressing.
  There is no vision in the Budget, nothing to prepare us for the 1990s and no fiscal incentives, however minor, for good environmental policies, apart from the differential on lead-free petrol. There is nothing for those struggling to pay the extra charges that the Government have imposed on them. The excess price increases in electricity, water, fares and rents have all been imposed as a consequence of Government policy.
  There is nothing for the small business or mortgage payer to alleviate, by even the smallest degree, the burden of interest rates, and nothing to create the conditions in which they might be lowered. All we get is a series of little exhortations—"no gain without pain", as the Chief

  115
  Secretary said. That makes one wonder what Treasury Ministers are reading these days. I have a theory: the Prime Minister has embroidered a couple of samplers with those mottoes, and the Chancellor and the Chief Secretary have been forced to hang them over their desks and read them each morning.
  As I contemplate the Government's continued reliance on their one-club interest rate policy, the proverbial blunt instrument approach, I am strongly reminded of the descriptions I remember from school history lessons of the mediaeval practice of medicine—what I believe later and wiser generations called "heroic medicine". It seems that what we are experiencing at the hands of the Government is heroic economics.
  I see the Chancellor as a sort of economic equivalent of the mediaeval barber surgeon, someone who knows only a limited range of drastic remedies to cleanse the system—all that purging and cupping, cures that were frequently applied with such ferocity that they killed more people than would have succumbed to the disease. Who can doubt that the mediaeval barber surgeon would have said to the patients and their anxious families, as he drained that last fatal pint which weakened the patient beyond the point of recovery, "If it isn't hurting, it isn't working."
  Almost every Opposition speaker, from whichever party, and even some courageous souls on the Conservative Benches, have identified the Budget as yet another missed opportunity for the nation, perhaps even a missed opportunity for the Conservative party. The truth is that we are all paying for the sins of 1987, 1988 and 1989, and those who benefited least are paying most.
  There is a clear attempt to put much of the blame on the right hon. Member for Blaby, but most of the Government's policies have, with a few honourable exceptions, been not just supported, but supported wholeheartedly—as many hon. Members made clear in the Budget debates—by all Conservative Members, including all the potential contenders for leadership. I see that no one seems to want to take a bow. Collectively, they have frittered away the greatest windfall that this country has ever seen, not just in our lifetime, but for many generations. They have frittered away £83 billion, at today's prices, of income from the North sea. They have frittered away our opportunities, our children's opportunities and our grandchildren's opportunities, as well as their own.
  In the words of the most destructive, damaging and unjust piece of legislation that even this Government have passed, we intend to hold them, one and all, "jointly and severally liable".
  9.27 pm
  The Chancellor of the Exchequer (Mr. John Major): The hon. Member for Derby, South (Mr. Beckett) ended the Opposition's contribution to this debate in much the same manner as her right hon. and learned Friend the Member for Monklands, East (Mr. Smith) opened it on Wednesday. Her speech was amusing, occasionally opaque, statistically selective, strong on criticism, but almost totally devoid of any detailed alternatives.
  In the hon. Lady's statistical selections there were, alas, some facts that she missed. She missed the fact that between 1980 and 1989 this country grew faster than any
  116
  major European country except Spain. She missed the fact that, even with slower growth forecast for 1990, the United Kingdom will have recorded higher growth in the past 10 years than either France or Germany. She missed the fact that, since 1980, the United Kingdom's manufacturing output has grown faster than that of either France or Germany, in stark contrast with the 1960s and 1970s when the United Kingdom was bottom of the growth league. Those are just a small selection of the facts that the hon. Lady missed.
  Opposition Members have now been in opposition for a decade or more. After such a lengthy period, it is a little puzzling that they have so little constructive to say about the future. Either they do not have policies or they will not say what those policies are. I know that the right hon. and learned Member for Monklands, East is an intelligent and perceptive politician and, therefore, after 11 years of being an intelligent and perceptive politician he must have policies. If he does not have policies after 11 years, he is too incompetent to be in government. If he does have policies and he will not say what they are, he is too shady to be in government. The Opposition are now secretive to the point of deception.
  There is a new tendency in the Labour party. The "don't say, won't say" tendency is now running the Labour party from the Opposition Front Bench. That tendency is led by the right hon. and learned Member for Monklands, East —a distinguished Queen's counsel—and under his guidance the Labour party has opted for the right to silence, for fear that it will incriminate itself by telling people its policies.
  Labour Members are not silent only in the House. These days they are also silent in the media. When did we last see a significant interview with the right hon. and learned Member for Monklands, East, with the right hon. Member for Islwyn (Mr. Kinnock) the Leader of the Opposition, the hon. Member for Dunfermline, East (Mr. Brown) or any of the Opposition Front Bench in which they have exposed themselves to discussion of their policies? Not having seen such an interview for some time, can we ever expect to see one again?
  Over the past few days, we have had a wide-ranging debate. There have been a number of compelling speeches to which I wish to refer. Today there were a number of outstanding speeches to which a reply is merited. My right hon. Friend the Member for Blaby (Mr. Lawson) made two specific points in a compelling speech. First, he said that a tax increase at present would be unwise and I will refer to that later, as the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) and others also referred to that issue. Secondly, my right hon. Friend the Member for Blaby called for early entry into the exchange rate mechanism of the European monetary system, and that call was echoed by my hon. Friend the Member for Horsham (Sir P. Hordern) and others.
  I reaffirm to my right hon. Friend the Member for Blaby and to my colleagues that progress is being made towards entry and that we will enter the exchange rate mechanism when the conditions that we have set out are met fully. As my right hon. Friend the Member for Blaby will be aware, we wish to see inflation fall before we enter the mechanism. That concern is not shared simply by us; it is shared also by the governor of the Bundesbank. When sterling enters the exchange rate mechanism, it may well be turbulent not only for us, but for our European partners.

  117
  There should be no doubt that join we will, when the conditions that my right hon. Friend the Prime Minister set out have been met.
  My right hon. Friend the Member for Blaby also referred to the Opposition's policy—or lack of it—on the exchange rate mechanism. Of course the Opposition say, "We will join the exchange rate mechanism", although the hon. Member for Newham, North-East (Mr. Leighton), in a speech that I was sorry to miss, apparently has a different view about that. The Opposition's promise is so hedged by codicils as to be almost meaningless. They are not so much proposing to join the exchange rate mechanism as to abolish it. Their conditions for entry would drive a coach and horses through the existing system.
  Last year the right hon. and learned Member for Monklands, East told the House that the conditions that the Labour party attaches to joining the mechanism, apart from the difficult condition of joining at the effective rate—which he did not identify—are that there should be adequate swap arrangements between the central banks, a well-organised regional policy within the Community and that the thrust of economic policies within the Community should be for growth not for deflation.
  As Brian Walden pointed out to the hon. Member for Dagenham (Mr. Gould)—
  Mr. Paul Boateng: Brian Walden is the Government's friend.
  Mr. Major: Mr. Walden was a distinguished member of the Opposition Benches.
  Mr. Walden said that Labour's terms for entry are much tougher than the Government's. For instance, he said that Labour wants a huge regional policy. It wants a guarantee that weaker currencies will be defended much more effectively than at the moment. Labour wants the whole purpose of the exchange rate mechanism to be changed.
  The truth is that Labour's commitment to the mechanism is a sham. It is an attempt to take a soft option, but the exchange rate mechanism is not a soft option. As my hon. Friend the Member for Horsham made clear, it is a discipline, not a soft option. Financial discipline is something that the Labour party never has understood and never will understand. We understand it, and, in due course, we will join the exchange rate mechanism.
  Mr. A. J. Beith: Will the Chancellor say here and now whether we will join as long as the right hon. Lady is Prime Minister?
  Mr. Major: For the hon. Gentleman, that question is uncharacteristically cheap. My right hon. Friend the Prime Minister made the decision that we would join and, in Madrid, set out the terms under which we would join.
  My hon. Friend the Member for Croydon, South (Sir W. Clark) also made a powerful speech in which he particularly welcomed the introduction of the tax-exempt special savings account. I was sorry to learn recently that my hon. Friend will retire at the end of this Parliament. Conservative Members will miss him and his contributions to our debates. As he said, the new tax-exempt savings scheme represents a considerable incentive for saving. We have already seen the success of personal equity plans, the brainchild of my right hon. Friend the Member for Blaby, in encouraging saving in shares. TESSA offers similar incentives. It is tailored for savings with building societies
  118
  and banks which, for many people remain, and will remain in future, the most convenient and popular vehicle. I hope that the tax privileges of TESSA will get many people started on the saving habit and enable many more people to feel that it is worth building up savings for the future. I am glad to see that banks and building societies have responded positively to this innovation. For example, the Royal Bank of Scotland said:
  "This is what the banks and building societies have wanted for years. It will do a great deal to encourage the small saver and we will be aiming to introduce the TESSA account as soon as possible."
  I hope that many others will follow that lead and that many people will take up the new savings incentive to build security and independence for themselves and their families.
  During the span of the debate, a number of Opposition Members have chosen to quote relatively disobliging remarks from brokers' circulars and from other sources. Tempting though it is, I will not respond by quoting what some of those very same people recommended just a few days before the Budget, but it is striking how warm a welcome the Budget has received from business and industry.
  Mr. Jack Straw: What about the electors of Mid-Staffordshire?
  Mr. Major: The trouble with the hon. Member for Blackburn (Mr. Straw) is that he fears that the strategy will work, and he is right—it will.
  The particular help that the Budget offers for smaller businesses has been acknowledged not only by Opposition Members but by the Association of British Chambers of Commerce, which welcomed
  "the combination of a powerful boost to savings with control of inflation."
  It added:
  "the business community should be well pleased with it."
  The Confederation of British Industry, the Institute of Directors and others have offered their full support for the determination to bring down inflation.
  There was support, too, from many business leaders such as Sir Denys Henderson of ICI, Mark Boleat of the Building Societies Association, and many others, including Peter Morgan of the 10D. Most of those people know that, in present circumstances, we cannot offer this as a giveaway Budget, nor do I think at present that business would thank us for one.
  Businesses know that the one overriding risk to our economy and to everyone in it would be to give up the battle against inflation. They remember only too well that rapidly rising prices in the past have destroyed planning, investment and motivation, and, above all, industrial relations, because inflation is the mother and father of industrial conflict. They know, too, that that was in the 1970s—not the 1980s—When the Labour Government were in power.
  Business men know that with increasingly open markets and tough competition in the future, Britain simply cannot afford that sort of self-inflicted wound. That is why business understands and approves both a tight fiscal stance and a tight monetary stance. I offer my right hon. and hon. Friends the promise that that is precisely what we will keep—in the short term, in the medium term and in the long term, because we are determined to bring inflation down and to keep it down.

  119
  British business does not contain many adherents of the sado-masochistic school of economic policy—those who think that the first Budget to put up taxes since 1981 did not put them up enough. It is not surprising that that doctrine has more supporters among those whose business is writing than among those whose business is business. Not many people in British industry would derive much comfort from a gratuitous helping of fiscal austerity.
  City fashions come and they go. At the moment, the fashionable view may be that the fiscal brakes should be jammed in an emergency stop. However, that ignores all the evidence of recent years about the way in which fiscal policy works, as my right hon. Friend the Member for Blaby made clear. If one looks at our economic history, it is clear that when Governments have attempted to fine-tune fiscal policy to beat the cycle, more often than not that has turned out to be precisely the wrong thing to do at precisely the wrong time. Contrast that with the highly beneficial effects of stable or falling tax rates on the supply side of the British economy. It does not make any sense to set them at risk by a panicky fiscal reaction which, in retrospect, might turn out to be overdone.
  I make no apology whatsoever for the fiscal judgment that I made when I framed the Budget. The right hon. Member for Ashton-under-Lyne spoke in his usual thoughtful and gracious way. In doing so, he questioned both the Budget judgment and the fiscal judgment and referred to market difficulties, as did the hon. Member for Durham, North (Mr. Radice). In so doing, they did not mention—although I reminded the right hon. Gentleman of this—that even as they spoke sterling was higher than when I delivered the Budget speech last Tuesday. When I pointed that out to the right hon. Gentleman in an intervention, he said that we must await the longer term. Of course that is right—and perhaps the Budget's critics would be wise to wait for the longer term as well before making their criticisms.
  In all our debates, the one substantive criticism has been that fiscal policy was not tight enough. The right hon. Member for Llanelli (Mr. Davies) made that same point. I agree neither with the right hon. Gentleman nor with the critics. Sometimes the right thing to do is to stand still with a neutral fiscal Budget. That is what I chose to do on this occasion. If I had judged that it was necessary to raise taxes, I should have raised taxes, but I did not reach that judgment. My right hon. Friend the Member for Worthing (Mr. Higgins) shares that view. He accurately pointed out the difficulties of making such a judgment at present, not least difficulties with the statistical base, which I am considering how to improve.
  Let us consider the fiscal position and record. In recent years, the country has been repaying its debts year after year. No. G7 country, except Japan, either is doing that or has been doing it in recent years. Moreover, the sheer scale of our repayments has already made a sizeable inroad into our public sector debt.
  As for the future, under the fiscal judgments that have been reached, fiscal policy will knock out a further £17 billion of debt over this year and the next two years. As a result of that, we shall have reduced national debt, which stood at the beginning of this year at around £160 billion, by massive sums in total. That is the reality of the fiscal judgment. Our fiscal strength also means that debt as a
  120
  proportion of GDP will continue what has been a headlong fall—from 50 per cent. in 1979, to 32 per cent. in 1989 to a forecast of 28 per cent. in 1990. It is now down to levels not seen since the beginning of the first world war. It is hard and intellectually indefensible to suggest that the fiscal position is neither satisfactory nor tight.
  It is tight for other reasons, too, for we plan to repay £7 billion this year—and £7 billion next year. Even though this year has had the benefit of cyclically stronger growth than next year, the debt repayment next year will remain the same. The reason why it turned out at £7 billion and not £14 billion this year was not because fiscal policy was artificially relaxed. There has been no change in tax rates or structure. It was the one-off effect of the corporation tax shortfall as a result of the build-up of allowances for high investment, of the results of the national insurance rebates, as so many people took out personal pensions, costing the PSBR £2·5 billion, of the result of slightly lower privatisation proceeds than we had imagined and of the result of truly massive overspending of local government as councils sought to avoid new capital controls. To call that a loosening of policy is a perversion of logic. It may fill the columns of newspapers, but it ought not to fill minds as being the reality of what has happened. [HON. MEMBERS: "Oh."] If Opposition Members listen, they may learn something.
  Mr. Boateng: We need no lectures from you.
  Mr. Major: It is, I grant, unlikely that they will listen, but we shall try.
  My right hon. Friend the Member for Worthing pointed out what advocates of higher taxation would say if such taxation generated either lower growth or higher wage demands. He was, as ever, both perceptive and right. My right hon. Friend also welcomed a number of other measures in the Budget and especially the abolition of composite rate tax, as did my hon. Friend the Member for Isle of Wight (Mr. Field). As my right hon. and hon. Friends know, composite rate tax was introduced because it brought substantial administrative savings. The Inland Revenue did not have to check the interest on millions of accounts to collect what were often small amounts of tax. Instead, tax was automatically deducted at source. I have no doubt that we are right to abolish the composite rate. I can think of no other example where tax is collected from people who have no liability to pay it and where, in no circumstances, can it be reclaimed once it has been deducted. Once independent taxation comes into force, as many as 14 million people would have paid tax that they did not owe on their interest.
  However, let me say a word about the scale of the task of abolition. There are some 34 million interest-bearing bank and building society accounts and, during the year, many of the people holding them will change from being taxpayers to being non-taxpayers. Therefore, we shall need to negotiate with the banks and building societies with the aim of introducing a simple scheme of self-certification to allow non-taxpaying savers to receive their interest gross. Those who cannot self-certificate for any reason will be able to reclaim tax. Such arrangements are not easy to introduce and it will be a great challenge to have them in place by next April. Many felt that it would take at least two years to put them in place. It is for this reason, and for

  121
  this reason only, that composite rate tax cannot be abolished immediately. If it had been possible to do so, I would have done so.
  A number of the measures that I introduced in the Budget last week have been widely welcomed throughout the House and outside. I am especially pleased by the widespread welcome that has been given to the proposal for a reduction in pool betting duty to contribute to the cost of safety improvements at football grounds. As we have been in the business of quotes today, particularly from Opposition Members, I shall quote the chief executive of the Football Association, who called it
  "the start of a new era for football".
  I hope that that is true, especially in terms of the conditions in which fans have to watch the game.
  It is surely a measure of success that the Opposition appear to be queuing to take credit for having thought of the scheme. I have no objection to that and no party points to make about it. At Wembley yesterday, with the hon. Member for Newham, North-West (Mr. Banks), who may not care to admit to the company that he was in, and with the hon. Member for Middlesbrough (Mr. Bell), it was clear that the change is widely appreciated by both fans and administrators. The House may wish to know that the Football Trust and the pools companies will be meeting tomorrow to discuss the arrangements. I hope that they can agree on the details speedily so that we can reduce the duty without delay.
  There has been a considerable welcome from charities for the new gift aid scheme. A number of charities have said that they receive a substantial number of one-off gifts of £600 and over. In future these gifts will carry the bonus of tax relief for the charity. This alone will increase their income, but I have no doubt that if the scheme is promoted actively many more people will be encouraged to give generously to a range of good causes. As the director of the Charities Aid Foundation commented:
  "This package of measures is the best ever by any Government."
  He added that the package should be worth £50 million a year if charities pull themselves together and market it properly. I hope that he is right. The CAF was joined in its welcome by the Imperial Cancer Research Fund, the National Council for Voluntary Organisations, the Charities Value Added Tax Reform Group, the National Arts Collection Fund and the Royal National Lifeboat Institution. We now have a proper structure for charities and for giving. There are covenants for the regular giver over years, a payroll giving scheme to be deducted and paid weekly or monthly, and gift aid to provide, for the first time, for one-off gifts of cash. It is the best system of charitable giving, I suspect, of any nation in the European Community.
  The measure to exempt the benefit of workplace nurseries from income tax has been widely welcomed. I have been informed today that a number of employers are responding already by announcing plans to open workplace nurseries for their employees. For example, it is reported that BP will be setting up workplace nurseries for its 30,000 staff following the Budget. There are a number of other employers who will be doing likewise, notably the Midland bank, which is proposing to set up 200 workplace nurseries. That is an extremely sensible response to the labour market conditions that many employers now face. I hope that the scheme will be taken up widely.
  122
  I made it clear in my Budget speech that I wished to encourage savings and I introduced incentives to do so. I know very well the difficulties that many people face with interest rates. I wish that it were possible to promise that interest rates would come down again soon. I cannot promise that they will do so and nor can I rule out a further rise if I judge that necessary. If they have to rise, they will rise. I can promise the House, however, that interest rates are working. They are encouraging saving and discouraging spending and borrowing. I have no doubt that they will get the economy back on track, and in the time scale that I set out in the Budget judgment. Opposition Members who doubt that should not underestimate the crucial importance of savings. Higher saving is not merely a short-time objective. On the contrary, I believe that high levels of saving will be extremely important throughout the 1990s if the British economy is to compete as it should.
  If there is a high level of savings, we can sustain a high level of investment, which we all wish to do. The tax changes add considerably to the armoury of measures already in the system to encourage saving, and which have already resulted in massive culture changes in British society. Some 11 million shareholders and millions of other people will, I hope and believe, be able to save free from the victimisation that they suffered under the policies of the Labour Government. I find it ironic that Opposition Members mock the savings incentives in the Budget. Let people be warned—if there is ever a Labour Government again, the savers can forget about keeping up with inflation or obtaining a decent return on their money.
  We hear a great deal about how the Opposition have changed. The right hon. and learned Member for Monklands, East and his loyal lieutenant the hon. Member for Dunfermline, East tell us, in every newspaper that we open, that Labour has changed and that as they lunch their way around the City, as they do day after day, they are finding a very appreciative audience. [Interruption.] They look very good on it. They sit on the Front Bench, the house pets of the board room in the 1990s. I have no doubt that the right hon. and learned Gentleman is an extremely entertaining lunchtime companion. We have never questioned his entertainment value, but I wonder whether he is deluding himself about the esteem in which he is held. I was amused by an article by the City firm Goldman Sachs—which is not exactly run by closet Conservatives—entitled:
  "Meeting the Challenge?—Labour's Policy".
  Goldman Sachs said that it did not very much like what it had seen of the right hon. and learned Gentleman's policies. It said:
  "Monetary, fiscal and exchange policy will be used to promote the competitiveness of British industry … This implies a willingness to depreciate."
  They are devaluers today just as they always were. Indeed, the policy review states that Labour will end the reliance on high interest rates and an uncompetitive currency. Goldman Sachs concludes:
  "this seems to undermine Labour's commitment to join the exchange rate mechanism of the EMS and to threaten its counter inflationary policy."
  Indeed it does. Labour has no counter-inflation policy.
  The problem with Labour's economic policy is the lack of any means to control inflation. There is no incentive for people to control costs. Labour is now in the age of glitznost—let the glitter be the substance. There has been a great deal of fraud and a few facts during the debate. My right hon. and hon. Friends should make no mistake—we

  123
  have seen all that we are going to see of Labour's plans to deal with inflation. On that they are implementing Labour's election strategy—smarten up and shut up.
  How many basic rate tax payers will be worse off? Labour Members will not say. How many people will suffer from the increase in the national insurance ceiling? They will not say. How much will people lose by the loss of the married couples allowance? They will not say. That is the reality. They will not vote for a policy that will reduce inflation and recreate growth. In this Budget we have a policy to bring down inflation and to create growth. I commend it to the House.
  Question put:—
  The House divided: Ayes 338, Noes 228.

  Division No. 139]

  [9.59 pm

  AYES

  Adley, Robert

  Chope, Christopher

  Aitken, Jonathan

  Clark, Hon Alan (Plym'th S'n)

  Alexander, Richard

  Clark, Dr Michael (Rochford)

  Alison, Rt Hon Michael

  Clark, Sir W. (Croydon S)

  Allason, Rupert

  Clarke, Rt Hon K. (Rushcliffe)

  Amery, Rt Hon Julian

  Colvin, Michael

  Amess, David

  Conway, Derek

  Amos, Alan

  Coombs, Anthony (Wyre F'rest)

  Arbuthnot, James

  Coombs, Simon (Swindon)

  Arnold, Jacques (Gravesham)

  Cope, Rt Hon John

  Arnold, Tom (Hazel Grove)

  Cormack, Patrick

  Ashby, David

  Couchman, James

  Aspinwall, Jack

  Cran, James

  Atkins, Robert

  Critchley, Julian

  Atkinson, David

  Currie, Mrs Edwina

  Baker, Rt Hon K. (Mole Valley)

  Curry, David

  Baker, Nicholas (Dorset N)

  Davies, Q. (Stamf'd & Spald'g)

  Baldry, Tony

  Davis, David (Boothferry)

  Banks, Robert (Harrogate)

  Day, Stephen

  Batiste, Spencer

  Devlin, Tim

  Beaumont-Dark, Anthony

  Dickens, Geoffrey

  Bellingham, Henry

  Dorrell, Stephen

  Bendall, Vivian

  Douglas-Hamilton, Lord James

  Bennett, Nicholas (Pembroke)

  Dover, Den

  Benyon, W.

  Dunn, Bob

  Bevan, David Gilroy

  Dykes, Hugh

  Biffen, Rt Hon John

  Eggar, Tim

  Body, Sir Richard

  Emery, Sir Peter

  Bonsor, Sir Nicholas

  Evans, David (Welwyn Hatf'd)

  Boscawen, Hon Robert

  Evennett, David

  Boswell, Tim

  Fairbairn, Sir Nicholas

  Bottomley, Peter

  Fallon, Michael

  Bottomley, Mrs Virginia

  Farr, Sir John

  Bowden, A (Brighton K'pto'n)

  Favell, Tony

  Bowden, Gerald (Dulwich)

  Fenner, Dame Peggy

  Bowis, John

  Field, Barry (Isle of Wight)

  Boyson, Rt Hon Dr Sir Rhodes

  Finsberg, Sir Geoffrey

  Braine, Rt Hon Sir Bernard

  Fishburn, John Dudley

  Brandon-Bravo, Martin

  Fookes, Dame Janet

  Brazier, Julian

  Forman, Nigel

  Bright, Graham

  Forth, Eric

  Brown, Michael (Brigg & Cl't's)

  Fowler, Rt Hon Sir Norman

  Bruce, Ian (Dorset South)

  Fox, Sir Marcus

  Budgen, Nicholas

  Franks, Cecil

  Burns, Simon

  Freeman, Roger

  Burt, Alistair

  French, Douglas

  Butcher, John

  Fry, Peter

  Butler, Chris

  Gale, Roger

  Butterfill, John

  Gardiner, George

  Carlisle, John, (Luton N)

  Garel-Jones, Tristan

  Carlisle, Kenneth (Lincoln)

  Gilmour, Rt Hon Sir Ian

  Carrington, Matthew

  Glyn, Dr Sir Alan

  Carttiss, Michael

  Goodhart, Sir Philip

  Cash, William

  Goodson-Wickes, Dr Charles

  Chalker, Rt Hon Mrs Lynda

  Gorman, Mrs Teresa

  Channon, Rt Hon Paul

  Gorst, John

  Chapman, Sydney

  Gow, Ian

  124

  Grant, Sir Anthony (CambsSW)

  Maclean, David

  Greenway, Harry (Ealing N)

  McLoughlin, Patrick

  Greenway, John (Ryedale)

  McNair-Wilson, Sir Michael

  Gregory, Conal

  McNair-Wilson, Sir Patrick

  Griffiths, Peter (Portsmouth N)

  Madel, David

  Grist, Ian

  Major, Rt Hon John

  Ground, Patrick

  Malins, Humfrey

  Grylls, Michael

  Mans, Keith

  Hague, William

  Maples, John

  Hamilton, Neil (Tatton)

  Marland, Paul

  Hampson, Dr Keith

  Marlow, Tony

  Hanley, Jeremy

  Marshall, John (Hendon S)

  Hannam, John

  Marshall, Michael (Arundel)

  Hargreaves, A. (B'ham H'll Gr')

  Mates, Michael

  Hargreaves, Ken (Hyndburn)

  Maude, Hon Francis

  Harris, David

  Mawhinney, Dr Brian

  Haselhurst, Alan

  Maxwell-Hyslop, Robin

  Hawkins, Christopher

  Mayhew, Rt Hon Sir Patrick

  Hayes, Jerry

  Mellor, David

  Hayhoe, Rt Hon Sir Barney

  Meyer, Sir Anthony

  Hayward, Robert

  Miller, Sir Hal

  Heath, Rt Hon Edward

  Mills, Iain

  Heathcoat-Amory, David

  Miscampbell, Norman

  Heseltine, Rt Hon Michael

  Mitchell, Andrew (Gedling)

  Hicks, Mrs Maureen (Wolv' NE)

  Mitchell, Sir David

  Hicks, Robert (Cornwall SE)

  Moate, Roger

  Higgins, Rt Hon Terence L.

  Montgomery, Sir Fergus

  Hind, Kenneth

  Moore, Rt Hon John

  Hogg, Hon Douglas (Gr'th'm)

  Morris, M (N'hampton S)

  Holt, Richard

  Morrison, Sir Charles

  Hordern, Sir Peter

  Morrison, Rt Hon P (Chester)

  Howard, Rt Hon Michael

  Moss, Malcolm

  Howarth, Alan (Strat'd-on-A)

  Moynihan, Hon Colin

  Howarth, G. (Cannock & B'wd)

  Mudd, David

  Howe, Rt Hon Sir Geoffrey

  Neale, Gerrard

  Howell, Rt Hon David (G'dford)

  Nelson, Anthony

  Howell, Ralph (North Norfolk)

  Neubert, Michael

  Hughes, Robert G. (Harrow W)

  Newton, Rt Hon Tony

  Hunt, David (Wirral W)

  Nicholls, Patrick

  Hunt, Sir John (Ravensbourne)

  Nicholson, David (Taunton)

  Hunter, Andrew

  Nicholson, Emma (Devon West)

  Hurd, Rt Hon Douglas

  Norris, Steve

  Irvine, Michael

  Onslow, Rt Hon Cranley

  Irving, Sir Charles

  Oppenheim, Phillip

  Jack, Michael

  Page, Richard

  Janman, Tim

  Parkinson, Rt Hon Cecil

  Jessel, Toby

  Patnick, Irvine

  Johnson Smith, Sir Geoffrey

  Patten, Rt Hon Chris (Bath)

  Jones, Gwilym (Cardiff N)

  Patten, Rt Hon John

  Jopling, Rt Hon Michael

  Pattie, Rt Hon Sir Geoffrey

  Kellett-Bowman, Dame Elaine

  Pawsey, James

  Key, Robert

  Porter, David (Waveney)

  Kilfedder, James

  Portillo, Michael

  King, Roger (B'ham N'thfield)

  Powell, William (Corby)

  Kirkhope, Timothy

  Price, Sir David

  Knapman, Roger

  Raffan, Keith

  Knight, Greg (Derby North)

  Raison, Rt Hon Timothy

  Knight, Dame Jill (Edgbaston)

  Rathbone, Tim

  Knowles, Michael

  Redwood, John

  Knox, David

  Renton, Rt Hon Tim

  Lamont, Rt Hon Norman

  Rhodes James, Robert

  Lang, Ian

  Riddick, Graham

  Latham, Michael

  Ridley, Rt Hon Nicholas

  Lawrence, Ivan

  Ridsdale, Sir Julian

  Lawson, Rt Hon Nigel

  Rifkind, Rt Hon Malcolm

  Lee, John (Pendle)

  Roberts, Wyn (Conwy)

  Leigh, Edward (Gainsbor'gh)

  Roe, Mrs Marion

  Lennox-Boyd, Hon Mark

  Rossi, Sir Hugh

  Lester, Jim (Broxtowe)

  Rost, Peter

  Lightbown, David

  Rowe, Andrew

  Lilley, Peter

  Rumbold, Mrs Angela

  Lloyd, Sir Ian (Havant)

  Ryder, Richard

  Lloyd, Peter (Fareham)

  Sackville, Hon Tom

  Lord, Michael

  Sainsbury, Hon Tim

  Luce, Rt Hon Richard

  Sayeed, Jonathan

  Lyell, Rt Hon Sir Nicholas

  Scott, Rt Hon Nicholas

  McCrindle, Robert

  Shaw, David (Dover)

  Macfarlane, Sir Neil

  Shaw, Sir Giles (Pudsey)

  MacGregor, Rt Hon John

  Shaw, Sir Michael (Scarb')

  MacKay, Andrew (E Berkshire)

  Shephard, Mrs G. (Norfolk SW)

  125

  Shepherd, Colin (Hereford)

  Townsend, Cyril D. (B'heath)

  Shepherd, Richard (Aldridge)

  Tracey, Richard

  Shersby, Michael

  Tredinnick, David

  Skeet, Sir Trevor

  Trippier, David

  Smith, Tim (Beaconsfield)

  Trotter, Neville

  Soames, Hon Nicholas

  Twinn, Dr Ian

  Speed, Keith

  Vaughan, Sir Gerard

  Speller, Tony

  Viggers, Peter

  Spicer, Sir Jim (Dorset W)

  Waddington, Rt Hon David

  Spicer, Michael (S Worcs)

  Wakeham, Rt Hon John

  Squire, Robin

  Walden, George

  Stanbrook, Ivor

  Waller, Gary

  Stanley, Rt Hon Sir John

  Walters, Sir Dennis

  Stern, Michael

  Ward, John

  Stevens, Lewis

  Wardle, Charles (Bexhill)

  Stewart, Allan (Eastwood)

  Warren, Kenneth

  Stewart, Andy (Sherwood)

  Watts, John

  Stewart, Rt Hon Ian (Herts N)

  Wells, Bowen

  Stokes, Sir John

  Wheeler, Sir John

  Stradling Thomas, Sir John

  Whitney, Ray

  Sumberg, David

  Widdecombe, Ann

  Summerson, Hugo

  Wiggin, Jerry

  Tapsell, Sir Peter

  Winterton, Mrs Ann

  Taylor, Ian (Esher)

  Winterton, Mrs Ann

  Taylor, John M (Solihull)

  Wolfson, Mark

  Taylor, Teddy (S'end E)

  Wood, Timothy

  Tebbit, Rt Hon Norman

  Woodcock, Dr. Mike

  Temple-Morris, Peter

  Yeo, Tim

  Thatcher, Rt Hon Margaret

  Young, Sir George (Acton)

  Thompson, D. (Calder Valley)

  Younger, Rt Hon George

  Thompson, Patrick (Norwich N)

  Thorne, Neil

  Tellers for the Ayes:

  Thurnham, Peter

  Mr. Alistair Goodlad and Mr. Tony Durant.

  Townend, John (Bridlington)

  NOES

  Abbott, Ms Diane

  Cook, Frank (Stockton N)

  Adams, Allen (Paisley N)

  Cook, Robin (Livingston)

  Allen, Graham

  Corbett, Robin

  Alton, David

  Corbyn, Jeremy

  Anderson, Donald

  Cousins, Jim

  Archer, Rt Hon Peter

  Cox, Tom

  Armstrong, Hilary

  Crowther, Stan

  Ashdown, Rt Hon Paddy

  Cryer, Bob

  Ashley, Rt Hon Jack

  Cummings, John

  Ashton, Joe

  Cunliffe, Lawrence

  Banks, Tony (Newham NW)

  Cunningham, Dr John

  Barnes, Harry (Derbyshire NE)

  Dalyell, Tam

  Barnes, Mrs Rosie (Greenwich)

  Darling, Alistair

  Barron, Kevin

  Davies, Rt Hon Denzil (Llanelli)

  Battle, John

  Davies, Ron (Caerphilly)

  Beckett, Margaret

  Davis, Terry (B'ham Hodge H'l)

  Beith, A. J.

  Dewar, Donald

  Bell, Stuart

  Dixon, Don

  Benn, Rt Hon Tony

  Dobson, Frank

  Bennett, A. F. (D'nt'n & R'dish)

  Doran, Frank

  Bermingham, Gerald

  Duffy, A. E. P.

  Bidwell, Sydney

  Dunnachie, Jimmy

  Blair, Tony

  Dunwoody, Hon Mrs Gwyneth

  Boateng, Paul

  Eadie, Alexander

  Boyes, Roland

  Evans, John (St Helens N)

  Bradley, Keith

  Ewing, Harry (Falkirk E)

  Bray, Dr Jeremy

  Ewing, Mrs Margaret (Moray)

  Brown, Gordon (D'mline E)

  Fatchett, Derek

  Brown, Nicholas (Newcastle E)

  Faulds, Andrew

  Brown, Ron (Edinburgh Leith)

  Fearn, Ronald

  Buckley, George J.

  Field, Frank (Birkenhead)

  Caborn, Richard

  Fields, Terry (L'pool B G'n)

  Callaghan, Jim

  Fisher, Mark

  Campbell, Menzies (Fife NE)

  Flannery, Martin

  Campbell, Ron (Blyth Valley)

  Flynn, Paul

  Campbell-Savours, D. N.

  Foot, Rt Hon Michael

  Carlile, Alex (Mont'g)

  Foster, Derek

  Cartwright, John

  Foulkes, George

  Clark, Dr David (S Shields)

  Fraser, John

  Clarke, Tom (Monklands W)

  Fyfe, Maria

  Clay, Bob

  Galloway, George

  Clelland, David

  Garrett, John (Norwich South)

  Clwyd, Mrs Ann

  George, Bruce

  Cohen, Harry

  Godman, Dr Norman A.

  126

  Golding, Mrs Llin

  Mowlam, Marjorie

  Gordon, Mildred

  Mullin, Chris

  Gould, Bryan

  Murphy, Paul

  Graham, Thomas

  Nellist, Dave

  Grant, Bernie (Tottenham)

  Oakes, Rt Hon Gordon

  Griffiths, Nigel (Edinburgh S)

  O'Brien, William

  Griffiths, Win (Bridgend)

  O'Neill, Martin

  Grocott, Bruce

  Orme, Rt Hon Stanley

  Hardy, Peter

  Owen, Rt Hon Dr David

  Harman, Ms Harriet

  Patchett, Terry

  Hattersley, Rt Hon Roy

  Pendry, Tom

  Healey, Rt Hon Denis

  Pike, Peter L.

  Henderson, Doug

  Powell, Ray (Ogmore)

  Hinchliffe, David

  Prescott, John

  Hoey, Ms Kate (Vauxhall)

  Primarolo, Dawn

  Hogg. N. (C'nauld & Kilsyth)

  Quin, Ms Joyce

  Home Robertson, John

  Radice, Giles

  Hood, Jimmy

  Randall, Stuart

  Howarth, George (Knowsley N)

  Redmond, Martin

  Howell, Rt Hon D. (S'heath)

  Rees, Rt Hon Merlyn

  Howells, Geraint

  Richardson, Jo

  Howells, Dr. Kim (Pontypridd)

  Robertson, George

  Hoyle, Doug

  Robinson, Peter (Belfast E)

  Hughes, John (Coventry NE)

  Rogers, Allan

  Hughes, Robert (Aberdeen N)

  Rooker, Jeff

  Hughes, Roy (Newport E)

  Ross, Ernie (Dundee W)

  Hughes, Simon (Southwark)

  Rowlands, Ted

  Illsley, Eric

  Ruddock, Joan

  Janner, Greville

  Salmond, Alex

  Jones, Barry (Alyn & Deeside)

  Sedgemore, Brian

  Jones, Ieuan (Ynys Môn)

  Sheerman, Barry

  Jones, Martyn (Clwyd S W)

  Sheldon, Rt Hon Robert

  Kaufman, Rt Hon Gerald

  Shore, Rt Hon Peter

  Kennedy, Charles

  Short, Clare

  Kinnock, Rt Hon Neil

  Skinner, Dennis

  Kirkwood, Archy

  Smith, Andrew (Oxford E)

  Lamond, James

  Smith, C. (Isl'ton & F'bury)

  Leadbitter, Ted

  Smith, Rt Hon J. (Monk'ds E)

  Leighton, Ron

  Smith, J. P. (Vale of Glam)

  Lewis, Terry

  Snape, Peter

  Litherland, Robert

  Soley, Clive

  Livingstone, Ken

  Spearing, Nigel

  Livsey, Richard

  Steel, Rt Hon Sir David

  Lloyd, Tony (Stretford)

  Steinberg, Gerry

  Lofthouse, Geoffrey

  Stott, Roger

  Loyden, Eddie

  Strang, Gavin

  McAllion, John

  Straw, Jack

  McAvoy, Thomas

  Taylor, Mrs Ann (Dewsbury)

  McCartney, Ian

  Thompson, Jack (Wansbeck)

  Macdonald, Calum A.

  Turner, Dennis

  McFall, John

  Vaz, Keith

  McKay, Allen (Barnsley West)

  Wall, Pat

  McKelvey, William

  Wallace, James

  Maclennan, Robert

  Walley, Joan

  McNamara, Kevin

  Wardell, Gareth (Gower)

  McWilliam, John

  Wareing, Robert N.

  Madden, Max

  Watson, Mike (Glasgow, C)

  Mahon, Mrs Alice

  Welsh, Andrew (Angus E)

  Marek, Dr John

  Welsh, Michael (Doncaster N)

  Marshall, Jim (Leicester S)

  Wigley, Dafydd

  Martin, Michael J. (Springburn)

  Williams, Rt Hon Alan

  Martlew, Eric

  Williams, Alan W. (Carm'then)

  Maxton, John

  Wilson, Brian

  Meacher, Michael

  Winnick, David

  Meale, Alan

  Wise, Mrs Audrey

  Michie, Bill (Sheffield Heeley)

  Worthington, Tony

  Michie, Mrs Ray (Arg'l & Bute)

  Wray, Jimmy

  Moonie, Dr Lewis

  Young, David (Bolton SE)

  Morgan, Rhodri

  Morley, Elliot

  Tellers for the Noes:

  Morris, Rt Hon A. (W'shawe)

  Mr. Frank Haynes and

  Morris, Rt Hon J. (Aberavon)

  Mr. Ken Eastham.

  Question accordingly agreed to.
  Resolved,
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

  127

  (a) for zero-rating or exempting any supply;

  (b) for refunding any amount of tax;

  (c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or

  (d) for relief other than relief applying to goods of whatever description or services of whatever description.

  Mr. Speaker: I am now required under Standing Order No. 50(3) to put successively, without further debate, the Question on each of the ways and means motions, on the motions for procedure and the money resolution on the Finance Bill.

  Budget Resolutions and Economic Situation

    2. SPIRITS
    Resolved,
    That, as from 6 o'clock in the evening of 20th March 1990, the rate of duty specified in section 5 of the Alcoholic Liquor Duties Act 1979 shall be increased from £15·77 per litre of alcohol in the spirits to £17·35 per litre of alcohol in the spirits.

    Description of wine or made-wine

    Rates of duty per hectolitre

    £

    Wine or made-wine of a strength less than 2 per cent.

    11·03

    Wine or made-wine of a strength exceeding 2 per cent. but not exceeding 3 per cent.

    18·38

    Wine or made-wine of a strength exceeding 3 per cent. but not exceeding 4 per cent.

    25·73

    Wine or made-wine of a strength exceeding 4 per cent. but not exceeding 5 per cent.

    33·09

    Wine or made-wine of a strength exceeding 5 per cent. but not exceeding 5·5 per cent.

    40·44

    Wine or made-wine of a strength exceeding 5·5 per cent. but not exceeding 15 per cent. and not being sparkling

    110·28

    Sparkling wine or sparkling made-wine of a strength exceeding 5·5 per cent. but not exceeding 15 per cent.

    182·10

    Wine or made-wine of a strength exceeding 15 per cent. but not exceeding 18 per cent.

    190·20

    Wine or made-wine of a strength exceeding 18 per cent. but not exceeding 22 per cent.

    219·40

    Wine or made-wine of a strength exceeding 22 per cent.

    219·40

    plus £17·35 for every 1 per cent. or part of 1 per cent. in excess of 22 per cent.

    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    5. CIDER
    Resolved,
    That, as from 6 o'clock in the evening of 20th March 1990, the rate of duty specified in section 62(1) of the Alcoholic Liquor Duties Act 1979 shall be increased from £17·33 per hectolitre to £18·66 per hectolitre.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    6. TOBACCO PRODUCTS
    Resolved,
    That, as from 23rd March 1990, the rates of duty on cigarettes. cigars and hand-rolling tobacco specified in Schedule 1 to the Tobacco Products Duty Act 1979 shall be increased—
    128
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    3. BEER
    Resolved,
    That, as from 6 o'clock in the evening of 20th March 1990, the rate of duty specified in section 36 of the Alcoholic Duties Act 1979 shall be increased from £0·90 per hectolitre for every degree by which the original gravity of beer exceeds 1,000 degrees to £·97 per hectolitre for every such degree.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    4. WINE AND MADE-WINE
    Resolved,
    That, as from 6 o'clock in the evening of 20th March 1990, the rates of duty under sections 54 and 55 of the Alcoholic Liquor Duties Act 1979 shall be as follows—

    (a) in the case of cigarettes, to an amount equal to 21 per cent. of the retail price plus £34·91 per thousand cigarettes;

    (b) in the case of cigars, to £53·67 per kilogram; and

    (c) in the case of hand-rolling tobacco, to £56·63 per kilogram.

    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    7. HYDROCARBON OIL
    Motion made, and Question put,
    That, as from 6 o'clock in the evening of 20th March 1990—
    (1) The rates of duty specified in subsection (1) of section 6 of the Hydrocarbon Oil Duties Act 1979 shall be increased—

    (a) in the case of light oil, from £0·2044 a litre to £0·2248 a litre; and

    129

    (b) in the case of heavy oil, from £0·1729 a litre to £0·1902 a litre.

    (2) Subsection (2A) of that section (special rate of duty on petrol below 4 star) shall cease to have effect.
    (3) The rates of rebate of duty specified in subsection 11(1) of that Act shall be increased—

    (a) in the case of fuel oil, from £0·0077 a litre to £0·0083 a litre; and

    (b) in the case of gas oil, from £0·0110 a litre to £0·0118 a litre.

    (4) The rate of rebate of duty specified m section 13A(1) of that Act (unleaded petrol) shall be increased from £0·0272 a litre to £0·0299 a litre.
    (5) The rate of rebate of duty specified in section 14(1) of that Act (light oil for use as furnace oil) shall be increased from £0·0077 a litre to £0·0083 a litre.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Salmond.]
    The House divided: Ayes 340, Noes 13.

    Division No. 140]

    [10.18 pm

    AYES

    Adley, Robert

    Chope, Christopher

    Aitken, Jonathan

    Clark, Hon Alan (Plym'th S'n)

    Alexander, Richard

    Clark, Dr Michael (Rochford)

    Alison, Rt Hon Michael

    Clark, Sir W. (Croydon S)

    Allason, Rupert

    Clarke, Rt Hon K. (Rushcliffe)

    Amery, Rt Hon Julian

    Colvin, Michael

    Amess, David

    Conway, Derek

    Amos, Alan

    Coombs, Anthony (Wyre F'rest)

    Arbuthnot, James

    Coombs, Simon (Swindon)

    Arnold, Jacques (Gravesham)

    Cope, Rt Hon John

    Arnold, Tom (Hazel Grove)

    Cormack, Patrick

    Ashby, David

    Couchman, James

    Aspinwall, Jack

    Cran, James

    Atkins, Robert

    Critchley, Julian

    Atkinson, David

    Currie, Mrs Edwina

    Baker, Rt Hon K. (Mole Valley)

    Curry, David

    Baldry, Tony

    Davies, Q. (Stamf'd & Spald'g)

    Barnes, Mrs Rosie (Greenwich)

    Davis, David (Boothferry)

    Batiste, Spencer

    Day, Stephen

    Beaumont-Dark, Anthony

    Devlin, Tim

    Bellingham, Henry

    Dickens, Geoffrey

    Bendall, Vivian

    Dorrell, Stephen

    Bennett, Nicholas (Pembroke)

    Douglas-Hamilton, Lord James

    Benyon, W.

    Dover, Den

    Bevan. David Gilroy

    Dunn, Bob

    Biffen, Rt Hon John

    Dykes, Hugh

    Bonsor, Sir Nicholas

    Eggar, Tim

    Boscawen, Hon Robert

    Emery, Sir Peter

    Boswell, Tim

    Evans, David (Welwyn Hatf'd)

    Bottomley, Peter

    Evennett, David

    Bottomley, Mrs Virginia

    Fairbairn, Sir Nicholas

    Bowden, A (Brighton K'pto'n)

    Fallon, Michael

    Bowden, Gerald (Dulwich)

    Farr, Sir John

    Bowis, John

    Favell, Tony

    Boyson, Rt Hon Dr Sir Rhodes

    Fenner, Dame Peggy

    Braine, Rt Hon Sir Bernard

    Field, Barry (Isle of Wight)

    Brandon-Bravo, Martin

    Finsberg, Sir Geoffrey

    Brazier, Julian

    Fishburn, John Dudley

    Bright, Graham

    Fookes, Dame Janet

    Brown, Michael (Brigg & Cl't's)

    Forman, Nigel

    Bruce, Ian (Dorset South)

    Forth, Eric

    Budgen, Nicholas

    Fowler, Rt Hon Sir Norman

    Burns, Simon

    Fox, Sir Marcus

    Burt, Alistair

    Franks, Cecil

    Butcher, John

    Freeman, Roger

    Butler, Chris

    French, Douglas

    Butterfill, John

    Fry, Peter

    Carlisle, John, (Luton N)

    Gale, Roger

    Carlisle, Kenneth (Lincoln)

    Gardiner, George

    Carrington, Matthew

    Garel-Jones, Tristan

    Carttiss, Michael

    Gilmour, Rt Hon Sir Ian

    Cartwright, John

    Glyn, Dr Sir Alan

    Cash, William

    Goodhart, Sir Philip

    Chalker, Rt Hon Mrs Lynda

    Goodson-Wickes, Dr Charles

    Channon, Rt Hon Paul

    Gorman, Mrs Teresa

    Chapman, Sydney

    Gorst, John

    130

    Gow, Ian

    Maclean, David

    Grant, Sir Anthony (CambsSW)

    McLoughlin, Patrick

    Greenway, Harry (Ealing N)

    McNair-Wilson, Sir Michael

    Greenway, John (Ryedale)

    McNair-Wilson, Sir Patrick

    Gregory, Conal

    Madel, David

    Griffiths, Peter (Portsmouth N)

    Major, Rt Hon John

    Grist, Ian

    Malins, Humfrey

    Ground, Patrick

    Mans, Keith

    Grylls, Michael

    Maples, John

    Hague, William

    Marland, Paul

    Hamilton, Neil (Tatton)

    Marshall, John (Hendon S)

    Hampson, Dr Keith

    Marshall, Michael (Arundel)

    Hanley, Jeremy

    Mates, Michael

    Hannam, John

    Maude, Hon Francis

    Hargreaves, A. (B'ham H'll Gr')

    Mawhinney, Dr Brian

    Hargreaves, Ken (Hyndburn)

    Maxwell-Hyslop, Robin

    Harris, David

    Mayhew, Rt Hon Sir Patrick

    Haselhurst, Alan

    Mellor, David

    Hawkins, Christopher

    Meyer, Sir Anthony

    Hayes, Jerry

    Miller, Sir Hal

    Hayhoe, Rt Hon Sir Barney

    Mills, Iain

    Hayward, Robert

    Miscampbell, Norman

    Heath, Rt Hon Edward

    Mitchell, Andrew (Gedling)

    Heathcoat-Amory, David

    Mitchell, Sir David

    Heseltine, Rt Hon Michael

    Moate, Roger

    Hicks, Mrs Maureen (Wolv' NE)

    Montgomery, Sir Fergus

    Hicks, Robert (Cornwall SE)

    Moore, Rt Hon John

    Higgins, Rt Hon Terence L.

    Morris, M (N'hampton S)

    Hind, Kenneth

    Morrison, Sir Charles

    Hogg, Hon Douglas (Gr'th'm)

    Morrison, Rt Hon P (Chester)

    Holt, Richard

    Moss, Malcolm

    Hordern, Sir Peter

    Moynihan, Hon Colin

    Howard, Rt Hon Michael

    Mudd, David

    Howarth, Alan (Strat'd-on-A)

    Neale, Gerrard

    Howarth, G. (Cannock & B'wd)

    Nelson, Anthony

    Howe, Rt Hon Sir Geoffrey

    Neubert, Michael

    Howell, Rt Hon David (G'dford)

    Newton, Rt Hon Tony

    Howell, Ralph (North Norfolk)

    Nicholls, Patrick

    Hughes, Robert G. (Harrow W)

    Nicholson, David (Taunton)

    Hunt, David (Wirral W)

    Nicholson, Emma (Devon West)

    Hunt, Sir John (Ravensbourne)

    Norris, Steve

    Hunter, Andrew

    Onslow, Rt Hon Cranley

    Hurd, Rt Hon Douglas

    Oppenheim, Phillip

    Irvine, Michael

    Owen, Rt Hon Dr David

    Irving, Sir Charles

    Page, Richard

    Jack, Michael

    Parkinson, Rt Hon Cecil

    Janman, Tim

    Patnick, Irvine

    Jessel, Toby

    Patten, Rt Hon Chris (Bath)

    Johnson Smith, Sir Geoffrey

    Patten, Rt Hon John

    Jones, Gwilym (Cardiff N)

    Pattie, Rt Hon Sir Geoffrey

    Jopling, Rt Hon Michael

    Pawsey, James

    Kellett-Bowman, Dame Elaine

    Porter, Barry (Wirral S)

    Key, Robert

    Porter, David (Waveney)

    King, Roger (B'ham N'thfield)

    Portillo, Michael

    Kirkhope, Timothy

    Powell, William (Corby)

    Knapman, Roger

    Price, Sir David

    Knight, Greg (Derby North)

    Raffan, Keith

    Knight, Dame Jill (Edgbaston)

    Raison, Rt Hon Timothy

    Knowles, Michael

    Rathbone, Tim

    Knox, David

    Redwood, John

    Lamont, Rt Hon Norman

    Renton, Rt Hon Tim

    Lang, Ian

    Rhodes James, Robert

    Latham, Michael

    Riddick, Graham

    Lawrence, Ivan

    Ridley, Rt Hon Nicholas

    Lawson, Rt Hon Nigel

    Ridsdale, Sir Julian

    Lee, John (Pendle)

    Rifkind, Rt Hon Malcolm

    Leigh, Edward (Gainsbor'gh)

    Roberts, Wyn (Conwy)

    Lennox-Boyd, Hon Mark

    Roe, Mrs Marion

    Lester, Jim (Broxtowe)

    Rossi, Sir Hugh

    Lightbown, David

    Rost, Peter

    Lilley, Peter

    Rowe, Andrew

    Lloyd, Sir Ian (Havant)

    Rumbold, Mrs Angela

    Lloyd, Peter (Fareham)

    Ryder, Richard

    Lord, Michael

    Sackville, Hon Tom

    Luce, Rt Hon Richard

    Sainsbury, Hon Tim

    Lyell, Rt Hon Sir Nicholas

    Sayeed, Jonathan

    McCrindle, Robert

    Scott, Rt Hon Nicholas

    Macfarlane, Sir Neil

    Shaw, David (Dover)

    MacGregor, Rt Hon John

    Shaw, Sir Giles (Pudsey)

    MacKay, Andrew (E Berkshire)

    Shaw, Sir Michael (Scarb')

    131

    Shephard, Mrs G. (Norfolk SW)

    Taylor, Ian (Esher)

    Shepherd, Colin (Hereford)

    Taylor, John M (Solihull)

    Shepherd, Richard (Aldridge)

    Taylor, Teddy (S'end E)

    Shersby, Michael

    Tebbit, Rt Hon Norman

    Skeet, Sir Trevor

    Temple-Morris, Peter

    Smith, Tim (Beaconsfield)

    Thatcher, Rt Hon Margaret

    Soames, Hon Nicholas

    Thompson, D. (Calder Valley)

    Speed, Keith

    Thompson, Patrick (Norwich N)

    Speller, Tony

    Thorne, Neil

    Spicer, Sir Jim (Dorset W)

    Thurnham, Peter

    Spicer, Michael (S Worcs)

    Townend, John (Bridlington)

    Squire, Robin

    Townsend, Cyril D. (B'heath)

    Stanbrook, Ivor

    Tracey, Richard

    Stanley, Rt Hon Sir John

    Tredinnick, David

    Stern, Michael

    Trippier, David

    Stevens, Lewis

    Trotter, Neville

    Stewart, Allan (Eastwood)

    Twinn, Dr Ian

    Stewart, Andy (Sherwood)

    Vaughan, Sir Gerard

    Stewart, Rt Hon Ian (Herts N)

    Viggers, Peter

    Stokes, Sir John

    Waddington, Rt Hon David

    Stradling Thomas, Sir John

    Wakeham, Rt Hon John

    Sumberg, David

    Walden, George

    Summerson, Hugo

    Waller, Gary

    Tapsell, Sir Peter

    Walters, Sir Dennis

    132

    Ward, John

    Wolfson, Mark

    Wardle, Charles (Bexhill)

    Wood, Timothy

    Warren, Kenneth

    Woodcock, Dr. Mike

    Watts, John

    Yeo, Tim

    Wells, Bowen

    Young, Sir George (Acton)

    Wheeler, Sir John

    Younger, Rt Hon George

    Whitney, Ray

    Widdecombe, Ann

    Tellers for the Ayes:

    Wiggin, Jerry

    Mr. Alastair Goodlad and

    Winterton, Mrs Ann

    Mr. Tony Durant.

    Winterton, Nicholas

    NOES

    Corbyn, Jeremy

    Salmond, Alex

    Cryer, Bob

    Skinner, Dennis

    Ewing, Mrs Margaret (Moray)

    Smyth, Rev Martin (Belfast S)

    Hughes, John (Coventry NE)

    Wigley, Dafydd

    Kilfedder, James

    Molyneaux, Rt Hon James

    Tellers for the Noes:

    Nellist, Dave

    Mr. Andrew Welsh and

    Robinson, Peter (Belfast E)

    Mr. Ieuan Wyn Jones.

    Ross, William (Londonderry E)

    Question accordingly agreed to.

    8. VEHICLES EXCISE DUTY (RATES)
    Resolved,
    That the Vehicles (Excise) Act 1971 ("the 1971 Act") and the Vehicles (Excise) Act (Northern Ireland) 1972 ("the 1972 Act") shall have effect, in relation to licences taken out after 20th March 1990, with the amendments set out below.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
    (1) In Schedule 3 to each Act (annual rates of duty on haulage vehicles)—

    TABLE A

    RATES OF DUTY ON RIGID GOODS VEHICLES EXCEEDING 12,000 KILOGRAMS PLATED GROSS WEIGHT GENERAL RATES

    Plated gross weight of vehicle

    Rate of duty

    (1)

    (2)

    (3)

    (4)

    (5)

    Exceeding

    Not exceeding

    Two axle vehicle

    Three axle vehicle

    Four or more axle vehicle

    kgs

    kgs

    £

    £

    £

    12,000

    13,000

    450·00

    470·00

    340·00

    13,000

    14,000

    630·00

    470·00

    340·00

    14,000

    15,000

    810·00

    470·00

    340·00

    15,000

    17,000

    1,280·00

    470·00

    340·00

    17,000

    19,000

    —

    820·00

    340·00

    19,000

    21,000

    —

    990·00

    340·00

    21,000

    23,000

    —

    1,420·00

    490·00

    23,000

    25,000

    —

    2,160·00

    800·00

    25,000

    27,000

    —

    —

    1,420·00

    27,000

    29,000

    —

    —

    2,240·00

    29,000

    30,490

    —

    —

    3,250·00

    TABLE A(1)

    RATES OF DUTY ON RIGID GOODS VEHICLES EXCEEDING 12,000 KILOGRAMS PLATED GROSS WEIGHT RATES FOR FARMERS' GOODS VEHICLES

    Plated gross weight of vehicle

    Rate of duty

    1.

    2.

    3.

    4.

    5.

    Exceeding

    Not exceeding

    Two axle vehicle

    Three axle vehicle

    Four or more axle vehicle

    kgs

    kgs

    £

    £

    £

    12,000

    13,000

    270·00

    280·00

    205·00

    13,000

    14,000

    380·00

    280·00

    205·00

    14,000

    15,000

    490·00

    280·00

    205·00

    15,000

    17,000

    770·00

    280·00

    205·00

    17,000

    19,000

    —

    490·00

    205·00

    19,000

    21,000

    —

    595·00

    205·00

    21,000

    23,000

    —

    850·00

    295·00

    23,000

    25,000

    —

    1,295·00

    480·00

    25,000

    27,000

    —

    —

    850·00

    27,000

    29,000

    —

    —

    1,345·00

    29,000

    30,490

    —

    —

    1,950·00

    (a) in paragraph 1 of Part I, for the words from "according" to the end there shall be substituted the words "be the rate specified in relation to vehicles of that description in the second column of that Part"; and

    (b) for the Table set out in Part II there shall be substituted the Table set out below:

    Description of vehicle

    Rate of duty

    £

    1. Special machines

    16·00

    2. Haulage vehicles, being showmen's vehicles

    90·00

    3. Haulage vehicles, not being showmen's vehicles

    330·00

    4. Recovery vehicles

    50·00

    (2) For the Tables set out in Part II of Schedule 4 to the 1971 Act there shall be substituted the Tables set out below:

    TABLE A(2)

    RATES OF DUTY ON RIGID GOODS VEHICLES EXCEEDING 12,000 KILOGRAMS PLATED GROSS WEIGHT RATES FOR SHOWMEN'S GOODS VEHICLES

    Plated gross weight of vehicle

    Rate of duty

    1.

    2.

    3.

    4.

    5.

    Exceeding

    Not exceeding

    Two axle vehicle

    Three axle vehicle

    Four or more axle vehicle

    kgs

    kgs

    £

    £

    £

    12,000

    13,000

    115·00

    120·00

    90·00

    13,000

    14,000

    160·00

    120·00

    90·00

    14,000

    15,000

    205·00

    120·00

    90·00

    15,000

    17,000

    320·00

    120·00

    90·00

    17,000

    19,000

    —

    205·00

    90·00

    19,000

    21,000

    —

    250·00

    90·00

    21,000

    23,000

    —

    355·00

    125·00

    23,000

    25,000

    —

    540·00

    200·00

    25,000

    27,000

    —

    —

    355·00

    27,000

    29,000

    —

    —

    560·00

    29,000

    30,490

    —

    —

    815·00

    TABLE B

    SUPPLEMENTARY RATES OF DUTY ON RIGID GOODS VEHICLES EXCEEDING 12,000 KILOGRAMS PLATED

    GROSS WEIGHT USED FOR DRAWING TRAILERS EXCEEDING 4,000 KILOGRAMS PLATED GROSS WEIGHT GENERAL RATES

    Plated gross weight of trailer

    Exceeding

    Not exceeding

    Duty supplement

    kgs

    kgs

    £

    4,000

    8,000

    130·00

    8,000

    10,000

    130·00

    10,000

    12,000

    130·00

    12,000

    14,000

    360·00

    14,000

    —

    360·00

    TABLE B(1)

    SUPPLEMENTARY RATES OF DUTY ON RIGID GOODS VEHICLES EXCEEDING 12,000 KILOGRAMS PLATED

    GROSS WEIGHT USED FOR DRAWING TRAILERS EXCEEDING 4,000 KILOGRAMS PLATED GROSS WEIGHT

    RATES FOR FARMERS' GOODS VEHICLES

    Plated gross weight of trailer

    Exceeding

    Not exceeding

    Duty supplement

    kgs

    kgs

    £

    4,000

    8,000

    130·00

    8,000

    10,000

    130·00

    10,000

    12,000

    130·00

    12,000

    14,000

    360·00

    14,000

    —

    360·00

    TABLE B(2)

    SUPPLEMENTARY RATES OF DUTY ON RIGID GOODS VEHICLES EXCEEDING 12,000 KILOGRAMS PLATED

    GROSS WEIGHT USED FOR DRAWING TRAILERS EXCEEDING 4,000 KILOGRAMS PLATED GROSS WEIGHT

    RATES FOR SHOWMEN'S GOODS VEHICLES

    Plated gross weight of trailer

    Exceeding

    Not exceeding

    Duty supplement

    kgs

    kgs

    £

    —

    —

    80·00

    TABLE C

    RATES OF DUTY ON TRACTOR UNITS EXCEEDING 12,000 KILOGRAMS PLATED TRAIN WEIGHT AND HAVING ONLY 2 AXLES

    GENERAL RATES

    Plated train weight of tractor unit

    Rate of duty

    1.

    2.

    3.

    4.

    5.

    Exceeding

    Not exceeding

    For a tractor unit to be used with semi-trailers with any number of axles

    For a tractor unit to be used only with semi-trailers with not less than two axles

    For a tractor unit to be used only with semi-trailers with not less than three axles

    kgs

    kgs

    £

    £

    £

    12,000

    14,000

    440·00

    440·00

    440·00

    14,000

    16,000

    440·00

    440·00

    440·00

    16,000

    18,000

    500·00

    440·00

    440·00

    18,000

    20,000

    500·00

    440·00

    440·00

    20,000

    22,000

    780·00

    440·00

    440·00

    22,000

    23,000

    780·00

    440·00

    440·00

    23,000

    25,000

    1,150·00

    570·00

    440·00

    25,000

    26,000

    1,150·00

    570·00

    440·00

    26,000

    28,000

    1,150·00

    1,090·00

    440·00

    28,000

    29,000

    1,680·00

    1,680·00

    1,050·00

    29,000

    31,000

    1,680·00

    1,680·00

    1,050·00

    31,000

    33,000

    2,450·00

    2,450·00

    1,680·00

    33,000

    34,000

    2,450·00

    2,450·00

    1,680·00

    34,000

    36,000

    2,750·00

    2,750·00

    2,750·00

    36,000

    38,000

    3,100·00

    3,100·00

    3,100·00

    TABLE C(1)

    RATES OF DUTY ON TRACTOR UNITS EXCEEDING 12,000 KILOGRAMS PLATED TRAIN WEIGHT AND HAVING ONLY 2 AXLES

    RATES FOR FARMERS' GOODS VEHICLES

    Plated train weight of tractor unit

    Rate of duty

    1.

    2.

    3.

    4.

    5.

    Exceeding

    Not exceeding

    For a tractor unit to be used with semi-trailers with any number of axles

    For a tractor unit to be used only with semi-trailers with not less than two axles

    For a tractor unit to be used only with semi-trailers with not less than three axles

    kgs

    kgs

    £

    £

    £

    12,000

    14,000

    265·00

    265·00

    265·00

    14,000

    16,000

    265·00

    265·00

    265·00

    16,000

    18,000

    300·00

    265·00

    265·00

    18,000

    20,000

    300·00

    265·00

    265·00

    20,000

    22,000

    470·00

    265·00

    265·00

    22,000

    23,000

    470·00

    265·00

    265·00

    23,000

    25,000

    690·00

    340·00

    265·00

    25,000

    26,000

    690·00

    340·00

    265·00

    26,000

    28,000

    690·00

    655·00

    265·00

    28,000

    29,000

    1,010·00

    1,010·00

    630·00

    29,000

    31,000

    1,010·00

    1,010·00

    630·00

    31,000

    33,000

    1,470·00

    1,470·00

    1,010·00

    33,000

    34,000

    1,470·00

    1,470·00

    1,010·00

    34,000

    36,000

    1,650·00

    1,650·00

    1,650·00

    36,000

    38,000

    1,860·00

    1,860·00

    1,860·00

    TABLE C(2)

    RATES OF DUTY ON TRACTOR UNITS EXCEEDING 12,000 KILOGRAMS PLATED TRAIN WEIGHT AND HAVING ONLY 2 AXLES

    RATES FOR SHOWMEN'S GOODS VEHICLES

    Plated train weight of tractor unit

    Rate of duty

    1.

    2.

    3.

    4.

    5.

    Exceeding

    Not exceeding

    For a tractor unit to be used with semi-trailers with any number of axles

    For a tractor unit to be used only with semi-trailers with not less than two axles

    For a tractor unit to be used only with semi-trailers with not less than three axles

    kgs

    kgs

    £

    £

    £

    12,000

    14,000

    110·00

    110·00

    110·00

    14,000

    16,000

    110·00

    110·00

    110·00

    16,000

    18,000

    125·00

    110·00

    110·00

    18,000

    20,000

    125·00

    110·00

    110·00

    20,000

    22,000

    195·00

    110·00

    110·00

    22,000

    23,000

    195·00

    110·00

    110·00

    23,000

    25,000

    290·00

    145·00

    110·00

    25,000

    26,000

    290·00

    145·00

    110·00

    26,000

    28,000

    290·00

    275·00

    110·00

    28,000

    29,000

    420·00

    420·00

    265·00

    29,000

    31,000

    420·00

    420·00

    265·00

    31,000

    33,000

    615·00

    615·00

    420·00

    33,000

    34,000

    615·00

    615·00

    420·00

    34,000

    36,000

    690·00

    690·00

    690·00

    36,000

    38,000

    775·00

    775·00

    775·00

    TABLE D

    RATES OF DUTY ON TRACTOR UNITS EXCEEDING 12,000 KILOGRAMS PLATED TRAIN WEIGHT AND HAVING 3 OR MORE AXLES

    GENERAL RATES

    Plated train weight of tractor unit

    Rate of duty

    1.

    2.

    3.

    4.

    5.

    Exceeding

    Not exceeding

    For a tractor unit to be used with semi-trailers with any number of axles

    For a tractor unit to be used only with semi-trailers with not less than two axles

    For a tractor unit to be used only with semi-trailers with not less than three axles

    kgs

    kgs

    £

    £

    £

    12,000

    14,000

    440·00

    440·00

    440·00

    14,000

    16,000

    440·00

    440·00

    440·00

    16,000

    18,000

    440·00

    440·00

    440·00

    18,000

    20,000

    440·00

    440·00

    440·00

    20,000

    22,000

    440·00

    440·00

    440·00

    22,000

    23,000

    440·00

    440·00

    440·00

    23,000

    25,000

    570·00

    440·00

    440·00

    25,000

    26,000

    570·00

    440·00

    440·00

    26,000

    28,000

    1,090·00

    440·00

    440·00

    28,000

    29,000

    1,680·00

    640·00

    440·00

    29,000

    31,000

    1,680·00

    640·00

    440·00

    31,000

    33,000

    2,450·00

    970·00

    440·00

    33,000

    34,000

    2,450·00

    1,420·00

    550·00

    34,000

    36,000

    2,450·00

    2,030·00

    830·00

    36,000

    38,000

    2,730·00

    2,730·00

    1,240·00

    TABLE D(1)

    RATES OF DUTY ON TRACTOR UNITS EXCEEDING 12,000 KILOGRAMS PLATED TRAIN WEIGHT AND HAVING THREE OR MORE AXLES

    RATES FOR FARMERS' GOODS VEHICLES

    Plated train weight of tractor unit

    Rate of duty

    1.

    2.

    3.

    4.

    5.

    Exceeding

    Not exceeding

    For a tractor unit to be used with semi-trailers with any number of axles

    For a tractor unit to be used only with semi-trailers with not less than two axles

    For a tractor unit to be used only with semi-trailers with not less than three axles

    kgs

    kgs

    £

    £

    £

    12,000

    14,000

    265·00

    265·00

    265·00

    14,000

    16,000

    265·00

    265·00

    265·00

    16,000

    18,000

    265·00

    265·00

    265·00

    18,000

    20,000

    265·00

    265·00

    265·00

    20,000

    22,000

    265·00

    265·00

    265·00

    22,000

    23,000

    265·00

    265·00

    265·00

    23,000

    25,000

    340·00

    265·00

    265·00

    25,000

    26,000

    340·00

    265·00

    265·00

    26,000

    28,000

    655·00

    265·00

    265·00

    28,000

    29,000

    1,010·00

    385·00

    265·00

    29,000

    31,000

    1,010·00

    385·00

    265·00

    31,000

    33,000

    1,470·00

    580·00

    265·00

    33,000

    34,000

    1,470·00

    850·00

    330·00

    34,000

    36,000

    1,470·00

    1,220·00

    500·00

    36,000

    38,000

    1,640·00

    1,640·00

    745·00

    TABLE D(2)

    RATES OF DUTY ON TRACTOR UNITS EXCEEDING 12,000 KILOGRAMS PLATED TRAIN WEIGHT AND HAVING 3 OR MORE AXLES

    RATES FOR SHOWMEN'S GOODS VEHICLES

    Plated train weight of tractor unit

    Rate of duty

    1.

    2.

    3.

    4.

    5.

    Exceeding

    Not exceeding

    For a tractor unit to be used with semi-trailers with any number of axles

    For a tractor unit to be used only with semi-trailers with not less than two axles

    For a tractor unit to be used only with semi-trailers with not less than three axles

    kgs

    kgs

    £

    £

    £

    12,000

    14,000

    110·00

    110·00

    110·00

    14,000

    16,000

    110·00

    110·00

    110·00

    16,000

    18,000

    110·00

    110·00

    110·00

    18,000

    20,000

    110·00

    110·00

    110·00

    20,000

    22,000

    110·00

    110·00

    110·00

    22,000

    23,000

    110·00

    110·00

    110·00

    23,000

    25,000

    145·00

    110·00

    110·00

    25,000

    26,000

    145·00

    110·00

    110·00

    26,000

    28,000

    275·00

    110·00

    110·00

    28,000

    29,000

    420·00

    160·00

    110·00

    29,000

    31,000

    420·00

    160·00

    110·00

    31,000

    33,000

    615·00

    245·00

    110·00

    33,000

    34,000

    615·00

    355·00

    140·00

    34,000

    36,000

    615·00

    510·00

    210·00

    36,000

    38,000

    685·00

    685·00

    310·00

    (3) The Tables set out above shall also be substituted for the Tables set out in Part II of Schedule 4 to the 1972 Act, but with the following modifications—
    (a) for the words "plated gross weight", in each place where they occur, there shall be substituted the words "relevant maximum weight", and
    (b) for the words "plated train weight", in each place where they occur, there shall be substituted the words "relevant maximum train weight".
    (4) In paragraph 2 of Schedule 4A to each Act (annual rates of duty on vehicles used for carrying or drawing exceptional loads) for "£3,100" there shall be substituted "£3,250".

    9. VEHICLES EXCISE DUTY (EXEMPTIONS)
    Resolved,
    That, as from 21st March 1990, section 4 of each of the Vehicles (Excise) Act 1971 and the Vehicles (Excise) Act (Northern Ireland) 1972 (exemptions) shall have effect with the amendments set out below.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
    (1) In subsection (1) the following paragraph shall be inserted after paragraph (c)—
    "(ca) veterinary ambulances;".
    (2) In subsection (1) the following paragraphs shall be inserted after paragraph (k)—
    "(ka) vehicles (other than mowing machines) neither constructed nor adapted for use nor used for the carriage of a driver or passenger;
    (kb) vehicles (other than ambulances) used for the carriage of disabled persons by bodies for the time being recognised for the purposes of this paragraph by the Secretary of State;".
    (3) The following subsections shall be inserted after subsection (1)—
    "(1A) The Secretary of State shall recognise a body for the purposes of subsection (1)(kb) above if, on application made to him in such manner as he may specify, it appears to him that the body is concerned with the care of disabled persons.
    (1B) The issue by the Secretary of State of a nil licence in respect of a mechanically propelled vehicle shall be treated, where the document is issued by virtue of paragraph (kb) of subsection (1) above, as recognition by him for the purposes of that paragraph of the body by reference to whose use of the vehicle the document is issued.
    (1C) The Secretary of State may withdraw recognition of a body for the purposes of subsection (1)(kb) above if it appears to him that the body is no longer concerned with the care of disabled persons.
    (1D) The reference in subsection (1B) above to the issue by the Secretary of State of a nil licence is a reference to the issue by him in accordance with regulations under this Act of a document which—

    (a) is in the form of a vehicle licence, and

    (b) has the word "NIL" marked in the space provided for indicating the amount of duty payable."

    (4) In subsection (2) the following definitions shall be inserted before the definition of "road construction vehicle"—
    "'ambulance' means a vehicle which—

    (a) is constructed or adapted for, and used for no other purpose than, the carriage of sick, injured or disabled persons to or from welfare centres or places where medical or dental treatment is given; and

    (b) is readily identifiable as a vehicle used for the carriage of such persons by virtue of being marked 'Ambulance' on both sides;

    'disabled person' means a person suffering from a physical or mental defect or disability;
    'veterinary ambulance' means a vehicle which—

    145

    (a) is used for no other purpose than the carriage of sick or injured animals to or from places where veterinary treatment is given; and

    (b) is readily identifiable as a vehicle used for the carriage of such animals by virtue of being marked 'Veterinary Ambulance' on both sides;".

    10. VALUE ADDED TAX (REGISTRATION)
    Resolved,
    That—
    (1) The Value Added Tax Act 1983 shall be amended as follows.
    (2) for paragraph 1(1) to (3) of Schedule 1 (registration) there shall be substituted—
    "(1) Subject to sub-paragraphs (3) to (5) below, a person who makes taxable supplies but is not registered becomes liable to be registered—

    (a) at the end of any month, if the value of his taxable supplies in the period of one year then ending has exceeded £25,400; or

    (b) at any time, if there are reasonable grounds for believing that the value of his taxable supplies in the period of thirty days then beginning will exceed £25,400.

    (2) Where a business carried on by a taxable person is transferred to another person as a going concern and the transferee is not registered at the time of the transfer, then subject to sub-paragraphs (3) to (5) below, the transferee becomes liable to be registered at that time if—

    (a) the value of his taxable supplies in the period of one year ending at the time of the transfer has exceeded £25,400; or

    (b) there are reasonable grounds for believing that the value of his taxable supplies in the period of thirty days beginning at the time of the transfer will exceed £25,400.

    (3) A person does not become liable to be registered by virtue of sub-paragraph (1)(a) or (2)(a) above if the Commissioners are satisfied that the value of his taxable supplies in the period of one year beginning at the time at which, apart from this sub-paragraph, he would become liable to be registered will not exceed £24,400."
    (3) In paragraph 1(4) of Schedule 1 after "(1)(a)" there shall be inserted "or (2)(a)".
    (4) In paragraph 1(5) of Schedule 1 after "sub-paragraph (1)" there shall be inserted "or (2)".
    (5) In paragraph 1(6) of Schedule 1 after "sub-paragraph (1)" there shall be inserted "or (2)".
    (6) For paragraphs 3 and 4 of Schedule 1 there shall be substituted—
    "3.—(1) A person who becomes liable to be registered by virtue of paragraph 1(1)(a) above shall notify the Commissioners of the liability within thirty days of the end of the relevant month.
    (2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the end of the month following the relevant month or from such earlier date as may be agreed between them and him.
    (3) In this paragraph "the relevant month", in relation to a person who becomes liable to be registered, means the month at the end of which he becomes liable to be registered.
    4.—(1) A person who becomes liable to be registered by virtue of paragraph 1(1)(b) above shall notify the Commissioners of the liability before the end of the period by reference to which the liability arises.
    (2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the beginning of the period by reference to which the liability arises.
    4A.—(1) A person who becomes liable to be registered by virtue of paragraph 1(2) above shall notify the Commissioners of the liability within thirty days of the time when the business is transferred.
    (2) The Commissioners shall register any such person (whether or not he so notifies them) with effect from the time when the business is transferred.
    4B. Where a person becomes liable to be registered by virtue of paragraph 1(1)(a) above and by virtue of paragraph
    146
    1(1)(b) or 1(2) above at the same time, the Commissioners shall register him in accordance with paragraph 4(2) or 4A(2) above, as the case may be, rather than paragraph 3(2) above."
    (7) Section 33(1A) (registration of transfereee of business) shall cease to have effect.
    (8) In consequence of the amendment of paragraph 1, in section 28(1) (registration of local authorities) for "1(a)(ii)" there shall be substituted "1(1)(a)".
    (9). Paragraphs (2) to (5) and (8) above shall come into force on 21 March 1990.
    (10) Paragraphs (6) and (7) above apply in relation to persons who become liable to be registered after 20 March 1990.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    11. VALUE ADDED TAX (SUPPLIES TO GROUPS)
    Resolved,
    That, in relation to transfers of assets made on or after 1st April 1990, section 29A of the Value Added Tax Act 1983 shall have effect with the following amendments—

    (1) In subsection (1) for "and (3)" there shall be substituted "to (3A)".

    (2) The following subsection shall be inserted after subsection (3)—

    "(3A) Subsection (4) below shall not apply to the extent that the chargeable assets consist of capital items in respect of which regulations made under section 15(3) and
    (4) above, and in force when the assets are transferred, provide for adjustment to the deduction of input tax."
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    12. VALUE ADDED TAX (DOMESTIC ACCOMMODATION)
    Resolved,
    That provision may be made about the definition of "input tax" in relation to goods or services used or to be used in connection with the provision by a company of accommodation used or to be used for domestic purposes by a director of the company or a person connected with a director of the company.

    13. VALUE ADDED TAX (GOODS SHIPPED AS STORES)
    Resolved,
    That provision may be made restricting section 16(6) of the Value Added Tax Act 1983.

    14. INCOME TAX (CHARGE AND RATES FOR 1990–91)
    Resolved,
    That income tax shall be charged for the year 1990–91, and—

    (a) the basic rate shall be 25 per cent.;

    (b) the basic rate limit shall be £20,700;

    (c) the higher rate shall be 40 per cent..; and

    (d) section 1(4) of the Income and Corporation Taxes Act 1988 (indexation) shall not apply.

    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    15. INCOME TAX (OPERATIVE DATE OF INDEXATION FOR PAYE)
    Resolved,
    That in sections 1(5) and 257C(2) of the Income and Corporation Taxes Act 1988, for the words from "between"

    147
    to the end there shall be substituted the words "during the period beginning with 6th April and ending with 17th May in the year of assessment."
    And it hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    16. RELIEF FOR BLIND PERSONS
    Resolved,
    That—
    (1) In section 265(1) of the Income and Corporation Taxes Act 1988, for "£540" there shall be substituted "£1,080"
    (2) This Resolution shall not require any change to be made in the amounts deductible or repayable under section 203 of that Act (pay as you earn) before 18th May 1990.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    17. RELIEF FOR INTEREST (LIMIT FOR 1990–91)
    Resolved,
    That, for the year 1990–91, the qualifying maximum defined in section 367(5) of the Income and Corporation Taxes Act 1988 (limit on relief for interest on certain loans) shall be £30,000.

    PART 1

    TABLES OF FLAT RATE CASH EQUIVALENTS

    TABLE A

    Cars with an original market value up to £19,250 and having a cylinder capacity

    Cylinder capacity of car in cubic centimetres

    Age of car at end of relevant year of assessment

    Under 4 years

    4 years or more

    1400 or less

    £1,700

    £1,150

    More than 1400 but not more than 2000

    £2,200

    £1,500

    More than 2000

    £3,550

    £2,350

    TABLE B

    Cars with an original market value up to £19,250 and not having a cylinder capacity

    Original market value of car

    Age of car at end of relevant year of assessment

    Under 4 years

    4 years or more

    Less than £6,000

    £1,700

    £1,150

    £6,000 or more but less than £8,500

    £2,200

    £1,500

    £8,500 or more but not more than £19,250

    £3,550

    £2,350

    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—

    18. CORPORATION TAX (CHARGE AND RATE FOR FINANCIAL YEAR 1990)
    Resolved,
    That corporation tax shall be charged for the financial year 1990 at the rate of 35 per cent.—

    19. CORPORATION TAX (SMALL COMPANIES)
    Resolved,
    That for the financial year 1990—

    (a) the small companies' rate shall be 25 per cent., and

    (b) the fraction mentioned in section 13(2) of the Income and Corporation Taxes Act 1988 shall be one-fortieth.—

    20. BENEFITS IN KIND (CARS)
    Resolved,
    That—
    (1) For the year 1990–91 and subsequent years of assessment, Schedule 6 to the Income and Corporation Taxes Act 1988 (taxation of directors and others in respect of cars) shall have effect with the substitution of Part I (tables of flat rate cash equivalents) of the following—

    TABLE C

    Cars with an original market value of more than £19,250

    Original market value of car

    Age of car at end of relevant year of assessment

    Under 4 years

    4 years or more

    More than £19,250 but not more than £29,000

    £4,600

    £3,100

    More than £29,000

    £7,400

    £4,900

    (2) This Resolution shall not require any change to be made in the amounts deductible or repayable under section 203 of the Income and Corporation Taxes Act 1988 (pay as you earn) before 18th May 1990.
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    21. CHARITIES
    Resolved,
    That, for the year 1990–91 and subsequent years of assessment, section 202(7) of the Income and Corporation Taxes Act 1988 (which limits to £480 the payroll deductions attracting relief) shall have effect with the substitution of "£600" for "£480".
    And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

    22. EMPLOYEE SHARE OWNERSHIP TRUSTS
    Resolved,
    That provision may be made in relation to—

    (a) assets acquired with consideration provided on disposals to trustees of employee share ownership trusts;

    (b) property representing such assets, directly or indirectly.

    23. INSURANCE COMPANIES AND FRIENDLY SOCIETIES
    Resolved,
    That further provision, including provision having retrospective effect, may be made about the taxation of insurance companies and friendly societies.

    24. COLLECTIVE INVESTMENT SCHEMES
    Resolved,
    That provision may be made about collective investment schemes and investors in them.

    25. SECURITIES
    Resolved,
    That charges to income tax, capital gains tax and corporation tax (including charges having retrospective effect) may be imposed by provisions about securities.

    26. CAPITAL GAINS (OIL INDUSTRY ASSETS ETC.)
    Resolved,
    That provision may be made for the purpose of capital gains tax and corporation tax on chargeable gains—

    (a) excluding from an election under section 96(5) of the Finance Act 1988 certain shares deriving value, directly or indirectly, from certain assets and rights associated with oil exploration or exploitation; and

    (b) limiting or extinguishing the amount of the losses on certain disposals of, or of interests in, such shares and other assets associated with the oil industry.

    27. CORPORATION TAX (EFFECT OF REPAYMENT OF PETROLEUM REVENUE TAX)
    Resolved,
    That provision may be made with respect to the effect of a repayment of petroleum revenue tax on the computation of a company's income from oil extraction activities or oil rights.

    28. DUAL RESIDENT COMPANIES
    Resolved,
    That provision may be made about companies resident in the United Kingdom but regarded for the purposes of double taxation arrangements as resident in a territory outside the United Kingdom.—

    29. EUROPEAN ECONOMIC INTEREST GROUPINGS
    Resolved,
    That provision (including provision having retrospective effect) may be made about the taxation of income and gains in the case of European Economic Interest Groupings.

    30. CAPITAL GAINS (ANNUAL EXEMPT AMOUNT)
    Resolved,
    That provision may be made as to the operation of section 5 of the Capital Gains Tax Act 1979 for the year 1990–91.

    31. DEBTS AND GUARANTEES
    Resolved,
    That provision may be made about debts and guarantees.

    32. CAPITAL ALLOWANCES
    Resolved,
    That provision may be made about capital allowances.

    33. ERRORS IN THE INCOME AND CORPORATION TAXES ACT 1988
    Resolved,
    That provision (including provision having retrospective effect) may be made correcting errors in the Income and Corporation Taxes Act 1988.

    34. LOCAL AUTHORITIES
    Resolved,
    That provision may be made about the meaning of "local authority".

    35. RELIEF FROM TAX (INCIDENTAL AND CONSEQUENTIAL CHARGES)
    Resolved,
    That it is expedient to authorise any incidental or consequential charges to any duty or tax (including charges having retrospective effect) which may arise from provisions designed in general to afford relief from taxation.

    PROCEDURE RESOLUTIONS

      PROCEDURE (INFORMATION FOR TAX AUTHORITIES OF MEMBER STATES)
      Resolved,
      That, notwithstanding anything to the contrary in the practice of the House relating to the matters which may be included in Finance Bills, any Finance Bill of the present Session may make provision for giving effect to the Directive of the Council of the European Communities dated 19th December 1977 No. 77/799/EEC and any Directive of the Council which extends that Directive to other taxes.

      PROCEDURE (LOANS BY PUBLIC WORKS LOAN COMMISSIONER)
      Resolved,
      That, notwithstanding anything to the contrary in the practice of the House relating to the matters which may be included in Finance Bills, any Finance Bill of the present Session may contain provision with respect to the limit by section 4 of the National Loans Act 1968 in relation to loans made by the Public Works Loan Commissioners in pursuance of section 3 of that Act.

      PROCEDURE (FUTURE TAXATION)
      Resolved,
      That, notwithstanding anything to the contrary in the practice of the House relating to the matters which may be included in Finance Bills, any Finance Bill of the present Session may contain the following provisions taking effect in a future year—
      152

      (a) provision amending the Taxes Management Act 1970;

      (b) provisions amending sections 7, 10, 11, 79, 393 and 396 of the Income and Corporation Taxes Act 1988;

      (c) provisions about group relief;

      (d) provisions amending the Capital Allowances Act 1990; and

      (e) provisions about interest on repayments of petroleum revenue tax.

    FINANCE BILL [Money]
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act resulting from the Finance Bill, it is expedient to authorise—

    (a) the payment out of money provided by Parliament of sums payable by virtue of any provision of that Act enabling provision to be made about repayment of sums paid by way of fees and charges, and

    (b) any increase in the sums payable out of or into the National Loans Fund which is attributable to any provision of that Act increasing to £55,000 million, with power to increase by order to £70,000 million, the limit imposed by section 4 of the National Loans Act 1968 in relation to loans made by the Public Works Loan Commissioners in pursuance of section 3.

    Ordered,
    That a Bill be brought in upon the foregoing resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Secretary Waddington, Mr. Secretary Ridley, Mr. Secretary Parkinson, Mr. Secretary Wakeham, Mr. Secretary Newton, Mr. Secretary Patten, Mr. Norman Lamont, Mr. Secretary Howard, Mr. Peter Lilley and Mr. Richard Ryder do prepare and bring it in.

    FINANCE BILL [Money]
      FINANCE BILL
      Mr. Peter Lilley accordingly presented a Bill to grant certain duties, to alter other duties, to amend the law relating to the national debt and the public revenue, and to make further provision in connection with finance: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 109.]

    Community Charge
    10.30 pm
    Mr. Bryan Gould: I beg to move,
    That the Personal Community Charge (Relief) (England) Regulations 1990 (S.I., 1990, No. 2) dated 2nd January 1990, a copy of which was laid before this House on 5th January, be revoked.
    Mr. Speaker: With this, it will be convenient to consider the following two motions:
    That an humble Address be presented to Her Majesty, praying that the Personal Community Charge (Relief) (England) (Amendment) Regulations 1990 (S.I., 1990, No. 402), dated 2nd March 1990, a copy of which was laid before this House on 5th March, be annulled.
    That an humble Address be presented to Her Majesty, praying that the Personal Community Charge (Relief) (Wales) Regulations 1990 (S.I., 1990, No. 288) dated 16th February 1990, a copy of which was laid before this House on 19th February, be annulled.
    Mr. Gould: At times, it is hard not to feel sorry for the Secretary of State and his Ministers as they wrestle with their poll tax inheritance, but sympathy for them must be strictly limited when we consider the plight of those millions of people who deserve it much more—[Interruption.]
    Mr. Speaker: Order. Would hon. Members who are not remaining for the debate please leave quietly, particularly those beyond the Bar?
    Mr. Gould: Our sympathy for the Secretary of State, who I am sorry does not appear to be present, must be strictly limited when we consider the plight of millions of people who will pay the price for his convolutions and incompetence and for the iniquitous scheme that he and the Government are imposing on them. I am delighted to see that the Secretary of State is now present, although I am sorry that he will not be opening the debate for the Government.
    The saga of the poll tax has been increasingly marked by a desperate search for expedients and bolt holes and by increasingly implausible resort to inventions and fictions to try to mask and to conceal what has been done. We are dealing tonight with a prime example of that.
    Viewed in retrospect, perhaps one of the most poignant moments in the development of the poll tax was in October, at the Tory party conference, when the Minister for Local Government and Inner Cities announced the introduction of the transitional relief scheme, under which, he assured Tory Members and councillors, no one would pay more than £3 above their rates bill. As alarm and anxiety had been expressed by Tory Members and councillors, they were mightily relieved by that assurance. They allowed themselves—they deserve no criticism for this—to be lulled into a false sense of security. Their fears were allayed; they were bought off by that assurance.
    The Minister for Local Government and Inner Cities (Mr. David Hunt): It would be helpful if the hon. Gentleman would quote the exact words that I used and the exact words used by my noble Friend Lord Hesketh on the same day, when he made it clear that the pledge about people paying no more than £3 above their rates would apply only if the council concerned spent in accordance with Government spending guidelines.
    Mr. Gould: I shall come to the point raised by the Minister. If he is already conceding that the promise which he appeared to give was vitiated by the false assumption which he made, that is exactly the point that Opposition Members, and many Conservative Members, will wish to press.
    Mr. Jeff Rooker: I wish to kill this point straight way. Two weeks ago on our television screens we all saw the briefed and educated Tory candidate for Mid-Staffordshire tell people that their poll tax would not be more than £3 a week more than their rates. He gave that impression because that was the impression that everyone else was supposed to get.
    Mr. Gould: It is for the Minister for Local Government and Inner Cities to explain himself to the House when he addresses us.
    Like so much else in the poll tax saga, and so many of the measures designed to smooth off the rough edges, the relief scheme has turned out to be a massive and fraudulent disappointment. The scheme excludes many of those who might otherwise have been expected to benefit, arid offers only an illusion of help to many others. Even for those who, in principle, fall within it, many will pay much more than £3 per week extra, but will not qualify, and many others will qualify for transitional relief but will end up paying more than the £3 per week extra.
    We are entitled to ask how a Government promise, so solemnly made to their own supporters, was so comprehensively broken so soon. The answer lies first in the scheme's structure. Many people are, by the scheme's rules, excluded from it. Like the transitional relief scheme for the uniform business rate, many people whose circumstances change after the scheme's introduction will lose its benefit.
    That is true for those who turn 18 after 1 April 1990. It is true of those who cease to be exempt, for whatever reason—for example, those who hitherto have been mentally ill, but then recover and rejoin the community after 1 April 1990. They will not be entitled to the scheme's benefits. Those who move house and change their address, even within the same local authority district, after 1 April 1990—of whom there will be many in the ensuing three years—will not qualify. Those who fail to qualify in the first year will be disqualified in successive years, even if their poll tax bill goes us sharply in those successive years.
    Mr. A. J. Beith: Is the hon. Gentleman aware that, on the advice of the Department of the Environment to local authorities, one group of people wholly excluded from transitional relief will be pensioners living in sheltered housing schemes, such as those provided by Anchor Housing? As their rates were paid by the housing association, and by them to the housing association, they will not be classed as ratepayers and the Department is advising local authorities not to pay relief.
    Mr. Gould: What the hon. Gentleman said about that case is more generally true, but for slightly different reasons, for many of those living in buildings in multiple occupation.
    The scheme's structure also makes it unlikely that two further and large classes of people will benefit to any great degree. Single poll tax payers living by themselves are virtually certain not to qualify, because to do so they would have had to have a rates bill in the current financial

    155
    year £156 lower than the assumed poll tax bill they will shortly receive. That is a virtually impossible requirement in most local authority districts. It would require a ridiculously low rates bill for the current year.
    For example, in Pendle, it would require a rates bill of £16 or less, in York, one of just £30 or less, in Hyndburn, just £25 or less. Another way of putting the same rather implausible point is that, in Leominster, the notional poll tax would have to rise by 1,770 per cent. above the rates bill before anyone would qualify for transitional relief.
    For different reasons—I refer here to a point related to that made by the hon. Member for Berwick-upon-Tweed (Mr. Beith) a moment ago—poll tax payers in large families or in buildings in multiple occupation are unlikely to gain much, if any, benefit from the scheme because the scheme is calculated on the basis of a notional poll tax paid by two members of a household only. However, the relief that they may or may not be entitled to is divided among the number of householders, and that may be three, four, five, six or more.
    For all those reasons, the scheme is not what it seems. Like the uniform business rate transitional relief scheme, and perhaps even more like the relief offered to those claiming rebates but hitherto disqualified because of the savings limit, the measures taken by the Government have promised much more than they have delivered.
    However, we have not yet considered the main reason why so many expectations have been disappointed. The reason why the scheme so signally fails in its stated purpose is that it is based on a fairy tale. It is vitiated by the same deliberate error that underlay the Government's ill-fated attempt to pursuade local government and the British people that somehow or other their poll tax bills were going to average just £278. Transitional relief is based on the amount by which rates bills plus £156 fall short of what is quaintly called an "assumed" poll tax. That is not the actual poll tax bill that will fall through letter boxes in a week or so's time; it is an assumed poll tax.
    What is the assumed poll tax? I received a letter this morning from the right hon. Member for Mole Valley (Mr. Baker), the chairman of the Tory party, in which he addressed that question. I do not know whether he meant to describe the assumed charge in exactly these terms, but he certainly gave the game away. He wrote that the assumed charge
    "is an assumption, not a prediction or guarantee."
    Many millions of people who might have hoped to qualify for transitional relief will now know that he spoke the truth—on that occasion, at any rate. The reality is that the assumed poll tax bears virtually no relationship to the size of the actual poll tax bill. We know why that assumption is wrong.
    Mr. Hunt: Perhaps I might assist the hon. Gentleman. Barking and Dagenham council is in his constituency. He just said that the assumed charge bears no relationship to the actual charge. In Barking and Dagenham the assumed charge is £278, and the actual charge is £280.
    Mr. Gould: I am delighted to congratulate my authority on its ability to meet the Government's prediction. However, that is not the case for the vast majority of local authorities, and the reason for that is understood by Conservative Members as well as by everyone else.
    156
    The Government underestimated, and assumed a level of local government spending £1·6 billion lower than the actual level for the current year. They then assumed that no new commitments would be undertaken by local authorities, including new commitments imposed on them by the Government, such as the costs of collecting the poll tax. They also assumed that 100 per cent. of the poll tax would be collected. Not one Conservative Member can tell me that that is the assumption on which his or her district or borough treasurer is operating. The most ludicrous assumption of all is that inflation is running at 3·8 per cent. Again, I ask any hon. Member to tell me whether that is an accurate forecast or assumption.
    Mrs. Edwina Currie: Is the hon. Gentleman aware that, in the Suth Derbyshire district, which covers most of my constituency, the assumed charge offered by the Government is £301, which is a 13 per cent. increase over the average rates charged in the area in the previous year? The South Derbyshire district has increased its budget by 9·9 per cent. The reason why our local community charge is 45 per cent. above that figure is the free-spending idiots in Derbyshire county council.
    Mr. Gould: I had hoped for a moment, as the hon. Lady rose in her place, that she was about to draw my attention to a little local miracle in South Derbyshire—that she was going to tell me that, in her constituency and in her local authority district, somehow or another, exempt from the inflation rate that applies throughout the rest of the country, inflation was only 3·8 per cent. I noticed that she somehow forbore making that claim.
    Mr. Richard Tracey: Will the hon. Gentleman give way?
    Mr. Gould: Here is an hon. Member who is going to make such a claim.
    Mr. Tracey: May I bring the hon. Gentleman's attention back to Barking and Dagenham? The leader of the hon. Gentleman's council was quoted in the newspapers as saying that he had no complaints about the grant that he had received from the Government, and that his community charge was arrived at by good management, which had been going on for a number of years. Perhaps the hon. Gentleman would like to confirm or deny that quote. If he confirms it, will he tell us why other Labour councils cannot achieve the same level of efficiency?
    Mr. Gould: Perhaps the hon. Gentleman could tell us why so few Tory council leaders have been able to make a similar claim. The reason is that, in their local authority districts, inflation is running at 7·5 per cent., which is twice the Government's assumption. That is why there is no relation between the assumed poll tax and the real poll tax. That is why, according to the Chartered Institute of Public Finance and Accountancy surveys, the average poll tax bill is 34 per cent. above the Government's projections. That is why Conservative local authorities throughout England and Wales have set their poll tax bills 31 per cent. higher than the Government said they would. That is why the average poll tax bill is £90 greater than the Government's assumed poll tax bill.
    It is on that £90 average that no relief whatsoever is available under the transitional relief scheme. Because that £90 average conceals gaps which, in some cases, are much

    157
    greater and which in theory could be unlimited, the Government have so signally failed to keep their promise. That is why so many people will now be required to pay more than the £3 a week extra that they were told was their maximum increase. That is why people are not protected in the way that the Government have promised. That is why the transitional relief scheme is so fatally flawed.
    The scheme has at its heart a myth that the Government hope to get away with, but that myth has now been fully exposed. As my right hon. Friend the Leader of the Opposition said last week, nothing can remedy the basic unfairness of the poll tax, but, when a Government make promises—not least to their own supporters—we, and I hope they, are entitled to see that those promises are kept.
    If Conservative Members are serious, if they are honestly trying to mitigate the worst effects of the poll tax, and if they want to be able to say to their constituents that they have done their best by them, they should not accept the shamefully broken promise. They can vote the regulations down. If we vote the regulations down, the consequence will be that the Government will have to take the regulations away and come back with a better scheme that would be a more accurate attempt to fulfil the promise that they have made.
    We want to see whether Conservative Members will join us in insisting that the Government keep their promises.
    Mr. Barry Porter rose—
    Mr. Gould: No, I shall not give way as I am about to conclude.
    If Conservative Members do not take that action, it is they, as well as their constituents, who will have been revealed as the victims of a cruel poll tax hoax.
    10.49 pm
    The Minister for Local Government and Inner Cities (Mr. David Hunt): The hon. Member for Dagenham (Mr. Gould) made an unworthy speech. If he had wanted credibility in the House, he should not only have quoted the promise that he alleged that I made, in the terms incorrectly advanced by him; he should also have quoted and referred to Hansard for the other place, because the details of the scheme were carefully set out by my noble Friend Lord Hesketh on 11 October 1989.
    Mr. John Battle: Will the Minister confirm that he mentioned the figure of £3?
    Mr. Hunt: Yes.
    When my right hon. Friend the Secretary of State for the Environment and I took over the responsibility of local government in the Department of the Environment eight months ago, we found that there was no scheme to protect ratepayers from the consequences of the change to a new system. We felt that circumstances suggested that such a scheme should be introduced. We also found that a safety net would last for four years and decided that we should give our right hon. and hon. Friends an indication that the period for contributions to the safety net would last for only one year. In the first year, half the gains would flow through, and in the second year the full gains would flow through.
    We decided that rather than abolish the first year of the contributions to the safety net, we would use the money to bring in a transitional relief scheme. At that time, we
    158
    quoted figures of just over £600 million for a transitional relief scheme that would last for three years. We chose our words extremely carefully, which is more than the hon. Member for Dagenham has just done. We said that we would introduce a transitional relief scheme that would protect ratepayers from the consequences of the changes in such a way that, provided the council spent in accordance with the assumptions made by the Government, ratepayers would not be more than £3 per week worse off.
    Mr. Gould: When the hon. Gentleman expressed himself in those terms, did he have any inkling that in almost every case the assumed poll tax figure would fall so far short of the real poll tax figure? If, as I expect, he had no such inkling, how did he expect those who were listening to him to realise that the promise that he was apparently giving them was conditional on an assumed figure turning out to be right?
    Mr. Hunt: If the hon. Gentleman refers to the statement made in the House of Lords on that day and to the speeches made subsequently, he will see that it was made absolutely clear at all stages that the assumed charge would be based—[Interruption.] No, let me answer the hon. Gentleman—that the assumed charge would be based on the precept levied by the council from the ratepayer, plus grants from the Government and the business rate, increased by 4·64 per cent. Those figures were published in full on 6 November. The hon. Member for Leeds, West (Mr. Battle) is nodding his head. Those figures were known on 6 November, and were published on 11 January—
    Mr. Battle: They were different.
    Mr. Hunt: Only in respect of the adjustments made as a result of the grant settlement consultation. If the hon. Gentleman looks at the differences, he will see that they were minimal.
    We also met the local authority associations, almost immediately after the announcement of the transitional relief scheme was made. We explained to them the basis on which the Government figures were to be assumed, and the fact that external finance for local authorities would be increased in the coming financial year over this financial year by 8·5 per cent. and that the total amount of standard spending assessment would be increased by 11 per cent. We said that, in those circumstances, we hoped that local authorities would reach community charges in accordance with the level of spending that increased by an amount within the rate of inflation. As it so happens, local authorities have decided to increase their spending by much more than the rate of inflation. Because the level of the community charge depends very much on the local spending decisions of each council, that has immediately increased the community charge.
    When I announced the scheme at the party conference, and my noble Friend Lord Hesketh announced it in the other place, we estimated that the total cost of it would be, in the first year, £300 million, that the total amount would be £600 million over three years, and that in the first year 6 million people would benefit. These are important figures which show that we have not gone back on any promise that we have made—the accusation that has been levelled.
    We have since revised the figures, and, based on the same commitment, we now find that it will cost not £300 million but £350 million in the coming year, that not just

    159
    6 million but 7·5 million people will benefit, and that the total cost of the scheme will not be £600 million but, over three years, £810 million.
    Mr. Andrew Rowe: Would it not have been a great help to my hon. Friend if more councils had copied the example of Rochester upon Medway, which has set a community charge of £248, which would have been even less if we had not had to make arrangements to bail out councils elsewhere by contributing to the safety net?
    Mr. Hunt: That is a helpful comment because it enables me to point out something on which the Labour party has sought to mislead the public—this is a serious accusation. This misleading statement has been picked up, quite incorrectly, by many in the media. It was made by the hon. Member for Sheffield, Brightside (Mr. Blunkett), who said that those in overspending council areas would lose their right to transitional relief. That is untrue. It is important to say this because that statement has been repeated several times by Opposition Members. Once the transitional relief figure has been fixed, in accordance with the assumed figures, not one penny or pound of it is lost, even if the recipient of that relief is in the area of an overspending Labour council.
    Mr. Gould: The point that my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) made was that there would be no relief for the gap between the assumed figure and the real figure. If the Minister will look at column 750 of Hansard for 6 November, he will see the record set out clearly. Unlike the wriggling to which the right hon. Gentleman treated us when he gave his assumptions about the level of poll tax charges, he purported to give us specific figures about the cost of the transitional relief scheme and the numbers who would benefit. Does he agree with paragraph 2 of the report from the working party on the community charge, from his own Department? It says that the figures that he has quoted and the figures on which he bases his argument are "indicative" rather than "precise forecasts".
    Mr. Hunt: It is an indicative forecast of how much the relief will cost in the first year and how many people will receive it. I have upgraded the figures from £300 million to £350 million and the receivers from 6 million to 7·5 million. I stand by those figures.
    Dr. Keith Hampson: I am sure that my hon. Friend will agree that there is much uncertainty and anxiety. Will he upgrade the assumed community charge, which in Leeds was £257, to the assumed target average of £278? That is one of the reasons for a sense of injustice. Will he consider extending the period of transitional relief so that the unwinding of it in conjunction with the unwinding of the safety net does not produce substantial losses in northern town after northern town?
    Mr. Hunt: The assumed level of spending is based on last year's spending plus 4·64 per cent. That applies throughout the country, and it does not bear a direct relationship to what my hon. Friend was talking about when he referred to the standard assessment. It is designed purely to cover the consequences to a ratepayer for a
    160
    change in the system and not to cover changes in the spending pattern of his local authority. That is key, and that was the basis on which the scheme was announced.
    I must take issue with the hon. Member for Dagenham. I cannot recall being accused—perhaps the hon. Gentleman has levelled this accusation at others—of misleading the House. Let there be no misunderstanding about this: what the Labour party has said about transitional relief is entirely untrue and has led to much uncertainty in the country. There are many who believe that they will not be entitled to transitional relief because of statements made by Opposition Members when they will be entitled to it.
    Mr. Tony Marlow: We are grateful to my hon. Friend for the relief that has been made available, but there are many hundreds of thousands, if not millions, of people who are faced with considerably higher bills than they had last year. Some of them are relatively low paid, yet they are faced with increases of up to £8 a week. Many pensioners are still concerned about the rate of attrition of their savings. Can my hon. Friend tell the House—many of his hon. Friends are deeply anxious—that the Government will be introducing further support and relief this year for those who are most hard pressed?
    Mr. Hunt: We are debating a transitional relief scheme which, despite the accusations of the Opposition, has not been changed one jot from the moment when we announced it, although its scope has increased. My hon. Friend has drawn attention to a serious circumstance in which local people are facing the consequences of their local councils deciding to increase their spending by substantially more than the rate of inflation. I can offer no immediate sustenance by means of the scheme to deal with that. The level of the community charge depends much on the spending decisions of a local authority. The scheme provides transitional relief at a cost of £350 million in the first year to 7·5 million people to cover the changes in the system. It is nothing to do with the change in the system that there have been spending decisions that would mean an increase in rates of 33 per cent. That is nothing to do with the change in the system. It has everything to do, however, with the way in which spending decisions have been made.
    Mr. Stuart Bell: I ask a question as a naive constituency Member without an understanding of the variety of figures which have been quoted. I have a letter from one of my constituents, Amanda Dawn Singleton, who has received a document which tells her that she will have to pay £42·90 a month on the introduction of the community charge. She receives £44 and a £10 training allowance per week. She writes:
    "I cannot afford to pay this amount. I am in a desperate situation, could you please please help me."
    I have her community charge bill with me. It states:
    "Less your Government transitional relief 0·00
    Less your Government rebate 0·00"
    What can I say to my constituent?
    Mr. Hunt: I always dislike trying to deal with complicated cases across the Floor of the House. I do not know the particular circumstances. If the hon. Gentleman wishes to put those facts to me, I shall consider them. Transitional relief is intended to benefit those who are currently ratepayers or members of ratepaying couples

    161
    and we have singled out pensioners and disabled people who do not fall into that category and given them special relief, which means that they will pay a community charge of £158 in the hon. Gentleman's area and £156 in Wirral.
    Mr. Keith Speed: Does my hon. Friend agree that the burden of the Opposition's case is that they endorse local government expenditure increases of 35 per cent. and expect the taxpayer to underwrite them?
    Dame Elaine Kellett-Bowman: Does my hon. Friend agree that it would be—
    Madam Deputy Speaker (Miss Betty Boothroyd): Order. I ask the Minister to respond to each intervention. We cannot have one on top of another—[Interruption.] I should like a little less noise from the Benches below the Gangway.
    Mr. Hunt: My hon. Friend the Member for Ashford (Mr. Speed) is absolutely right. The transitional relief scheme covers and protects ratepayers and members of ratepaying couples from changes in the system. My hon. Friend has clearly demonstrated that what is now arising is the result not of the change in the system but of spending decisions that would have meant a 33 per cent. increase in domestic rates.
    Dame Elaine Kellett-Bowman: Am I right in believing that in my hon. Friend's constituency ratepayers had a choice between the lower Conservative community charge and that suggested by the Liberals, which was higher? Would it not have been an enormous advantage to the citizens of Lancashire if they could have chosen between the additional £123 million of expenditure by the Labour party and the reduction of £60 million by the Conservative party?
    Mr. Hunt: I could not agree more with my hon. Friend. In Wirral the Conservatives proposed a community charge, and so did the Liberal-Democrats, but the Labour party refused to put forward a figure—
    Mr. Gould rose—
    Mr. Hunt: Wait a moment; let me answer my hon. Friend. The Labour party decided not to propose a charge, although it is believed that if it had it would have been about £450. Some 12,500 people voted in the telephone poll—64 per cent. opted for the Conservative suggestion.
    Mr. Den Dover: I listened carefully to my hon. Friend's speech at Blackpool. It was my opinion—shared, I am sure, by the many thousands present—that each individual in a married couple would benefit to the tune of £3 a week. Many of my constituents now think that there has been an act of bad faith. They are now told that it is £3 a week maximum—assuming that the spending levels are adhered to—shared between two or more people. Can my hon. Friend assure us that that was never the intention? My constituents are very concerned about this matter.
    Mr. Hunt: I said clearly at the party conference that, with the proviso I made about spending by local authorities, the new scheme would ensure that in areas where local authorities spent sensibly no ratepayer or ratepaying couple would be more than £3 a week worse off when the community charge was introduced, whatever
    162
    their income. I can add that we shall now single out pensioners and the disabled for special treatment, whether or not they pay rates.
    "If the local authority decides to spend above Government guidelines, it is right that the full amount of the excess"
    —these are my exact words at the party conference—
    "should fall to be met by the local charge payer".
    Mr. Rooker: Does the Minister appreciate that, if that statement had been made where it could have been tested by questioning—for example, in the House—the misinformation and false promises would not have been planted in people's minds? It was reading that from the conference platform that caused the difficulty. I have one general question.
    Mr. Hunt: May I get this absolutely straight? The hon. Gentleman was not listening. I said that my comments at the party conference were repeated in the other place at almost exactly the same time by Lord Hesketh. It may well be that the hon. Gentleman has some criticisms of his hon. Friends in the other place, but on 11 October 1989, at column 344, Lord Hesketh—
    Madam Deputy Speaker: Order. I am sure that the Minister is a sufficiently practised parliamentarian to paraphrase that for me.
    Mr. Hunt: If the hon. Member for Birmingham, Perry Barr (Mr. Rooker) checks the facts, he will see that there was no misunderstanding whatever.
    Mrs. Currie: May I refer my hon. Friend to the Library research note No. 477 of 3 November 1989, almost immediately after we returned to the House, in which the details that he has set out on the transitional relief, which will go to 10,000 families in my constituency, are set out precisely? The only difference since then has been that the allowance for inflation has been raised. Does my hon. Friend agree that, if Labour Members did their homework in the Library, they would not have made the mistakes that they have made tonight—unless they are doing it deliberately?
    Mr. Hunt: The Labour party has done its homework, but it has chosen to ignore the facts.
    Mr. Gould rose—
    Mr. Hunt: Just one second. That has caused much misunderstanding throughout the country. The circumstances of this scheme have not changed one little bit, except in one respect: whereas before we thought that the total scheme over three years would cost £600 million, it now will cost £810 million.
    Mr. Gould: I am grateful to the Minister for at last giving way. [Interruption.] Before his hon. Friends attempted to rescue him, he was making an interesting point about the special relief, as he termed it, which would be available to elderly and disabled people. He will know that in the regulations relief takes the form of a limit to what they must pay of £156 plus Z, Z equalling the difference between the assumed poll tax and the real poll tax. He will accept that Z on average throughout England and Wales amounts to £90. That means that the average bill for an elderly and disabled person will be £246 a year. As we are talking about elderly and disabled people who

    163
    hitherto have paid nothing whatever, how can he describe an obligation to pay £246 as special help and transitional relief?
    Mr. Hunt: It is special help under the transitional relief scheme. The individuals have full entitlement to rebate, if they fall within the guidelines.
    Mr. Barry Porter: The hon. Member for Birmingham, Perry Barr (Mr. Rooker) talked about mist. There is no mist surrounding the rebates available to pensioners and the disabled in the Wirral. I am glad that my hon. Friend gave us the figures for those groups. The mist is when Labour Members talk of honesty, seriousness, promises and a better scheme. That is more than a mist; it is a complete fog. I have heard nothing. Perhaps my hon. Friend can enlighten me.
    Mr. Hunt: My hon. Friend is right to emphasise yet again that transitional relief is just a part of the picture. The scheme has not changed one little bit since we announced it last October. It is in no way related to people's means. It would have been impossible for us to give a blank cheque and to say that we would cover the difference between this year's rates bill and next year's community charge whatever the level. I do not think that anyone in his right mind could have expected that. So we announced the scheme, and we have fulfilled our pledge.
    My hon. Friend the Member for Wirral, South (Mr. Porter) is right to point out that there is also a rebate system, which is another part of the same picture. He is equally right to point out that in Wirral no pensioner or disabled person who is a ratepayer or a member of a ratepaying couple will be worse off by more than £156.
    Miss Emma Nicholson: I am convinced that my hon. Friend means the transitional relief to effect exactly what he has said it will effect. Will he, most kindly, assure me that he will continue to consider its operation very carefully, since neither he nor I can be comfortable when, in one of the lowest-spending boroughs in England—West Devon borough—not one single person will qualify for transitional relief, and very few couples —perhaps a few thousand—will qualify. That means that three quarters of the people in West Devon borough will pay more than £3 extra a week.
    Mr. Hunt: I would just say—[HON. MEMBERS: "Answer."] Give me a chance. I do not believe that there is no one in my hon. Friend's area who could claim transitional relief—[Interruption.]
    Madam Deputy Speaker: Order.
    Mr. Bell: On a point of order, Madam Deputy Speaker. Could you confirm that you heard, as we heard, the hon. Member for Derbyshire, South (Mrs. Currie) say earlier that 10,000 of her constituents—
    Madam Deputy Speaker: Order. That is not a point of order.
    Mr. Hunt: It may well be that my hon. Friend the Member for Torridge and Devon, West did not mean nobody in her area, but meant no single person in her area. That may well be the case. The whole purpose of this
    164
    scheme is to protect the ratepayer and the ratepaying couple from changes in the system. In the main, the system benefits single people.
    The hon. Member for Dagenham said a few moments ago that one of the defects of the system was that it did not give relief to single people, for instance, in a borough such as Wandsworth. That was a direct quote from the press release by his hon. Friend the Member for Brightside which said, "e.g. Wandsworth". The reason why single people do not benefit—except pensioners or disabled people who do not presently pay rates or are not part of a ratepaying couple—is that the majority of them are generally better off. In Wandsworth they will pay £148 and therefore they will pay only three—[Interruption.] Wandsworth gets the second lowest amount of Government help of any inner London borough. In Wandsworth the charge is £148. As the scheme protects people against a payment of £156, that is why single people in Wandsworth do not benefit.
    Mr. Dave Nellist: The Minister says that single people will be better off. Is he aware that in Coventry those under 25 who earn more than £70·85 a week do not qualify for any form of rebate and will have to use between a month and a month and a half of their wages just to pay the poll tax? According to yesterday's opinion poll in The Sunday Correspondent, 7·6 million people, including a third of all those under 34, will refuse next Monday to pay this Tory tax.
    Mr. Hunt: One of the sad features of what the hon. Gentleman has just said is that he appears to show no shame for having said it. He has the privilege of being a Member of Parliament. In using that privilege, he should be aware that people listen to Members of Parliament when they say something about whether they should obey the laws of the land. By urging people throughout the country not to pay, which is what he is doing, he is putting an increased burden on the remaining people in his constituency who will have to pay for the free ride that he is seeking and that he is urging others also to seek.
    Several Hon. Members rose—
    Mr. Hunt: It is about time that, instead of turning silently away from the hon. Gentleman and pretending that his words had not been spoken, the Opposition Front Bench—[Interruption.]
    Madam Deputy Speaker: Order.
    Mr. Hunt: It is about time that those individuals there—
    Mr. Brian Wilson: Will the Minister give way?
    Mr. Hunt: It is about time—
    Mr. Wilson rose—
    Madam Deputy Speaker: Order. I request the hon. Member for Cunninghame, North (Mr. Wilson) to resume his seat.
    Mr. Hunt: We on this side will never stop demanding that the Opposition Front Bench should condemn that sort of law breaking. It is about time that they spoke out. I commend the regulations to the House.
    11.23 pm
    Mr. Jeff Rooker: I intend to make only a few points, just to give the Minister a chance to calm down.
    Twice as many people will pay the poll tax as paid the rates. According to the Government, the same amount of money will be collected. People do not understand why so many people will qualify for relief. That has to be explained. It was never explained while the legislation was being considered. I remind the Minister that it was pushed through the House by a party which got only 42 per cent. of the votes at the last election and which used the guillotine. The legislation was never fully and properly discussed. We were unable therefore to consider every possible defect that was alluded to either in the other place or in this House. I suspect that many more defects have still to come to light.
    The Minister discovered a few months ago that transitional relief would be needed for all the losers. How can hundreds of millions of pounds be required when only the same amount of money is to be collected from twice as many people? Ministers must explain that, outside the House.
    Mr. Roger King: May I help the hon. Gentleman? As a Birmingham Member, he will know that Birmingham city council's approved budget for last year—1989–90—was £622 million. The budget for the coming year has risen to £744 million: that is why we are paying more. He will have observed, in his travels around the city, that Birmingham has not spent this year's budget. That is clear from the fact that it is repairing roads, and doing a number of other things that it should do in any case.
    Mr. Rooker: As the hon. Gentleman knows, next year's increase in new money and new spend for Birmingham is £17 million—2·38 per cent.—of which £13 million is going to education and social services. We make no apology for that. The Government have manipulated the figures so that the amount can be made to look like more than £100 million, but for the purposes of the people of Birmingham who will experience any improvement in services it is £17 million. I defend that, and will continue to do so; what I do not defend are the funny-money figures that the Government have foisted on Birmingham.
    I do not wish to detain the House: I want to hear Conservative Members make the explanations that they must make. However, I will give way to my hon. Friend the Member for Burnley (Mr. Pike).
    Mr. Peter L. Pike: Even when viewed in the most favourable light, do not the Government's proposals mean that a married couple must be more than £6 a week worse off before they can receive a penny of transitional help? To many people, that is a tremendous amount.
    Mr. Rooker: Precisely.
    The Minister has said that the Labour party is to blame for giving the country false information. The last time that I looked up the figures, the Government employed 800 press and information officers; to the best of my knowledge, the Labour party employs fewer than can be counted on the fingers of one hand. How can we have managed to put all that false information around the country? It does not make sense.
    Mr. Peter Hardy: My hon. Friend has mentioned false information. The Minister appeared to approve the assumption of the hon. Member for Derbyshire, South (Mrs. Currie) that 10,000 families in her constituency would receive poll tax relief. If that is the case—unless the circumstances are extremely unusual—the prediction of 7·5 million beneficiaries and a figure of £350 million is surely a gross underestimate.
    Mr. Rooker: We need to look at the figures to find out how many people, on average, will benefit in each constituency, but we shall not know for certain until the bills come through the letter boxes. The real row about the poll tax has not started yet. I know that Croydon, for example, has already sent out its bills—without any rebate details—but until all the bills arrive I do not think that the country will wake up. The Government may think that there is trouble now; let them wait until next month and the month after.
    11.28 pm
    Sir Rhodes Boyson: I know that many hon. Members wish to speak, so I shall be very brief.
    Conservative Members are grateful for the transitional payment arrangements. The Minister has made no attempt to misrepresent the facts; he has always been not only courteous but accurate, and any disagreement between him and me has nothing to do with misrepresentation. The transitional arrangements will be helpful, but they do not go far enough. That is the problem. I consider that four categories require help.
    First, it is wrong to take away the safety net in the second, third and fourth years and not the first year. In the first year, the built-in safety net will be at great cost to many careful Conservative boroughs where up to £70 per person is being transferred to what they consider to be spendthrift Labour boroughs. That will stick in the gullets of people there.
    The second category was also affected by last week's Budget—a husband has to pay his wife's poll tax if she is at home. At the same time as the Government have separated taxation between the husband and wife, they have brought it back in the poll tax. That will cause great resentment in the country. If a wife stays at home to look after her children, her husband will have to pay her poll tax although they are taxed separately.
    The third category is pensioners. If pensioners live in their own homes or with their relatives, they have to pay the poll tax, or their families have to pay it for them. If they live in residential homes, they do not have to pay the poll tax. That is another anti-family measure that was introduced, not without thought, but without considering the possible reactions to it, and some help should be provided.
    Mr. Beith: Will the right hon. Gentleman give way?
    Sir Rhodes Boyson: I shall not give way, as I know that other hon. Members wish to speak.
    My fourth and final point is that I quite understand why my hon. Friend the Minister said that, if an authority spends more than what the Government intend, the charge payers in that area will have to pick up the bill. But that is hard luck on Conservative voters in Conservative areas swamped within Labour boroughs. They have voted Conservative all their lives, as in Brent where 19 out of 21 councillors are Conservatives. We cannot get many more

    167
    than that. We have tried to get 23, but so far we have not achieved it. I have some sympathy with those Conservative voters in such areas, because they are doing all they can, yet they are penalised without any transitional help.
    I make only those four points, as I know that other hon. Members wish to speak.
    11.31 pm
    Mr. Ronnie Fearn: I shall be factual, but not too brief.
    I begin with a quotation:
    "If your actual community charge bill is more than the assumed community charge bill the relief will be calculated on the basis of the assumed charge."
    That is a quotation from the Department of the Environment press release of 7 March when it announced that 7·5 million people, rather than 6 million people, will get transitional relief.
    The press release highlights so well the Government's inability to estimate or forecast anything correctly. It is worrying that the entire poll tax system is based on estimates and assumptions. It is quite clear that the Government have got their assessments totally wrong and it is not surprising that the country is now in uproar.
    It was not long ago that the Government, desperate to sell the poll tax system to the electorate, were suggesting that no one would have to pay an increase of more than £3 a week. It is abundantly clear that that figure is no more than fiction, as are most of the other figures that we have heard tonight.
    The Government have hugely underestimated the cost of vital services. That is probably due to their ignorance of the needs of local people, the elderly, children in state schools and those less able than themselves to participate fully in our communities and to their ignorance of the recreation needs of children and adults in small and large communities.
    The Department of the Environment's statement in the press release that I quoted is without explanation or apology and does not spell out that more than 90 per cent. of local authorities are setting poll tax rates well above the assumed charge. That means that the 7·5 million who are entitled to relief will not get the full amount.
    This lack of clarity is reprehensible. It is clear that the Government hope to ride out the storm and that they hope that, once the system is up and running, people will get used to it and complain less. With other kinds of policies, that attitude may work, but I am afraid that it will not work with this one.
    People were misinformed about this tax, and they are still being misinformed. They believed that the Government had guaranteed that increases would be no more than £3 a week, but they are finding that they have to pay far more, without any means of relief, but also without fully understanding why. On top of that, many people did not realise that in households where there are more than two people the relief will be calculated on the basis of only two persons, and the amount of relief will be shared between all the poll tax payers in that household.
    Mr. David Hunt: I may not have dealt properly with that point when I responded to my hon. Friend the Member for Chorley (Mr. Dover), so I am grateful for this further opportunity.
    168
    Before making our announcement, we consulted the local authorities. They told us that if they were to come anywhere close to completion of the scheme in time—and at that time they thought that it might not be possible to complete all the administration, and so on—there would have to be an automatic allocation of relief for households with more than two people. We considered that view very carefully, and, in response to local authority pressure, we conceded the point and allowed the relief to be spread equally between all occupants. But that does not prevent the pensioner or the disabled person who has not been a ratepayer, or part of a ratepaying couple, from claiming his special relief in addition to the automatically allocated relief. I hope that that explains the position.
    Mr. Fearn: I am very grateful for the Minister's explanation. The point was not explained fully in the response to the hon. Member for Chorley (Mr. Dover).
    Mr. Beith: The Minister still has not explained why this relief is not available to pensioners living in sheltered housing, whose rates were paid through housing schemes. They are not allowed to qualify for the special relief, because they previously contributed to the rates through their payments to the housing association.
    Mr. Fearn: I thank my hon. Friend for his intervention. So far, the Minister has nodded twice to that question. No doubt he will have an answer later.
    I want to refer now to the problems of young people on low incomes. Often these people come from low-earning families. They are less likely to be able to move out of their homes or to do what their better-off neighbours do. The number of such people is increasing as Government policy impairs moves by young persons to become independent by finding their own homes. These people are to be penalised even further. They are not being treated as deserving of full participation in the transitional relief scheme. They are, however, seen as being deserving when it comes to paying the poll tax. They are not entitled to a rebate—they will pay in full. A young person earning less than £3,750 per year will have to pay as much as 11 or 12 per cent. of net income.
    As I said earlier, the whole poll tax system is based on assessment and assumption, which is bound to create anomalies. But of even more concern to local authorities is that, for many counties, the notional expenditure level to be used in the calculation of transitional relief is significantly below the standard spending assessment. The Association of County Councils requests that, for the purposes of calculating transitional relief, the 1990–91 community charge calculation be based on the higher of the notional spending level and the standard spending assessment.
    It would be even better if the Government were to take this opportunity to increase their benchmark figure of £278 for standard spending, which was calculated and set many months ago—before there was any concrete evidence of the real spending levels of local councils for 1990. I note that the Government have promised £21 million to cover the cost of administration. I believe that, so long as the full amount is distributed in such a way that the councils get the benefit and that part of it is not clawed back into the Treasury, local authorities will consider the amount to be reasonable. But I wonder whether the Minister has any idea of the sheer weight and physical effort that will go into the administration of the poll tax scheme. The massive

    169
    volume of paperwork, claims and rebates will lead to long delays, and that will result in hardship for many of those least able to manage.
    Already, 40,000 people have applied to Sefton council's finance department for rebate forms, 10,000 have applied to the social services department, 20,000 to the housing department and a further 5,000 to the Department of Social Security. So far, a total of 75,000 applications have been made. Since Budget day and the doubling of the limit on savings, there has been a further deluge.
    Mr. Donald Thompson: Is that more or fewer applications than for housing benefit?
    Mr. Fearn: More.
    Sefton council received 3,500 Government-sponsored newspaper coupons, which proved to be almost useless because they made no distinction between rented and owner-occupied accommodation. Those coupons have been returned for people to explain the information that they put on them. That is a further example of ratepayers' money being wasted. I find it hard to comprehend, given those figures for a not unusual local area, that the Government could possibly have accounted for all administration costs. I am certain that they have not considered the hardships of many people, who will suffer from the inevitable delay in the production of forms.
    The poll tax is unfair, unworkable and expensive to run. The poll tax, not the statutory instruments that we are discussing, should be revoked.
    11.40 pm
    Mr. Robert G. Hughes: When the debate began, the hon. Member for Dagenham (Mr. Gould) sought to suggest that the transitional relief announced by my hon. Friend the Minister for Local Government and Inner Cities at the Conservative party conference was different from the scheme now before us. As he sought to explain his remarks, and after the reply from the Minister, it became abundantly clear that the comments of the hon. Member for Dagenham were in line with most comments that we have heard from Labour Members: they simply were not based on facts. Labour Members were trying once again to mislead the public that the scheme is other than what it is. It is disgraceful for them to pretend that people are being denied relief when it was never offered.
    Is it reasonable that the transitional relief scheme should be available for use by any Labour council that wants to set an excessive community charge, irrespective of the needs of the borough? I say that for a particular reason. Despite the humbug that we have heard from Labour Members, we have never heard, in this debate or in others on the rating system, any suggestion that transitional relief would be available for people who have suffered enormous rates increases at the hands of Labour councils. What about Labour councils that year after year caused misery to thousands of people by increasing rates in excess of inflation?
    Mrs. Maria Fyfe: Will the hon. Gentleman consider the case of a pensioner couple in my constituency who before the poll tax paid £84·20 in rent and rates but this year will have to pay £91·24? Does he agree that that is £7·04 more a month, not £3? Does he expect his constituents to be equally worse off, or will this be another example of people in England being better off?
    Mr. Hughes: I shall be happy to consider that matter provided that the hon. Lady will consider all those people in the London borough of Ealing who, last year, had rate increases of more than 50 per cent., all those older people who were denied money for food and heating because they had to pay excessive bills to a Labour council. It is that sort of point, coming from Labour Members, which does the Labour party no credit because Labour Members shed crocodile tears when it is they who take money from people's pockets to pay for excessive spending. I give way to my hon. Friend the Member for Ealing, North (Mr. Greenway), who can explain some of those matters.
    Mr. Harry Greenway: I can explain the suffering of some of my constituents. The constituents of the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) do not know they are born. If they lived in Ealing they would suffer. In Ealing, we have had a rate—a local tax—increase of 264 per cent. in four years, when inflation was only about 20 per cent. What about that for Labour wickedness?
    Mr. Hughes: My hon. Friend's intervention points up my case.
    Mr. Nellist rose—
    Mr. Hughes: I shall not give way to scabs who make other people pay for their community charge.
    Madam Deputy Speaker (Miss Betty Boothroyd): I am sure that the hon. Gentleman will want to withdraw that remark.
    Mr. Hughes: If you, Madam Deputy Speaker, advise me that the remark is unparliamentary, of course, I withdraw it, but it is no worse than anything that anyone who is going to be—
    Madam Deputy Speaker: Order. It is a most objectionable word, and I am grateful to the hon. Gentleman for his courtesy.
    Mr. Hughes: What the hon. Member for Coventry, South-East (Mr. Nellist) is doing to those people who will have to pay for the services that he enjoys on his high salary simply defies description. What makes it worse is that anyone who follows his lead and does not pay the community charge will be dragged through the courts. He can sit behind his privilege as a Member of Parliament and not be dragged through the courts; he is making people do things that he will not have to do.
    Mr. Nellist rose—
    Mr. Hughes: I have already told the hon. Member that I will not give way to him.
    The transitional scheme is generous and will come to the aid of those people who have to pay more money as a direct result of the new scheme of local taxation. That is what it is designed to do and what the Government promised it would do. If the Labour party wants to talk about councils which charge a high community charge, it must come up with the explanation of why people have to pay more money. It is no good the Labour party criticising, when it refuses not only to come up with a scheme of its own, but to come up with the answers to any of the questions posed by Conservative Members. Labour

    171
    Members may want to act like deaf mutes, but in the end they will not get away with that, because the electorate will rumble them.
    11.47 pm
    Mr. Barry Jones: The Council of Welsh Districts proposed transitional relief as a less administratively complicated system than that for England. However, since the Welsh Office revealed the final details, the Council of Welsh Districts, the architect of the transitional relief scheme, has expressed deep concern that the Welsh Office has not gone far enough, either in the period of relief—three years, not five—or in the extent of the relief.
    Many Welsh communities will not receive transitional relief—541, nearly seven out of 10, will not. Only 323 will receive transitional relief. There are anomalies in the system. Due to the way that community boundaries are drawn, people living on opposite sides of the road, using the same services, may receive different levels of relief. For example, residents in part of Trehafod in the Rhondda will receive £41 relief, but their neighbours whose homes are in Taff-Ely will receive no help. Similarly in north Wales, residents in Llanfynydd in Alyn and Deeside will receive no transitional relief while their neighbours in Brymbo in Wrexham Maelor will receive £8 relief.
    With regard to anomalies, the professionals in local government finance in Wales believe that the Government are less than competent in deciding what area should have relief. The anomalies set area against area and it is clear that the Government have not done their homework. The arbitrary use of areas means that thousands of people are losing.
    The average community charge in Wales will be £232, which is almost £60—or one third—more than the Government's figure of £173. A comparison between the average rates bill for the current year for adults and the community charge starting next month shows that poll tax payers in Blaenau Gwent, in Cynon Valley and in Rhondda will pay more than £100 more per person once transitional relief ends.
    No council in Wales—be it Labour, Conservative or independent—has levied a poll tax at the Welsh Office figure. The introduction of transitional relief smacks of panic by a Government who have recognised the enormity of the opposition to the poll tax among ordinary people and the size of electoral disaster that threatens to engulf them. The Government have dug themselves such an immense hole that they need more than transitional relief stepladders to get out of it.
    If Welsh authorities are charge-capped, who will do the capping? Will that be the last act of the present Secretary of State for Wales or the first act of the present Minister for Local Government and Inner Cities? That question should be answered. Should there be charge capping, the Secretary of State should make a statement in the House. We are tired of statements of importance to Wales being made outside this place. We are tired of Government by press release.
    The poll tax is unpopular in Wales. We believe that it will create more debt in the Principality. We fear that it will divide families and that young people may leave home because of the tension and debt that it will create within
    172
    homes. We regret that people looked after by carers or relatives must pay the poll tax, while those in institutional care will not. We also believe that the Government have greatly underestimated the administrative costs of this iniquitous tax. No council treasurer in Wales believes that there will be 100 per cent. collection of the poll tax.
    We in Wales believe that the poll tax is unjust. It is not related in any way to ability to pay. Nobody would deny that Wales is a mature political democracy. However this despised tax is dubbed and however it is tarted up, the Welsh people will continue to believe that the poll tax is unjust and entirely unacceptable. When the poll tax demands go through letter boxes in Wales next week, the shame will be that the poorest of our people will be hit the worst. That is why the Opposition oppose what the Government propose.
    11.55 pm
    The Parliamentary Under-Secretary of State for Wales (Mr. Ian Grist): It is extraordinary that the hon. Member for Alyn and Deeside (Mr. Jones) accords such importance to this subject that, at the last sitting of the Welsh Grand Committee, instead of debating this subject, we debated the effect on Wales of the Channel tunnel. That demonstrates the hon. Gentleman's depth of feeling.
    I assure my right hon. and hon. Friends that we have the operation of the community charge very much in mind and we are aware of their concerns about it. We listen to what is said, and that is why we have the regulations and why they are in the shape they are. The Government will go on listening and taking note of what happens on the ground, and we will act accordingly. We could, of course, do absolutely no less. I certainly make that promise to my right hon. Friend the Member for Brent, North (Sir R. Boyson).
    Mr. Dafydd Wigley: Will the Minister give way?
    Mr. Grist: I shall not give way.
    The regulations are designed to ease the passage from one system to another—they are not permanent crutches. Indeed, the three years over which they are to operate give local authorities, if they have any concern for their poorer citizens, time to moderate their expenditure ambitions and thus to keep their community charge at a reasonable and moderate level. Certainly, as we have seen north of the border, after the initial disgraceful burst when the new system was set up last year, local authorities have begun to moderate this year as those who pay the charge come to understand the system a little better.
    What is clear is that many councillors, mainly supporters of the Opposition, enjoy spending other people's money. As my hon. Friend the Member for Harrow, West (Mr. Hughes) pointed out, their motto is "Spend, spend, spend." Of course we are still in the dark about just how Labour Members would raise the money that they are going to spend. Will it be from income tax, a roof tax, or from some sort of capital values? Will rates be revived? We never hear the answer. We always hear how to spend money, never how to raise it. It beggars belief that they should propose such expenditure; the effect on inflation and interest rates would be catastrophic.
    A major purpose of the community charge is that local councils will be answerable to local electors. Electors will quickly see in their bills the results of councils' inefficiency

    173
    or empire building. The effects of local authority overspending were outlined very clearly in the earlier speech by my right hon. Friend the Chancellor of the Exchequer.
    The regulations for Wales have been welcomed by Welsh local authorities and by the financial adviser to the Welsh counties, who said that they were extremely well targeted. They are clear, easily understood, and cheap to operate. [Interruption.] Hon. Members from England could not have been listening to the hon. Member for Alyn and Deeside. He accepted that the Welsh system is easily understood, and so it is. It has benefited about 750,000 people by between £1 and £93. It is based on communities, or parishes as they are called in England, and compensates all those who—
    Mr. Barry Jones: Will the Minister give way?
    Mr. Grist: No.
    It compensates all those who, on the basis of last year's rates, uprated by the retail prices index and allocated per head, find themselves paying £18 or more than the Welsh Office's target figures. Any payment above that figure is the result of the local authorities dunning their own citizens. As a result of the transitional scheme, 324 communities out of 860 in Wales will benefit and 35 out of 37 districts contain communities that will benefit from the relief.
    Already community charge bills incorporating this scheme have been sent out. Were the regulations to be defeated, all those authorities and communities involved would have to cancel their current bills and send out higher, and in some cases much higher, fresh bills—at heaven knows what expense—and to the dismay of beneficiaries and local authorities. That, of course, applies to England as well as Wales.
    In the Welsh context, it is noticeable that 14 district authorities and two counties have increased budgets by 10 per cent. or less from 1989–90. If they were able—
    It being one and a half hours after the commencement of proceedings on the motion, MADAM DEPUTY SPEAKER put the Question pursuant to Order [23 March]:
    The House divided: Ayes 233, Noes 305.

    Division No. 141]

    [12 midnight

    AYES

    Abbott, Ms Diane

    Bradley, Keith

    Adams, Allen (Paisley N)

    Bray, Dr Jeremy

    Allen, Graham

    Brown, Gordon (D'mline E)

    Alton, David

    Brown, Nicholas (Newcastle E)

    Anderson, Donald

    Brown, Ron (Edinburgh Leith)

    Archer, Rt Hon Peter

    Buckley, George J.

    Armstrong, Hilary

    Caborn, Richard

    Ashdown, Rt Hon Paddy

    Callaghan, Jim

    Ashley, Rt Hon Jack

    Campbell, Menzies (Fife NE)

    Ashton, Joe

    Campbell, Ron (Blyth Valley)

    Banks, Tony (Newham NW)

    Campbell-Savours, D. N.

    Barnes, Harry (Derbyshire NE)

    Carlile, Alex (Mont'g)

    Barnes, Mrs Rosie (Greenwich)

    Cartwright, John

    Barron, Kevin

    Clark, Dr David (S Shields)

    Battle, John

    clarke, Tom (Monklands W)

    Beckett, Margaret

    Clay, Bob

    Beith, A. J.

    Clelland, David

    Bell, Stuart

    Clwyd, Mrs Ann

    Benn, Rt Hon Tony

    Cohen, Harry

    Bennett, A. F. (D'nt'n & R'dish)

    Cook, Frank (Stockton N)

    Bermingham, Gerald

    Cook, Robin (Livingston)

    Bidwell, Sydney

    Corbett, Robin

    Blair, Tony

    Corbyn, Jeremy

    Boateng, Paul

    Cousins, Jim

    Boyes, Roland

    Cox, Tom

    174

    Crowther, Stan

    Lewis, Terry

    Cryer, Bob

    Litherland, Robert

    Cummings, John

    Livingstone, Ken

    Cunliffe, Lawrence

    Livsey, Richard

    Cunningham, Dr John

    Lloyd, Tony (Stretford)

    Dalyell, Tam

    Lofthouse, Geoffrey

    Darling, Alistair

    Loyden, Eddie

    Davies, Rt Hon Denzil (Llanelli)

    McAllion, John

    Davies, Ron (Caerphilly)

    McAvoy, Thomas

    Davis, Terry (B'ham Hodge H'l)

    McCartney, Ian

    Dewar, Donald

    Macdonald, Calum A.

    Dixon, Don

    McFall, John

    Dobson, Frank

    Mckay, Allen (Barnsley West)

    Doran, Frank

    McKelvey, William

    Duffy, A. E. P.

    Maclennan, Robert

    Dunnachie, Jimmy

    McNamara, Kevin

    Dunwoody, Hon Mrs Gwyneth

    McWilliam, John

    Eadie, Alexander

    Madden, Max

    Eastham, Ken

    Mahon, Mrs Alice

    Evans, John (St Helens N)

    Marek, Dr John

    Ewing, Harry (Falkirk E)

    Marshall, Jim (Leicester S)

    Ewing, Mrs Margaret (Moray)

    Martin, Michael J. (Springburn)

    Fatchett, Derek

    Martlew, Eric

    Faulds, Andrew

    Maxton, John

    Fearn, Ronald

    Maxwell-Hyslop, Robin

    Field, Barry (Isle of Wight)

    Meacher, Michael

    Field, Frank (Birkenhead)

    Meale, Alan

    Fields, Terry (L'pool B G'n)

    Michie, Bill (Sheffield Heeley)

    Fisher, Mark

    Michie, Mrs Ray (Arg'l & Bute)

    Flannery, Martin

    Moonie, Dr Lewis

    Flynn, Paul

    Morgan, Rhodri

    Foot, Rt Hon Michael

    Morley, Elliot

    Foster, Derek

    Morris, Rt Hon A. (W'shawe)

    Foulkes, George

    Morris, Rt Hon J. (Aberavon)

    Fraser, John

    Mowlam, Marjorie

    Fyfe, Maria

    Mullin, Chris

    Galloway, George

    Murphy, Paul

    Garrett, John (Norwich South)

    Nellist, Dave

    George, Bruce

    Oakes, Rt Hon Gordon

    Godman, Dr Norman A.

    O'Brien, William

    Gordon, Mildred

    O'Neill, Martin

    Gould, Bryan

    Orme, Rt Hon Stanley

    Graham, Thomas

    Owen, Rt Hon Dr David

    Grant, Bernie (Tottenham)

    Patchett, Terry

    Griffiths, Nigel (Edinburgh S)

    Pendry, Tom

    Griffiths, Win (Bridgend)

    Pike, Peter L.

    Grocott, Bruce

    Prescott, John

    Hardy, Peter

    Primarolo, Dawn

    Harman, Ms Harriet

    Quin, Ms Joyce

    Hattersley, Rt Hon Roy

    Radice, Giles

    Haynes, Frank

    Randall, Stuart

    Healey, Rt Hon Denis

    Redmond, Martin

    Henderson, Doug

    Rees, Rt Hon Merlyn

    Hinchliffe, David

    Richardson, Jo

    Hoey, Ms Kate (Vauxhall)

    Robertson, George

    Hogg, N. (C'nauld & Kilsyth)

    Robinson, Peter (Belfast E)

    Home Robertson, John

    Rogers, Allan

    Hood, Jimmy

    Rooker, Jeff

    Howarth, George (Knowsley N)

    Ross, Ernie (Dundee W)

    Howell, Rt Hon D. (S'heath)

    Rowlands, Ted

    Howells, Geraint

    Ruddock, Joan

    Howells, Dr. Kim (Pontypridd)

    Salmond, Alex

    Hoyle, Doug

    Sedgemore, Brian

    Hughes, John (Coventry NE)

    Sheerman, Barry

    Hughes, Robert (Aberdeen N)

    Sheldon, Rt Hon Robert

    Hughes, Roy (Newport E)

    Shore, Rt Hon Peter

    Hughes, Simon (Southwark)

    Short, Clare

    Illsley, Eric

    Skinner, Dennis

    Janner, Greville

    Smith, Andrew (Oxford E)

    Jones, Barry (Alyn & Deeside)

    Smith, C. (Isl'ton & F'bury)

    Jones, Ieuan (Ynys Môn)

    Smith, Rt Hon J. (Monk'ds E)

    Jones, Martyn (Clwyd S W)

    Smith, J. P. (Vale of Glam)

    Kaufman, Rt Hon Gerald

    Snape, Peter

    Kennedy, Charles

    Soley, Clive

    Kilfedder, James

    Spearing, Nigel

    Kinnock, Rt Hon Neil

    Stanley, Rt Hon Sir John

    Kirkwood, Archy

    Steel, Rt Hon Sir David

    Lamond, James

    Steinberg, Gerry

    Leadbitter, Ted

    Stott, Roger

    Leighton, Ron

    Strang, Gavin

    175

    Straw, Jack

    Williams, Rt Hon Alan

    Taylor, Mrs Ann (Dewsbury)

    Williams, Alan W. (Carm'then)

    Thompson, Jack (Wansbeck)

    Wilson, Brian

    Turner, Dennis

    Winnick, David

    Vaz, Keith

    Winterton, Nicholas

    Wall, Pat

    Wise, Mrs Audrey

    Wallace, James

    Worthington, Tony

    Walley, Joan

    Wray, Jimmy

    Wardell, Gareth (Gower)

    Young, David (Bolton SE)

    Wareing, Robert N.

    Watson, Mike (Glasgow, C)

    Tellers for the Ayes:

    Welsh, Andrew (Angus E)

    Mrs. Llin Golding and

    Welsh, Michael (Doncaster N)

    Mr. Ray Powell

    Wigley, Dafydd

    NOES

    Aitken, Jonathan

    Currie, Mrs Edwina

    Alexander, Richard

    Curry, David

    Alison, Rt Hon Michael

    Davies, Q. (Stamf'd & Spald'g)

    Allason, Rupert

    Davis, David (Boothferry)

    Amery, Rt Hon Julian

    Day, Stephen

    Amess, David

    Devlin, Tim

    Amos, Alan

    Dickens, Geoffrey

    Arbuthnot, James

    Dorrell, Stephen

    Arnold, Jacques (Gravesham)

    Douglas-Hamilton, Lord James

    Arnold, Tom (Hazel Grove)

    Dover, Den

    Ashby, David

    Dunn, Bob

    Aspinwall, Jack

    Durant, Tony

    Atkins, Robert

    Dykes, Hugh

    Atkinson, David

    Eggar, Tim

    Baker, Rt Hon K. (Mole Valley)

    Emery, Sir Peter

    Baker, Nicholas (Dorset N)

    Evans, David (Welwyn Hatf'd)

    Baldry, Tony

    Evennett, David

    Banks, Robert (Harrogate)

    Fairbairn, Sir Nicholas

    Batiste, Spencer

    Fallon, Michael

    Bellingham, Henry

    Farr, Sir John

    Bendall, Vivian

    Favell, Tony

    Bennett, Nicholas (Pembroke)

    Fenner, Dame Peggy

    Bevan, David Gilroy

    Finsberg, Sir Geoffrey

    Bonsor, Sir Nicholas

    Fishburn, John Dudley

    Boscawen, Hon Robert

    Fookes, Dame Janet

    Boswell, Tim

    Forman, Nigel

    Bottomley, Peter

    Forsyth, Michael (Stirling)

    Bottomley, Mrs Virginia

    Forth, Eric

    Bowden, A (Brighton K'pto'n)

    Fowler, Rt Hon Sir Norman

    Bowden, Gerald (Dulwich)

    Fox, Sir Marcus

    Bowis, John

    Franks, Cecil

    Braine, Rt Hon Sir Bernard

    Freeman, Roger

    Brandon-Bravo, Martin

    French, Douglas

    Brazier, Julian

    Fry, Peter

    Bright, Graham

    Gale, Roger

    Brooke, Rt Hon Peter

    Gardiner, George

    Brown, Michael (Brigg & Cl't's)

    Garel-Jones, Tristan

    Bruce, Ian (Dorset South)

    Glyn, Dr Sir Alan

    Budgen, Nicholas

    Goodson-Wickes, Dr Charles

    Burns, Simon

    Gorman, Mrs Teresa

    Burt, Alistair

    Gorst, John

    Butcher, John

    Gow, Ian

    Butler, Chris

    Grant, Sir Anthony (CambsSW)

    Butterfill, John

    Greenway, Harry (Ealing N)

    Carlisle, John, (Luton N)

    Greenway, John (Ryedale)

    Carlisle, Kenneth (Lincoln)

    Gregory, Conal

    Carrington, Matthew

    Griffiths, Peter (Portsmouth N)

    Carttiss, Michael

    Grist, Ian

    Cash, William

    Ground, Patrick

    Chalker, Rt Hon Mrs Lynda

    Grylls, Michael

    Channon, Rt Hon Paul

    Hague, William

    Chapman, Sydney

    Hamilton, Neil (Tatton)

    Chope, Christopher

    Hanley, Jeremy

    Clark, Hon Alan (Plym'th S'n)

    Hannam, John

    Clark, Dr Michael (Rochford)

    Hargreaves, A. (B'ham H'll Gr')

    Clark, Sir W. (Croydon S)

    Hargreaves, Ken (Hyndburn)

    Clarke, Rt Hon K. (Rushcliffe)

    Harris, David

    Colvin, Michael

    Haselhurst, Alan

    Conway, Derek

    Hawkins, Christopher

    Coombs, Anthony (Wyre F'rest)

    Hayes, Jerry

    Coombs, Simon (Swindon)

    Hayward, Robert

    Cope, Rt Hon John

    Heathcoat-Amory, David

    Couchman, James

    Hicks, Mrs Maureen (Wolv' NE)

    Cran, James

    Higgins, Rt Hon Terence L.

    176

    Hind, Kenneth

    Nicholson, David (Taunton)

    Hogg, Hon Douglas (Gr'th'm)

    Nicholson, Emma (Devon West)

    Holt, Richard

    Norris, Steve

    Hordern, Sir Peter

    Onslow, Rt Hon Cranley

    Howard, Rt Hon Michael

    Oppenheim, Phillip

    Howarth, Alan (Strat'd-on-A)

    Page, Richard

    Howarth, G. (Cannock & B'wd)

    Parkinson, Rt Hon Cecil

    Howe, Rt Hon Sir Geoffrey

    Patnick, Irvine

    Howell, Rt Hon David (G'dford)

    Patten, Rt Hon Chris (Bath)

    Hughes, Robert G. (Harrow W)

    Patten, Rt Hon John

    Hunt, David (Wirral W)

    Pattie, Rt Hon Sir Geoffrey

    Hunt, Sir John (Ravensbourne)

    Porter, Barry (Wirral S)

    Hunter, Andrew

    Porter, David (Waveney)

    Hurd, Rt Hon Douglas

    Portillo, Michael

    Irving, Sir Charles

    Powell, William (Corby)

    Jack, Michael

    Price, Sir David

    Jackson, Robert

    Raffan, Keith

    Janman, Tim

    Redwood, John

    Jessel, Toby

    Renton, Rt Hon Tim

    Johnson Smith, Sir Geoffrey

    Rhodes James, Robert

    Jones, Gwilym (Cardiff N)

    Riddick, Graham

    Jones, Robert B (Herts W)

    Ridley, Rt Hon Nicholas

    Jopling, Rt Hon Michael

    Ridsdale, Sir Julian

    Kellett-Bowman, Dame Elaine

    Rifkind, Rt Hon Malcolm

    Key, Robert

    Roberts, Wyn (Conwy)

    King, Roger (B'ham N'thfield)

    Roe, Mrs Marion

    Kirkhope, Timothy

    Rossi, Sir Hugh

    Knapman, Roger

    Rost, Peter

    Knight, Greg (Derby North)

    Rowe, Andrew

    Knight, Dame Jill (Edgbaston)

    Rumbold, Mrs Angela

    Knowles, Michael

    Ryder, Richard

    Lamont, Rt Hon Norman

    Sackville, Hon Tom

    Lang, Ian

    Sainsbury, Hon Tim

    Latham, Michael

    Sayeed, Jonathan

    Lawrence, Ivan

    Scott, Rt Hon Nicholas

    Leigh, Edward (Gainsbor'gh)

    Shaw, David (Dover)

    Lennox-Boyd, Hon Mark

    Shaw, Sir Giles (Pudsey)

    Lilley, Peter

    Shaw, Sir Michael (Scarb')

    Lloyd, Sir Ian (Havant)

    Shelton, Sir William

    Lloyd, Peter (Fareham)

    Shephard, Mrs G. (Norfolk SW)

    Lord, Michael

    Shepherd, Colin (Hereford)

    Luce, Rt Hon Richard

    Shersby, Michael

    Lyell, Rt Hon Sir Nicholas

    Sims, Roger

    Macfarlane, Sir Neil

    Skeet, Sir Trevor

    MacGregor, Rt Hon John

    Smith, Tim (Beaconsfield)

    MacKay, Andrew (E Berkshire)

    Soames, Hon Nicholas

    Maclean, David

    Speed, Keith

    McLoughlin, Patrick

    Spicer, Sir Jim (Dorset W)

    McNair-Wilson, Sir Michael

    Spicer, Michael (S Worcs)

    McNair-Wilson, Sir Patrick

    Stanbrook, Ivor

    Madel, David

    Stern, Michael

    Major, Rt Hon John

    Stevens, Lewis

    Malins, Humfrey

    Stewart, Allan (Eastwood)

    Mans, Keith

    Stewart, Andy (Sherwood)

    Maples, John

    Stewart, Rt Hon Ian (Herts N)

    Marland, Paul

    Stokes, Sir John

    Marlow, Tony

    Stradling Thomas, Sir John

    Marshall, John (Hendon S)

    Sumberg, David

    Marshall, Michael (Arundel)

    Summerson, Hugo

    Maude, Hon Francis

    Tapsell, Sir Peter

    Mawhinney, Dr Brian

    Taylor, Ian (Esher)

    Mayhew, Rt Hon Sir Patrick

    Taylor, John M (Solihull)

    Mellor, David

    Taylor, Teddy (S'end E)

    Miller, Sir Hal

    Tebbit, Rt Hon Norman

    Mills, Iain

    Thatcher, Rt Hon Margaret

    Mitchell, Andrew (Gedling)

    Thompson, D. (Calder Valley)

    Mitchell, Sir David

    Thompson, Patrick (Norwich N)

    Moate, Roger

    Thorne, Neil

    Montgomery, Sir Fergus

    Thurnham, Peter

    Moore, Rt Hon John

    Townend, John (Bridlington)

    Morris, M (N'hampton S)

    Townsend, Cyril D. (B'heath)

    Morrison, Rt Hon P (Chester)

    Tracey, Richard

    Moss, Malcolm

    Tredinnick, David

    Moynihan, Hon Colin

    Trippier, David

    Neale, Gerrard

    Trotter, Neville

    Needham, Richard

    Twinn, Dr Ian

    Nelson, Anthony

    Vaughan, Sir Gerard

    Neubert, Michael

    Viggers, Peter

    Newton, Rt Hon Tony

    Waddington, Rt Hon David

    Nicholls, Patrick

    Wakeham, Rt Hon John

    177

    Walden, George

    Winterton, Mrs Ann

    Waller, Gary

    Wolfson, Mark

    Ward, John

    Wood, Timothy

    Wardle, Charles (Bexhill)

    Woodcock, Dr. Mike

    Warren, Kenneth

    Yeo, Tim

    Watts, John

    Younger, Rt Hon George

    Wells, Bowen

    Wheeler, Sir John

    Tellers for the Noes:

    Whitney, Ray

    Mr. Alastair Goodlad and

    Widdecombe, Ann

    Mr. David Lightbown

    Wiggin, Jerry

    Question accordingly negatived.
    Motion made, and Question put forthwith,
    That an humble Address be presented to Her Majesty, praying that the Personal Community Charge (Relief) (Wales) Regulations 1990 (S.I., 1990, No. 288), dated 16th February 1990, a copy of which was laid before this House on 19th February, be annulled—[Mr. Barry Jones.]
    The House divided: Ayes 229, Noes 297.

    Division No. 142]

    [12.13 am

    AYES

    Abbott, Ms Diane

    Darling, Alistair

    Adams, Allen (Paisley N)

    Davies, Rt Hon Denzil (Llanelli)

    Allen, Graham

    Davies, Ron (Caerphilly)

    Alton, David

    Davis, Terry (B'ham Hodge H'l)

    Anderson, Donald

    Dewar, Donald

    Archer, Rt Hon Peter

    Dixon, Don

    Armstrong, Hilary

    Dobson, Frank

    Ashdown, Rt Hon Paddy

    Doran, Frank

    Ashley, Rt Hon Jack

    Duffy, A. E. P.

    Ashton, Joe

    Dunnachie, Jimmy

    Banks, Tony (Newham NW)

    Dunwoody, Hon Mrs Gwyneth

    Barnes, Harry (Derbyshire NE)

    Eadie, Alexander

    Barnes, Mrs Rosie (Greenwich)

    Eastham, Ken

    Barron, Kevin

    Evans, John (St Helens N)

    Battle, John

    Ewing, Harry (Falkirk E)

    Beckett, Margaret

    Ewing, Mrs Margaret (Moray)

    Beith, A. J.

    Fatchett, Derek

    Bell, Stuart

    Faulds, Andrew

    Benn, Rt Hon Tony

    Fearn, Ronald

    Bennett, A. F. (D'nt'n & R'dish)

    Field, Frank (Birkenhead)

    Bermingham, Gerald

    Fields, Terry (L'pool B G'n)

    Bidwell, Sydney

    Fisher, Mark

    Blair, Tony

    Flannery, Martin

    Boateng, Paul

    Flynn, Paul

    Boyes, Roland

    Foot, Rt Hon Michael

    Bradley, Keith

    Foster, Derek

    Bray, Dr Jeremy

    Foulkes, George

    Brown, Gordon (D'mline E)

    Fraser, John

    Brown, Nicholas (Newcastle E)

    Fyfe, Maria

    Brown, Ron (Edinburgh Leith)

    Galloway, George

    Buckley, George J.

    Garrett, John (Norwich South)

    Caborn, Richard

    George, Bruce

    Callaghan, Jim

    Godman, Dr Norman A.

    Campbell, Menzies (Fife NE)

    Gordon, Mildred

    Campbell, Ron (Blyth Valley)

    Gould, Bryan

    Campbell-Savours, D. N.

    Graham, Thomas

    Carlile, Alex (Mont'g)

    Grant, Bernie (Tottenham)

    Cartwright, John

    Griffiths, Nigel (Edinburgh S)

    Clark, Dr David (S Shields)

    Griffiths, Win (Bridgend)

    Clarke, Tom (Monklands W)

    Grocott, Bruce

    Clay, Bob

    Hardy, Peter

    Clelland, David

    Harman, Ms Harriet

    Clwyd, Mrs Ann

    Hattersley, Rt Hon Roy

    Cohen, Harry

    Haynes, Frank

    Cook, Frank (Stockton N)

    Healey, Rt Hon Denis

    Cook, Robin (Livingston)

    Henderson, Doug

    Corbett, Robin

    Hinchliffe, David

    Corbyn, Jeremy

    Hoey, Ms Kate (Vauxhall)

    Cousins, Jim

    Hogg, N. (C'nauld & Kilsyth)

    Cox, Tom

    Home Robertson, John

    Crowther, Stan

    Hood, Jimmy

    Cryer, Bob

    Howarth, George (Knowsley N)

    Cummings, John

    Howell, Rt Hon D. (S'heath)

    Cunliffe, Lawrence

    Howells, Geraint

    Cunningham, Dr John

    Howells, Dr Kim (Pontypridd)

    Dalyell, Tam

    Hoyle, Doug

    178

    Hughes, John (Coventry NE)

    Pendry, Tom

    Hughes, Robert (Aberdeen N)

    Pike, Peter L.

    Hughes, Roy (Newport E)

    Prescott, John

    Hughes, Simon (Southwark)

    Primarolo, Dawn

    Illsley, Eric

    Quin, Ms Joyce

    Janner, Greville

    Radice, Giles

    Jones, Barry (Alyn & Deeside)

    Randall, Stuart

    Jones, Ieuan (Ynys Môn)

    Redmond, Martin

    Jones, Martyn (Clwyd S W)

    Rees, Rt Hon Merlyn

    Kaufman, Rt Hon Gerald

    Richardson, Jo

    Kennedy, Charles

    Robertson, George

    Kilfedder, James

    Robinson, Peter (Belfast E)

    Kinnock, Rt Hon Neil

    Rogers, Allan

    Kirkwood, Archy

    Rooker, Jeff

    Lamond, James

    Ross, Ernie (Dundee W)

    Leadbitter, Ted

    Rowlands, Ted

    Leighton, Ron

    Ruddock, Joan

    Lewis, Terry

    Salmond, Alex

    Litherland, Robert

    Sedgemore, Brian

    Livingstone, Ken

    Sheerman, Barry

    Livsey, Richard

    Sheldon, Rt Hon Robert

    Lloyd, Tony (Stretford)

    Shore, Rt Hon Peter

    Lofthouse, Geoffrey

    Short, Clare

    Loyden, Eddie

    Skinner, Dennis

    McAllion, John

    Smith, Andrew (Oxford E)

    McAvoy, Thomas

    Smith, C. (Isl'ton & F'bury)

    McCartney, Ian

    Smith, Rt Hon J. (Monk'ds E)

    Macdonald, Calum A.

    Smith, J. P. (Vale of Glam)

    McFall, John

    Snape, Peter

    McKay, Allen (Barnsley West)

    Soley, Clive

    McKelvey, William

    Spearing, Nigel

    Maclennan, Robert

    Steel, Rt Hon Sir David

    McNamara, Kevin

    Steinberg, Gerry

    McWilliam, John

    Strang, Gavin

    Madden, Max

    Straw, Jack

    Mahon, Mrs Alice

    Taylor, Mrs Ann (Dewsbury)

    Marek, Dr John

    Thompson, Jack (Wansbeck)

    Marshall, Jim (Leicester S)

    Turner, Dennis

    Martin, Michael J. (Springburn)

    Vaz, Keith

    Martlew, Eric

    Wall, Pat

    Maxton, John

    Wallace, James

    Meacher, Michael

    Walley, Joan

    Meale, Alan

    Wardell, Gareth (Gower)

    Michie, Bill (Sheffield Heeley)

    Wareing, Robert N.

    Michie, Mrs Ray (Arg'l & Bute)

    Watson, Mike (Glasgow, C)

    Moonie, Dr Lewis

    Welsh, Andrew (Angus E)

    Morgan, Rhodri

    Welsh, Michael (Doncaster N)

    Morley, Elliot

    Wigley, Dafydd

    Morris, Rt Hon A. (W'shawe)

    Williams, Rt Hon Alan

    Morris, Rt Hon J. (Aberavon)

    Williams, Alan W. (Carm'then)

    Mowlam, Marjorie

    Wilson, Brian

    Mullin, Chris

    Winnick, David

    Murphy, Paul

    Wise, Mrs Audrey

    Nellist, Dave

    Worthington, Tony

    Oakes, Rt Hon Gordon

    Wray, Jimmy

    O'Brien, William

    Young, David (Bolton SE)

    O'Neill, Martin

    Orme, Rt Hon Stanley

    Tellers for the Ayes:

    Owen, Rt Hon Dr David

    Mrs. Win Golding and Mr. Ray Powell

    Patchett, Terry

    NOES

    Aitken, Jonathan

    Batiste, Spencer

    Alexander, Richard

    Bellingham, Henry

    Alison, Rt Hon Michael

    Bendall, Vivian

    Allason, Rupert

    Bennett, Nicholas (Pembroke)

    Amery, Rt Hon Julian

    Bevan, David Gilory

    Amess, David

    Bonsor, Sir Nicholas

    Amos, Alan

    Boscawen, Hon Robert

    Arbuthnot, James

    Boswell, Tim

    Arnold, Jacques (Gravesham)

    Bottomley, Peter

    Arnold, Tom (Hazel Grove)

    Bottomley, Mrs Virginia

    Ashby, David

    Bowden, A (Brighton K'pto'n)

    Aspinwall, Jack

    Bowden, Gerald (Dulwich)

    Atkins, Robert

    Bowis, John

    Atkinson, David

    Braine, Rt Hon Sir Bernard

    Baker, Rt Hon K. (Mole Valley)

    Brandon-Bravo, Martin

    Baker, Nicholas (Dorset N)

    Brazier, Julian

    Baldry, Tony

    Bright, Graham

    Banks, Robert (Harrogate)

    Brooke, Rt Hon Peter

    179

    Brown, Michael (Brigg & Cl't's)

    Hargreaves, A. (B'ham H'll Gr')

    Bruce, Ian (Dorset South)

    Hargreaves, Ken (Hyndburn)

    Budgen, Nicholas

    Harris, David

    Burns, Simon

    Haselhurst, Alan

    Burt, Alistair

    Hawkins, Christopher

    Butcher, John

    Hayes, Jerry

    Butler, Chris

    Hayward, Robert

    Butterfill, John

    Heathcoat-Amory, David

    Carlisle, John, (Luton N)

    Hicks, Mrs Maureen (Wolv' NE)

    Carlisle, Kenneth (Lincoln)

    Higgins, Rt Hon Terence L.

    Carrington, Matthew

    Hind, Kenneth

    Carttiss, Michael

    Hogg, Hon Douglas (Gr'th'm)

    Cash, William

    Holt, Richard

    Chalker, Rt Hon Mrs Lynda

    Hordern, Sir Peter

    Channon, Rt Hon Paul

    Howard, Rt Hon Michael

    Chapman, Sydney

    Howarth, Alan (Strat'd-on-A)

    Chope, Christopher

    Howarth, G. (Cannock & B'wd)

    Clark, Hon Alan (Plym'th S'n)

    Howe, Rt Hon Sir Geoffrey

    Clark, Dr Michael (Rochford)

    Howell, Rt Hon David (G'dford)

    Clark, Sir W. (Croydon S)

    Hughes, Robert G. (Harrow W)

    Clarke, Rt Hon K. (Rushcliffe)

    Hunt, David (Wirral W)

    Colvin, Michael

    Hunt, Sir John (Ravensbourne)

    Conway, Derek

    Hunter, Andrew

    Coombs, Anthony (Wyre F'rest)

    Hurd, Rt Hon Douglas

    Coombs, Simon (Swindon)

    Irving, Sir Charles

    Cope, Rt Hon John

    Jack, Michael

    Couchman, James

    Jackson, Robert

    Cran, James

    Janman, Tim

    Currie, Mrs Edwina

    Jessel, Toby

    Curry, David

    Johnson Smith, Sir Geoffrey

    Davies, Q. (Stamf'd & Spald'g)

    Jones, Gwilym (Cardiff N)

    Davis, David (Booth ferry)

    Jones, Robert B (Herts W)

    Day, Stephen

    Jopling, Rt Hon Michael

    Devlin, Tim

    Key, Robert

    Dickens, Geoffrey

    King, Roger (B'ham N'thfield)

    Dorrell, Stephen

    Kirkhope, Timothy

    Douglas-Hamilton, Lord James

    Knapman, Roger

    Dover, Den

    Knight, Greg (Derby North)

    Dunn, Bob

    Knight, Dame Jill (Edgbaston)

    Durant, Tony

    Knowles, Michael

    Eggar, Tim

    Lamont, Rt Hon Norman

    Emery, Sir Peter

    Lang, Ian

    Evans, David (Welwyn Hatf'd)

    Latham, Michael

    Evennett, David

    Lawrence, Ivan

    Fairbairn, Sir Nicholas

    Leigh, Edward (Gainsbor'gh)

    Fallon, Michael

    Lennox-Boyd, Hon Mark

    Favell, Tony

    Lilley, Peter

    Fenner, Dame Peggy

    Lloyd, Sir Ian (Havant)

    Finsberg, Sir Geoffrey

    Lloyd, Peter (Fareham)

    Fishburn, John Dudley

    Lord, Michael

    Fookes, Dame Janet

    Luce, Rt Hon Richard

    Forman, Nigel

    Lyell, Rt Hon Sir Nicholas

    Forsyth, Michael (Stirling)

    Macfarlane, Sir Neil

    Forth, Eric

    MacGregor, Rt Hon John

    Fowler, Rt Hon Sir Norman

    Mackay, Andrew (E Berkshire)

    Fox, Sir Marcus

    Maclean, David

    Franks, Cecil

    McLoughlin, Patrick

    Freeman, Roger

    McNair-Wilson, Sir Michael

    French, Douglas

    Madel, David

    Fry, Peter

    Major, Rt Hon John

    Gale, Roger

    Malins, Humfrey

    Gardiner, George

    Mans, Keith

    Garel-Jones, Tristan

    Maples, John

    Glyn, Dr Sir Alan

    Marland, Paul

    Goodson-Wickes, Dr Charles

    Marlow, Tony

    Gorman, Mrs Teresa

    Marshall, John (Hendon S)

    Gorst, John

    Marshall, Michael (Arundel)

    Gow, Ian

    Maude, Hon Francis

    Grant, Sir Anthony (CambsSW)

    Mawhinney, Dr Brian

    Greenway, Harry (Ealing N)

    Mayhew, Rt Hon Sir Patrick

    Greenway, John (Ryedale)

    Mellor, David

    Gregory, Conal

    Miller, Sir Hal

    Griffiths, Peter (Portsmouth N)

    Mills, Iain

    Grist, Ian

    Mitchell, Andrew (Gedling)

    Ground, Patrick

    Mitchell, Sir David

    Grylls, Michael

    Moate, Roger

    Hague, William

    Montgomery, Sir Fergus

    Hamilton, Neil (Tatton)

    Moore, Rt Hon John

    Hanley, Jeremy

    Morris, M (N'hampton S)

    Hannam, John

    Morrison, Rt Hon P (Chester)

    180

    Moss, Malcolm

    Spicer, Michael (S Worcs)

    Moynihan, Hon Colin

    Stanbrook, Ivor

    Neale, Gerrard

    Stern, Michael

    Needham, Richard

    Stevens, Lewis

    Nelson, Anthony

    Stewart, Allan (Eastwood)

    Neubert, Michael

    Stewart, Andy (Sherwood)

    Newton, Rt Hon Tony

    Stewart, Rt Hon Ian (Herts N)

    Nicholls, Patrick

    Stokes, Sir John

    Nicholson, David (Taunton)

    Stradling Thomas, Sir John

    Nicholson, Emma (Devon West)

    Sumberg, David

    Norris, Steve

    Summerson, Hugo

    Onslow, Rt Hon Cranley

    Tapsell, Sir Peter

    Oppenheim, Phillip

    Taylor, Ian (Esher)

    Page, Richard

    Taylor, John M (Solihull)

    Parkinson, Rt Hon Cecil

    Taylor, Teddy (S'end E)

    Patnick, Irvine

    Tebbit, Rt Hon Norman

    Patten, Rt Hon Chris (Bath)

    Thatcher, Rt Hon Margaret

    Patten, Rt Hon John

    Thompson, D. (Calder Valley)

    Pattie, Rt Hon Sir Geoffrey

    Thompson, Patrick (Norwich N)

    Porter, Barry (Wirral S)

    Thorne, Neil

    Porter, David (Waveney)

    Thurnham, Peter

    Portillo, Michael

    Townsend, Cyril D. (B'heath)

    Raffan, Keith

    Tracey, Richard

    Redwood, John

    Tredinnick, David

    Renton, Rt Hon Tim

    Trippier, David

    Rhodes James, Robert

    Trotter, Neville

    Riddick, Graham

    Twinn, Dr Ian

    Ridley, Rt Hon Nicholas

    Vaughan, Sir Gerard

    Ridsdale, Sir Julian

    Viggers, Peter

    Rifkind, Rt Hon Malcolm

    Waddington, Rt Hon David

    Roberts, Wyn (Conwy)

    Wakeham, Rt Hon John

    Roe, Mrs Marion

    Walden, George

    Rossi, Sir Hugh

    Waller, Gary

    Rowe, Andrew

    Ward, John

    Rumbold, Mrs Angela

    Wardle, Charles (Bexhill)

    Ryder, Richard

    Warren, Kenneth

    Sackville, Hon Tom

    Watts, John

    Sainsbury, Hon Tim

    Wells, Bowen

    Sayeed, Jonathan

    Wheeler, Sir John

    Scott, Rt Hon Nicholas

    Whitney, Ray

    Shaw, David (Dover)

    Widdecombe, Ann

    Shaw, Sir Giles (Pudsey)

    Wiggin, Jerry

    Shaw, Sir Michael (Scarb')

    Winterton, Mrs Ann

    Shelton, Sir William

    Wolfson, Mark

    Shephard, Mrs G. (Norfolk SW)

    Wood, Timothy

    Shepherd, Colin (Hereford)

    Woodcock, Dr. Mike

    Shersby, Michael

    Yeo, Tim

    Sims, Roger

    Younger, Rt Hon George

    Skeet, Sir Trevor

    Smith, Tim (Beaconsfield)

    Tellers for the Noes:

    Soames, Hon Nicholas

    Mr. Alastair Goodlad and

    Speed, Keith

    Mr. David Lightbown.

    Spicer, Sir Jim (Dorset W)

    Question accordingly negatived.

    STATUTORY INSTRUMENTS, &c.
    Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).
    STATUTORY INSTRUMENTS, &c.

      TERMS AND CONDITIONS OF EMPLOYMENT
      That the draft Redundancy Payments (Local Government) (Modification) (Amendment) Order 1990, which was laid before this House on 20th February, be approved.—[Mr. Duran.]
      Question agreed to.
      Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

      TOWN AND COUNTRY PLANNING
      That the Town and Country Planning (Compensation for Restrictions on Mineral Working) (Amendment) Regulations 1990, dated 22nd February 1990, a copy of which was laid before this House on 1st March, be approved. [Mr. Durant.]
      Question agreed to.

    EUROPEAN COMMUNITY DOCUMENTS
    Motion made, and Question put forthwith pursuant to Standing Order No. 102(5) (Standing Committees on European Community documents).
    EUROPEAN COMMUNITY DOCUMENTS

      ACCOUNTS OF INSURANCE UNDERTAKINGS
      That this House takes note of European Community Document No. 9903/89 relating to the accounts of insurance undertakings; and welcomes it as an important step towards the liberalisation of the European insurance market.—[Mr. Durant.]
      Question agreed to.

    LOCAL GOVERNMENT
    Ordered,
    That an humble Address be presented to Her Majesty, praying that the Personal Community Charge (Relief) (England) (Amendment) Regulations 1990 (S.I., 1990, No. 402), dated 2nd March 1990, a copy of which was laid before this House on 5th March, be annulled.—[Mr. Durant.]

    PETITIONS

      M25 (Disturbance Compensation)
      12.26 am
      Sir Geoffrey Pattie: I beg to present a petition:
      To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
      The Humble Petition of the residents of Ongar Road, Addlestone, sheweth
      That the Government consider the question of compensation awarded through a rate reduction arising from the disturbance caused by the M25. That this reduction should be continued with the introduction of the community charge.
      Wherefore your petitioners pray that your honourable House urge the Secretary of State for the Environment to recognise the disturbance from the M25 and continue to allow a rebate in the community charge as for the rates.
      And your Petitioners, as in duty bound, will ever pray.
      The petition is signed by George Elliott and other residents of Ongar road.
      To lie upon the Table.

    Human Embryos
    Mr. Thomas McAvoy: I should like to present a petition to the House from my constituents:
    To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
    The humble petition of the parishioners of St. Mark's Church, Fernhill, Rutherglen, sheweth that we affirm that the newly fertilised human embryo is a real, living human being.
    The petition welcomes the Warnock report's statement that the embryo of the human species should be afforded protection in law, opposes any practices which discriminate against the embryo, and prays that legislation be enacted which forbids human embryos being used as subjects for research or experiment (unless this is done solely for the benefit of the embryo concerned).
    And your petitioners, as in duty bound, will ever pray.
    I express my strong support for the petition.
    To lie upon the Table.

    Cammell Laird
    Motion made, and Question proposed, That this House do now adjourn.— [Mr. Lightbown]
    12.28 am
    Mr. Frank Field: The Defence Select Committee recently published a report on a large subsidy which was recently paid to Harland and Wolff. I am sure that the Minister will be reassured that I have no wish to debate that report in detail, nor do I expect him to reply to me in this debate. As a member of the Select Committee, I would think that that was the wrong procedure. However, I hope that the Minister will allow me to take the salient points from the Select Committee's report so as to build up the case that my hon. Friend, as I shall call him tonight, the Member for Wirral, South (Mr. Porter) wishes to support—the knock-on effect that this has had on Cammell Laird.
    According to the Select Committee's report, the story begins in the middle of 1983 when the Ministry decided to replace an old aviation training ship by converting a large merchant vessel. Harland and Wolff and Cammell Laird were asked to submit bids. Although the bids were substantially different, the Ministry did not investigate why they were so different. A contract was awarded to Harland and Wolff in March 1984 for £49 million.
    The reason for the haste in making that commitment was that the Government wished to spend that money before the end of the financial year. Neither I nor the hon. Member for Wirral, South complain about that. Cammell Laird once benefited from the need for money to be spent before the end of the financial year. One understands the accounting procedures.
    I do not intend to detain the House by listing the reasons why Harland and Wolff was unable to meet the contract for the set price of £49 million. They are set out in the report. The point is that Harland and Wolff was unable to fulfil the contract at that price and there was a dispute between the Ministry and the shipyard. The Ministry offered an additional £5 million, but Harland and Wolff asked for an additional £26 million.
    At some stage the Ministry of Defence decided that a rapid settlement was needed not because the end of the financial year was approaching but because the privatisation of Harland and Wolff was on the horizon and very much part of the agenda. I do not wish to probe the political sensitivities of that move. It is not important to the case that I intend to put forward.
    What is important is that a £49 million contract ended up as a £71·5 million contract. If Harland and Wolff were the only shipyard in the world, there would be no point in holding this debate, but apart from not being the only shipyard in the world it is not the only shipyard in this country. There is one on the Mersey, in my constituency.
    It is wrong for Government spokesmen to say that there was a happy ending to the story. Although it was a happy ending for Harland and Wolff, it was a less than happy ending for Cammell Laird, the other yard that made a bid for that work. Recently, 800 workers at that yard have been told to get on their bikes. That is very serious for them and for the shipyard as a whole.
    The Government's decision to place an order that they must have known was underpriced and then to bail out Harland and Wolff in that way has had an important knock-on effect on Cammell Laird which can easily be
    184
    explained. The Minister knows as well as every other hon. Member who is participating in the debate that a shipyard is governed by the normal rules of business—that fixed costs have to be spread over the order book. Therefore, every order gained is an order over which the fixed costs can be spread. More orders mean that present production will be at lower average costs, and they allow future work to be bid for at lower average costs.
    Since the Government did the deal to stitch up the privatisation package for Harland and Wolff, Cammell Laird has bid for two important orders for type 23 frigates, both of which it failed to secure. No one could say that those bids would have succeeded if the original tender had been successful; all that can be said is that they would have been more successful than they were, because the costs would have been lower. The result of that failure has been the breaking up of a successful work force.
    Let me end as I began, by representing the interests of a shipyard whose interests I am proud to represent. It is no ordinary shipyard, as the Minister knows—not only from the visit that he kindly made last year, but from its history. Not so many years ago, a small group of people decided that, with the right hon. Member for Chingford (Mr. Tebbit) as Secretary of State for Trade and Industry, the way in which to get orders out of the Government was to stage a sit-in. The decision was put to three mass meetings in the yard, and was decisively rejected. Another small group then decided that they could get the decision through if they held a ballot in one of the yard's many shops: they obtained a majority, and an official strike was called.
    I do not suggest that the yard immediately sprang to defeat that abuse of the democratic process; indeed, if all the workers had shown such apparent bravery, it could almost be said that they could not be described as brave. People are brave because it is difficult to do things, and it was difficult for the men and women in that yard to turn their backs on what they had thought to be proper, traditional trade union practice—such as the rule that picket lines should not be crossed in the event of an official strike—by holding a vote outside the picket line and returning to work. But they did that, and the yard survived.
    The Wirral Members have been at pains to put to the workers—men and women, management and employees alike; we make no distinction, because this is a yard that works—that, although they have acted so courageously, they cannot expect special treatment from the Government, and orders will be placed on the basis of fair competition. I disagree with Government policy in that I believe that when industry is becoming more efficient it needs incentives to take the next step, and the Government perhaps expect it to take that step too quickly; nevertheless, that is the line that we have sold. However, on our recent visit to the yard—after the publication of the report—we were asked, rightly, how the preaching of hon. Members that the Government placed orders on the basis of fair competition could be justified through the Select Committee's findings.
    Do not the Government owe a debt to Cammell Laird? Their policy of fair competition has not been fully implemented throughout all shipyards. There has been a "noble exception"—noble, that is, if one represents Harland and Wolff; far less noble if one represents Cammell Laird, because Cammell Laird lost out. I have already explained to the Minister about the likely

    185
    knock-on effect. Cammell Laird now faces redundancies. I hope that we shall hear about the programme of work that is coming up—a programme that the yard was told must be won on the basis of fair competition. We want a Government guarantee that there will indeed be fair competition. We should also like the Minister's comments on whether the Government are not now in the debt of Cammell Laird, which it has damaged severely in its attempt to ensure the privatisation of Harland and Wolff.
    The work force at Cammell Laird is not asking for special treatment for turning back those militants who were out to destroy our yard; it is not asking for special treatment for crossing the picket line and going into work, although many people were beaten up by the thugs on the picket line. The women who work in that yard are not asking for special treatment for undergoing all the verbal sexual abuse from rent-a-gang on that picket line to keep the shipyard open. They are asking—and expect from the Government—special treatment in the next round of orders, and we hope that the Minister has something to announce this evening.
    I now invite the hon. Member for Wirral, South to join in the debate.
    12.39 am
    Mr. Barry Porter: That invitation is gratefully accepted. First, I always support my own Member of Parliament, the hon. Member for Birkenhead (Mr. Field), so far as I can and when he is not making party political points—and he rarely does that. Secondly, it is not unknown that I take a great interest in the affairs of Northern Ireland. I am a member of the Trade and Industry Select Committee which visited Harland and Wolff prior to privatisation and played some part in persuading the Government—if persuasion were needed—that certain moneys should be paid prior to that privatisation. I make no complaint about that. It was entirely appropriate that those moneys should be paid and that the yard should be privatised.
    One of the reasons why I take an interest in the affairs of Northern Ireland is that I believe in the union of the United Kingdom and that all its parts should be treated equally. I know that the Province has particular problems and that there are particular reasons why it should be treated differently, but that should not be so differently that other parts of the United Kingdom are put at a disadvantage.
    We all know why the money was given to Harland and Wolff and nobody complained about that, but, as my own Member of Parliament said, Cammell Laird should not be placed at a disadvantage, for the reasons that the hon. Gentleman gave. The work force and management have done everything that the hon. Gentleman described. They went through an enormously difficult period, they crossed vicious picket lines and did everything that workers on Merseyside are supposed not to do. The Government should bear in mind what they did for Harland and Wolff and what the workers and management of Cammell Laird did for themselves. We do not ask for special treatment; we ask for parity and equality and that is not much to ask in the circumstances.
    12.43 am
    The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Michael Neubert): First, I congratulate the hon. Member for Birkenhead (Mr. Field) on securing the Adjournment debate as it yet again testifies to his tireless concern for his constituents who work in the Cammell Laird shipyard at Birkenhead. Those workers at the yard will also be grateful for the intervention of my hon. Friend the Member for Wirral, South (Mr. Porter), who takes a close, consistent and informed interest in these matters.
    I hope that the hon. Member for Birkenhead will forgive me if I do not follow his argument about what the position and viability of Cammell's would now be if, in 1984, the yard had won the contract for the aviation training ship. While his reasoning undoubtedly seems logical, it is none the less hypothetical. Furthermore, I doubt whether the outcome of a single competition would have had quite the influence that the hon. Gentleman believes and whether it can be blamed for as much as he has claimed. I was very heartened to see, when I visited Cammell Laird in his company last autumn, the spirit of co-operation and partnership that has now grown up between work force and management.
    I am grateful that the hon. Gentleman does not expect me to anticipate now the formal response that the Government have yet to give to the Defence Committee's report on the supplementary estimate that referred to the payment that was made to Harland and Wolff plc in settlement of the outstanding claim on the aviation training ship prior to the privatisation of that yard last year. As the hon. Gentleman, from his experience on the Select Committee, has acknowledged, that formal Government response is being prepared, and will be issued in the usual way. On that aspect, therefore, I can do more than rehearse the facts as the Ministry of Defence witnesses presented them to the Committee in the published evidence. Having done that, which I shall do on the basis of the memorandum submitted to the Committee, which is published on pages 25 and 26 of its report, I shall, if I have time, look to the future of Cammell Laird.
    The history is significantly different from the version presented tonight by the hon. Member for Birkenhead. The background is as follows. In 1984, a replacement was needed for the aviation training ship then in service with the Royal Navy, RFA Engadine. The vessel was near the end of her useful life, was too small to operate modern anti-submarine helicopters, and had severe limitations for deep-water operations in bad weather. Our requirement for the replacement vessel was that it should have a larger flight deck than Engadine, be able to operate six Sea King helicopters—three of them simultaneously—and be able to operate in motion in all but the most severe weather. We therefore needed command and control facilities for operating helicopters safely. These facilities, together with others, such as a self-defence system, an action information organisation and communications, were collectively known as the weapon system. This is important to the later stages in the story.
    Vickers Shipbuilding and Engineering Ltd. undertook a concept study for us, and we decided that it would be feasible to meet the requirement by converting a merchant vessel. As the ship had to be able to operate six Sea King helicopters, as well as ferrying 12 Sea Harrier aircraft, a

    187
    vessel of some 15,000 tonnes was needed. VSEL identified three ships that might be suitable for conversion, including the Contender Bezant, a vessel built in Italy in 1981. We invited firm price bids covering two options—the purchase and conversion of an existing vessel, and a new build—so that we could consider and evaluate the cost-effectiveness of both.
    Tenders were submitted by Harland and Wolff plc and by Cammell Laird. As Cammell Laird was then part of the nationalised British Shipbuilders, both yards were in the public sector and were thus on an equal footing. Both companies proposed to buy and convert Contender Bezant, and we concluded that the Harland and Wolff proposal was the more cost-effective way of meeting the requirement. We accordingly placed a firm price contract on Harland and Wolff in March 1984 to buy and convert Contender Bezant at a cost of some £49 million. Harland and Wolff bought the ship later that month and began work soon after.
    For the weapon system, we produced a cardinal point specification in April 1984, and Harland and Wolff ran a subcontract competition, which Racal Marine Systems won. Harland's placed the contract on that company for the ship weapon system authority in December 1984. It was thus identified as the prime contractor for both the ship and its weapon system. This change extended the build period of the vessel by nine months and raised the contract price by some £11 million. Other approved alterations, worth some £3 million, brought the final price to £63 million, with a contract acceptance date of December 1986.
    Converting Contender Bezant was a major task. It involved stripping out and refurbishing and extending many of her systems, as well as major changes to her structure to change her from a roll on-roll off container ship to one with a flight deck, hangar and the services needed for helicopter operations. Harland and Wolff accepted liability for any consequential work arising from her condition. Much rectification work turned out to be needed, including major refurbishment of the main engines. The ship was eventually accepted into service as RFA Argus in March 1988, some 14 months later than the revised contract acceptance date. She was well finished and fully meets the Royal Navy's requirement. Argus became fully operational with commander in chief fleet in January 1989 and has since then been available for flying training operations. Argus is a very good ship.
    In February 1987, Harland and Wolff submitted an interim claim for reimbursement of some £26 million. It claimed that those were extra costs incurred up to December 1986 for reasons that it alleged were the Ministry of Defence's responsibility. We prepared a detailed rebuttal of the claim. After inconclusive discussions, the company filed a final claim for £45·3 million in August 1988. In general, the company claimed that this represented extra spending that it had to make because of actions by the Ministry of Defence. We recognised that a small part of the delay and dislocation and extra cost resulted from finalising certain requirements for communications equipment, but not to the extent that could justify the sum claimed. We also held that the claim was not supported by factual evidence, as required by the contract.
    188
    While that large and complex claim was being considered, proposals for privatising Harland and Wolff began to emerge. The Government regarded it as a matter of urgency to achieve a viable private sector solution, and one of the many issues that it was felt important to resolve before the transfer of the business to the private sector was the outstanding claim on the aviation training ship. The Ministry of Defence had a particular interest in the successful privatisation of Harland and Wolff because the firm was the prime contractor for the design of the auxiliary oiler replenishment vessel and is now building the first of class, RFA Fort Victoria. As outlined in the Select Committee's report, we considered it right, taking into account the wider circumstances of the privatisation and the need to safeguard the AOR programme, to make a settlement of the claim. We finally settled on a figure of £22·5 million to be paid to Harland and Wolff plc. That was entirely without prejudice to our legal position and without admission of liability. That payment of £22·5 million appeared in the supplementary estimate, into which the Select Committee inquired.
    It is clear from that account that the £22·5 million payment is not a subsidy to Harland and Wolff and it certainly has no bearing on the original competition some six years ago. The settlement of £22·5 million was made with the public sector Harland and Wolff plc to clear the way for privatisation and will be used by that company to repay grants from the Northern Ireland Department of Economic Development. It is therefore not funding for the private sector firm Harland and Wolff Shipbuilding and Heavy Industry. While it is possible to argue, as the hon. Member for Birkenhead has, that, had Cammell Laird won the ATS competition, it would not have made the same claims on the Ministry of Defence in respect of the ATS, it is equally possible that it would have, or that Cammell Laird would have made claims that Harland's did not. It is all quite hypothetical.
    Mr. Barry Porter: I am sorry to interrupt my hon. Friend, and I am delighted that he is reading the brief from the Ministry so splendidly. It is the perceived view that Harland and Wolff has been treated more generously by the Government than other shipyards, including Cammell Laird. Does my hon. Friend agree that that is a fact? The hon. Member for Birkenhead (Mr. Field) and I do not object to that; we are saying that Cammell Laird deserves the same treatment.
    Mr. Neubert: I do not dispute that it may be the perceived view, but I hope that my hon. Friend will ensure that it is not taken as a fact.
    What is not hypothetical is that the Ministry is not subsidising Harland and Wolff. The contract for RFA Fort Victoria was won competitively and was carefully scrutinised by consultants to ensure that it was unsubsidised. When the yard was privatised, the contract was totally assigned by the public sector Harland and Wolff plc to the private sector Harland and Wolff Shipbuilding and Heavy Industry, and there was no relaxation in the terms of that contract. The ATS contract was won by Harland and Wolff in competition at a price that the MOD considered at the time, and still considers, to have been realistic. Although, in the event, costs did overrun on the aviation training ship, there was no reason at the time to believe that the Harland's tender was unrealistic. I have explained the background against which

    189
    some costs were incurred. The Northern Ireland Department of Economic Development was assured by Harland and Wolff that the tender was on a full-cost basis including profit, and no losses were expected on the contract.
    I now turn to the prospects for Cammell Laird. I should first confirm that our procurement policy for warships, as for all other equipment, is founded upon value for money and competition. Commercially competitive bids will win our work. Cammell Laird should, if it wishes, be able to bid for a wide range of MOD work—major surface vessels and conventionally-powered submarines in particular. As I said during the debate on the Royal Navy on 5 February, we have plans to run competitions for our requirements in several categories, and we would expect Cammell Laird, as part of the VSEL group, with its combination of design ability and physical capacity, to be able to be among the competing firms.
    The redundancies that the yard has recently announced are certainly to be regretted, but I must stress that employment levels at defence contractors are a matter for them and not for the MOD or, for that matter, of any other Government Department. Equally, it is not for me to advise the warship yards on their commercial strategy, but we would always welcome diversification by defence contractors into areas of civil work. Not only does that allow the best use to be made of defence-related technology, but it broadens the customer base of our suppliers, so strengthening their ability to undertake our work cost effectively. So I am pleased that Cammell Laird is actively pursuing some merchant order prospects, and I wish it every success in those efforts.
    Although I do not wish to trespass on the territory of my hon. Friends the Minister for Industry and the Under-Secretary of State for Northern Ireland, my hon.
    190
    Friend the Member for Wiltshire, North (Mr. Needham), I can assure the House that the Government will not provide any special support to the privatised Harland and Wolff beyond the terms of the privatisation package, apart from intervention fund aid on merchant contracts and other grants normally available to other private sector companies in Northern Ireland. The Government have given no guarantees about future levels of employment at Harland and Wolff. I can appreciate that the hon. Member for Birkenhead, and even perhaps my hon. Friend the Member for Wirral, South, who is well informed about Northern Ireland matters, may find Harland's continued access to intervention fund aid unfair.
    Mr. Frank Field indicated dissent.
    Mr. Neubert: However, it is not and I am glad that the hon. Member for Birkenhead agrees. He will recall that the restructuring of British Shipbuilders in 1985 provided that yards designated for privatisation as warship yards would not be eligible for intervention fund support. It was on that basis that Cammell Laird was privatised and the buyers knew this. But Harland and Wolff was privatised as a merchant yard, and it is not able to compete with the warship yards for front-line ships, such as frigates and submarines, even though it can build support vessels such as the AOR.
    Cammell Laird has a future, despite the recent redundancies, but that future is wholly in the hands of the firm itself, not of the Government. The future of Cammell Laird lies, as the hon. Member for Birkenhead said, in the continuing drive for efficiency to which management and work force are both committed. That is to their credit, and I wish them well.
    Question put and agreed to.
    Adjourned accordingly at two minutes to One o'clock.

PRIME MINISTER

  Question Time
  Mr. Allen
  To ask the Prime Minister if she will make it her policy(a) to make her answers at Prime Minister's Question Time more brief and (b) to seek to make greater use of statements at 3.30 pm

  The Prime Minister
  It is not always appropriate to provide brief answers to some of the questions which are asked.

  Ministry of Agriculture, Fisheries and Food
  Mr. Vaz
  To ask the Prime Minister how many representations she has received, and from whom, calling for the separation of a Ministry of Food from the Ministry of Agriculture, Fisheries and Food; and if she will make a statement.

  The Prime Minister
  I have received representations calling for the separation of a Ministry of Food from the Ministry of Agriculture, Fisheries and Food, as well as representations in favour of maintaining a single Department.

  I do not believe that the interests of the consumer and industry would be best served by such a separation. The present arrangements ensure that ministerial responsibility for the food chain is covered from the point of production to the point of sale to the consumer. I said at the Royal show last year that I do not propose to dismember the Ministry of Agriculture, Fisheries and Food. This remains my view.

  Nuclear Accident (Emergency Procedures)
  Dr. David Clark
  To ask the Prime Minister whether she will conduct a review of emergency procedures in the event of an accident at a nuclear power station in northern France, and the subsequent radioactive contamination of the United Kingdom population, food supplies and the environment; and if she will make a statement.

  The Prime Minister
  The United Kingdom's emergency procedures for dealing with a nuclear accident overseas were thoroughly reviewed after the Chernobyl incident in April 1986. I reported the first results of that review to the House on 18 December 1986,Official Report, columns 612-13. I reported again on 30 June 1987, Official Report, columns 65-67. The contingency arrangements now in place would be implemented in the event of an accident at a nuclear power station in northern France or elsewhere which could have consequences for the United Kingdom. In the unlikely event of any such accident there would be, in accordance with normal practice following any emergency, a further review of our contingency arrangements in the light of experience gained.

HOME DEPARTMENT

  Non-custodial sentences
  Mr. Sheerman
  To ask the Secretary of State for the Home Department what was the number and proportion of offences triable only on indictment which attracted non-custodial sentences in each of the last three years.

  Mr. John Patten
  Information for 1986 to 1988 is given in the table.

  Data for 1989 will not be available until autumn 1990.

  Persons given non-custodial sentences for offences triable only on indictment 1986 to 1988

  England and Wales

  Year

  Total sentenced

  Number given non-custodial sentences

  Per cent.

  1986

  9,679

  2,520

  26

  1987

  10,163

  2,498

  25

  1988

  10,464

  2,752

  26

  Animal Experiments
  Mr. Roger King
  To ask the Secretary of State for the Home Department whether animal experiments conducted under LD50 tests are still being licensed.

  Mr. Peter Lloyd
  Yes. The latest available information is published in table 14 of the "Statistics of Scientific Procedures on Living Animals, Great Britain, 1988" (Cm. 743).

  Personal Security Systems
  Mr. Alton
  To ask the Secretary of State for the Home Department whether he will consider providing pensioners, the disabled and those without incomes with grants to enable the installation at their homes of personal security systems.

  Mr. John Patten
  No. There are many examples of lock fitting schemes being conducted without a need for an individual householder's grant. These have often been carried out with valuable private sector support, and our safer cities programme already includes projects of this kind. Local authorities may also have access to urban programme and estate action resources for such purposes.

ENVIRONMENT

  Chemicals (North Sea)
  Mr. Flynn
  To ask the Secretary of State for the Environment how many tonnes per annum of(a) nitrates, (b) phosphates, (c) cadmium, (d) zinc, (e) lead, (f) copper, (g) mercury and (h) liquid low level radioactive wastes in each case from United Kingdom sources are discharged or dumped into the North sea.

  Mr. Heathcoat-Amory
  Recent information on United Kingdom inputs of contaminants to the North sea via rivers, coastal discharges and dumping from ships is included in the 1990 interim report on the quality status of the North sea prepared for the third North sea conference in the Hague on 7 and 8 March. I am placing a copy in the Library together with the ministerial declaration and the
  3
  implementation report on the action taken by North sea states since the London conference to reduce these discharges still further.

  Some of the figures quoted in the interim quality status report have been compiled using differing methodologies, particularly in the case of river inputs and are, therefore, not directly comparable.

  Local Government Finance
  Mr. Hannam
  To ask the Secretary of State for the Environment if he will make it his policy to take steps to ensure that volunteer carers who are employed by individual disabled people and who have not been introduced to that person by an independent charitable organisation will be exempt from the community charge, provided that they meet the other exemption criteria.

  Mr. Chope
  The criteria for the exemption of care workers require, inter alia, that the individual is employed to provide care or support to another person and that the employer is either a public authority, a body established for charitable purposes only, or the person receiving care. In this last circumstance I regard it as helpful that the regulations enable a community charges registration officer to have confirmation of the position of the claimant from an independent charitable organisation.

  Mr. Brandon-Bravo
  To ask the Secretary of State for the Environment if he will list the total net spending and relevant applicable community charge, to levels of spending at standard spending assessment, 10 per cent. and 20 per cent. above standard spending assessment, and the increase or decrease in each case against the currently approved community charge for each charging local authority.

  Mr. Chope
  I refer my hon. Friend to my answer to my hon. Friend the Member for Kingswood (Mr. Hayward) on 19 March 1990,Official Report, column 478.

  Mr. Austin Mitchell
  To ask the Secretary of State for the Environment for how many local authorities the poll tax is higher than the notional figure used in setting the level which income support beneficiaries are required to pay; what is the median amount by which they are higher; and what is the number and names of those which are lower.

  Mr. Chope
  The Government do not set a level of community charge which income support beneficiaries are required to pay.

  Mr. Austin Mitchell
  To ask the Secretary of State for the Environment if he will make it his policy when he publishes the poll tax figures for each English district council to publish for each district the amount per capital also due to(a) that district, (b) the county, (c) the amount of each of these offseet by Government grants, (d) the safety net figure per capita plus or minus, (e) the amount per capita that poll tax would have been had

  Percentage change adjusted GRE to SSA Per cent.

  Cash change adjusted GRE to SSA £ million

  Proportion of population in urban areas Per cent.

  Berkshire

  12·8

  42·696

  92·5

  Bedfordshire

  12·3

  30·271

  87·1

  Oxfordshire

  11·7

  26·322

  77·7

  4
  central Government financed 50 per cent. of local Government spending and (f) the per capita gain or loss for the uniform business rate.

  Mr. Chope
  No.

  Mr. David Nicholson
  To ask the Secretary of State for the Environment what are the estimated total amounts of spending in 1989–90 and in 1990–91, and the percentage increase for(a) each English shire county and (b) each shire district within Somerset, Devon, Dorset and Wiltshire.

  Mr. Chope
  I intend to place a summary of the information returned from local authorities in the Library of the House after information has been received from all authorities.

  Mr. Cohen
  To ask the Secretary of State for the Environment when he proposes to introduce regulations which ensure that a carer who resides part-time in his or her home and the remainder of the time in the home of the person being cared for pays only one poll tax liability; and if he will make a statement.

  Mr. Chope
  The Community Charges (Miscellaneous Provisions) (No. 2) Regulations 1989 came into force on 28 December 1989. Regulations 62 of the regulations provides that no standard community charge will be payable on a property where the owner has moved to live in another place for the purpose of giving personal care and the property has been unoccupied for less than 12 months. Charging authorities have the discretion to extend the period of relief.

  Mr. Ward
  To ask the Secretary of State for the Environment if he will review the conditions for the imposition of the standard community charge on a former home which the owner has not be able to sell within the present three-month limit.

  Mr. Chope
  I refer my hon. Friend to the answer given by my hon. Friend the Minister for Local Government and Inner Cities to my hon. Friend the Member for Gillingham (Mr. Couchman) on 21 March 1990,Official Report, columns 658-59.

  Mr. Austin Mitchell
  To ask the Secretary of State for the Environment if he will list, in order of percentage loss or gain, the grant-related expenditure for 1989–90 against the standard spending assessment for 1990–91 for all English counties; what is the cost change between the two; and if he will list for each the proportion of the population living in urban areas.

  Mr. Chope
  The information requested is shown in the table. The proportion of the population living in urban areas is calculated from data in the 1981 Census publication "Key Statistics for Urban Areas" which contains a definition of urban areas. Similar data are not readily available for district councils or London boroughs.
  5

  Percentage change adjusted GRE to SSA Per cent.

  Cash change adjusted GRE to SSA £ million

  Proportion of population in urban areas Per cent.

  Hertfordshire

  11·5

  49·255

  93·5

  Hampshire

  11·3

  76·408

  90·6

  Isle of Wight

  11·0

  6·249

  84·2

  Buckinghamshire

  10·9

  31·902

  86·1

  Essex

  10·9

  74·691

  89·2

  East Sussex

  10·3

  30·401

  87·7

  Surrey

  10·3

  41·580

  91·4

  Kent

  10·2

  71·279

  86·7

  West Sussex

  9·1

  26·854

  87·4

  Cleveland

  9·0

  27·833

  97·0

  Cambridgeshire

  8·5

  25·007

  79·2

  Avon

  8·4

  35·031

  92·8

  Northamptonshire

  7·8

  21·531

  82·1

  Somerset

  7·7

  16·111

  65·1

  Cornwall

  7·5

  16·330

  64·6

  Wiltshire

  7·4

  18·623

  75·8

  Cumbria

  7·3

  16·721

  72·3

  Dorset

  7·1

  19·283

  85·5

  Nottinghamshire

  7·1

  33·952

  92·7

  Shropshire

  7·0

  13·738

  71·3

  Humberside

  7·0

  30·487

  88·5

  Durham

  6·9

  19·580

  87·3

  Gloucestershire

  6·9

  16·216

  79·5

  Lincolnshire

  6·7

  18·584

  70·5

  Lancashire

  6·6

  45·771

  91·3

  Leicestershire

  6·0

  26·115

  88·8

  Suffolk

  6·0

  16·691

  70·6

  Devon

  6·0

  27·428

  79·3

  Norfolk

  5·8

  19·258

  69·3

  Cheshire

  5·4

  24·483

  88·6

  North Yorkshire

  5·1

  16·245

  72·1

  Northumberland

  4·6

  6·263

  79·7

  Hereford and Worcester

  4·5

  13·654

  72·6

  Derbyshire

  3·9

  16·710

  88·9

  Warwickshire

  3·5

  7·661

  81·1

  Staffordshire

  3·5

  16·712

  89·0

  Mr. Austin Mitchell
  To ask the Secretary of State for the Environment pursuant to his answer to the hon. Member for Great Grimsby of 19 March, how he calculates the figures of(a) £28 and (b) £2.

  Mr. Chope
  The figures are calculated by applying the appropriate monetary weights given in paragraph 3.32 of the Revenue Support Grant Distribution Report (England) to the values of the specified indicators for Humberside, multiplying the result by the appropriate national scaling factor for highway maintenance and expressing the result as an amount per relevant adult (rounded to the nearest £1).

  Mr. Austin Mitchell
  To ask the Secretary of State for the Environment what is his estimate of(a) the number of second homes, (b) the relationship of the standard charge to the poll tax and (c) the extra revenue accruing from this for each local authority in England; what are his proposals for taking this into account in faxing next year's expenditure targets; and if he will make a statement.

  Mr. Chope
  Detailed information on the number of people registered as subject to the standard community charge, or on the multipliers being set by charging authorities is not yet available to the Department. Income from the standard charge is not taken into account in determining English local authorities' revenue-raising capacity for the purposes of grant distribution.

  Mr. Austin Mitchell
  To ask the Secretary of State for the Environment with reference to his Revenue Support 6
  Grant Distribution Report (England), annex A, V, highway maintenance, what was the basis on which the multipliers for road type weighting factors were arrived at.

  Mr. Chope
  Road lengths of different types are weighted in the following proportions:

  Weighted

  Principal roads in built-up areas

  6

  Principal roads in non-built-up areas

  3

  Other roads in built-up areas

  2

  Other roads in non-built-up areas

  1

  These weightings assume that the average cost of maintaining principal roads is three times that of maintaining non-principal roads and that the cost of maintaining built-up roads is double that of maintaining non-built-up roads. The 3:1 relative cost weighting between principal and non-principal roads is based on analysis of expenditure data for the two types of road from maintenance outturn forms returned to the Department of Transport. The 2:1 ratio between built-up and non-built-up roads is based on evidence from sparsely populated counties provided by the Association of County Councils in the early 1980s.

  Mr. Ward
  To ask the Secretary of State for the Environment if he will seek powers to require councils to reduce their community charge level next year by the amount contained in this year's charge for their contribution to the safety net.
  7
  Mr. Chope
  No, although I hope that councils will do so voluntarily. Community charge bills in 1990–91 show safety net contributions as a separate item. In following years bills for authorities that formerly contributed to the safety net will show a straightforward comparison between the amount needed to provide a standard level of service and authorities' actual spending plans. It will be for authorities to justify to their chargepayers any excess of the latter over the former. For authorities receiving area protection grant, which replaces the safety net after 1990–91, this will appear as a separate item on community charge bills.

  Lancashire (Derelict Land Reclamation)
  Mr. Miscampbell
  To ask the Secretary of State for the Environment how much funding has been provided by the Government for derelict land reclamation in Lancashire in each of the last three years.

  Mr. Moynihan
  The information requested is as follows:

  £ million

  Grant Programme

  Actual 1987–88

  Actual 1988–89

  Forecast 1989–90

  Derelict land grant

  4·102

  3·278

  4·047

  Urban Programme1

  0·372

  0·166

  0·264

  Urban development grant 12

  3·941

  2·665

  3·535

  Urban regeneration grant 12

  3·941

  2·665

  3·535

  City grant 12

  3·941

  2·665

  3·535

  1 Includes expenditure on unused or waste land as well as derelict land.

  2 Information does not relate solely to the costs of reclamation since grant is based on the total project costs including those of reclamation.

  New Town Tenants
  Mrs. Gorman
  To ask the Secretary of State for the Environment how many new towns tenants have bought their homes since the right to buy was introduced; and if he will show the percentages for each new town in England and Wales.

  Mr. Chope
  Some 28,300 tenants have bought their homes from English new town corporations since October 1980, of which 9,400 were bought under the terms of the right-to-buy legislation. This does not include the number of tenants who have bought their homes after the transfer of new town stock to various local authorities and housing associations during the period; these sales cannot be distinguished from other sales by local authorities and housing associations.

  The table gives the estimated percentage of stock sold by individual new towns to tenants between October 1980 and the date of transfer to local authorities and-or housing associations.

  Date of transfer

  Percentage of stock sold to sitting tenants

  Basildon

  —

  32

  Central Lancashire

  July 1985

  4

  Milton Keynes

  —

  26

  Northampton

  April 1985

  12

  Peterborough

  November 1989–January 1990

  42

  Redditch

  April 1985

  12

  Runcorn

  December 1989

  23

  8

  Date of transfer

  Percentage of stock sold to sitting tenants

  Skelmersdale

  April 1985

  15

  Telford

  —

  47

  Warrington

  —

  21

  Washington

  January 1986

  10

  For information about Welsh new towns I refer my hon. Friend to the Secretary of State for Wales.

  Beach Pollution (Cleethorpes)
  Mr. Redmond
  To ask the Secretary of State for the Environment (1) what action is being taken to remedy the design fault in Cleethorpes long sea outfall pipe;

  (2) what action is being taken to stop designated bathing beaches at Bridlington, Cleethorpes, Hornsea and Withernsea being polluted by raw sewage from storm overflow pipes;

  (3) what action is being taken to stop sewage discharges from Grimsby, Paull and Hull being deposited on beaches in the Cleethorpes area.

  Mr. Heathcoat-Amory
  These are matters for the National Rivers Authority.

  Radon
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment what is the estimated percentage of properties in each Cornwall district with radon concentration above the new action level.

  Mr. Heathcoat-Amory
  The estimated proportion of houses exceeding the new action level in each Cornwall district is as follows:

  per cent.

  Caradon

  20

  Carrick

  15

  Kerrier

  30

  North Cornwall

  25

  Penwith

  30

  Restormel

  20

  Housing Associations
  Mr. Alton
  To ask the Secretary of State for the Environment what account is taken in providing grants for new housing associations of the assets or funding available to them in the allocation of resources for 1990–91.

  Mr. Chope
  Housing Corporation circulars HC31/88 and HC74/89 set out the financial viability criteria that the corporation applies where registered housing associations seek housing association grant. They cover associations' property assets and reserves, and also their management competence. The corporation has discretion to vary the criteria for small or new associations.

  Mr. Alton
  To ask the Secretary of State for the Environment what is the average rent payable by a disabled person living in special needs accommodation provided by housing associations operating on Merseyside.

  Mr. Chope
  The Department does not have this information.
  9
  Mr. Alton
  To ask the Secretary of State for the Environment what representations he has received about the levels of grants payable to housing associations on Merseyside providing accommodation for people with special needs.

  Mr. Chope
  None, other than the hon. Member's letter of 16 March to my right hon. Friend the Secretary of State about a proposed housing association development at Fazakerley, to which I shall be replying shortly.

  Rents
  Mr. Andrew Smith
  To ask the Secretary of State for the Environment whether his Department keeps an index of housing costs for those living in rented accommodation.

  Mr. Chope
  The Department does not maintain such an index. There are separate indices for rent and other items of housing expenditure within the general index of retail prices (RPI), which is published monthly by the Central Statistical Office. The RPI, of course, reflects the expenditure patterns of the majority of households and not just those in rented accommodation.

  Pollution (Fines)
  Mr. Ward
  To ask the Secretary of State for the Environment what was the average fine imposed by magistrates courts in 1988 for river and harbour pollution.

  Mr. Heatcoat-Amory
  Information collected by my right hon. and learned Friend the Secretary of State for the Home Department shows that for cases brought under sections 31 or 32 of the Control of Pollution Act 1974 the average fine imposed by magistrates courts in 1988 for water pollution offences was £560. The maximum fine available is £2,000 and up to three months' imprisonment. On indictment in the Crown Court there is no limit on the fine that may be imposed and terms of imprisonment can be up to two years.

  Local Government Boundaries
  Mr. Paice
  To ask the Secretary of State for the Environment what information he has on the progress of the Local Government Boundary Commission's proposals for the Suffolk-Cambridgeshire border.

  Mr. Heathcoat-Amory
  The Commission's programme is a matter for it to determine within the statutory requirement that it should complete the review of English county boundaries by 31 March 1992. I understand that the commission is actively considering the Suffolk-Cambridgeshire boundary in the light of responses to its draft proposals.

  Mortgaged Property
  Mr. David Porter
  To ask the Secretary of State for the Environment (1) if he will make it his policy to introduce a duty of disclosure to oblige landlords to disclose(a) details of outstanding charges against the property at the start of a lease and (b) whether the lender has granted permission for the property to be let;

  (2) if he will make it his policy to oblige mortgage lenders to obtain from borrowers an annual confirmation of occupiers of mortgaged property; and if he will make a statement;
  10
  (3) if he will make it his policy to seek to amend part III of the Housing Act 1985 to make it a statutory duty on housing authorities to accommodate people who are outside the existing categories of the involuntarily homeless, who are made homeless because the landlord to whom they were paying rent has unbeknown to them fai led to pay his mortgage on that property;

  (4) what legislation would need to be amended to bring into effect protection for people who pay rent to a landlord for property which they do not know is mortgaged;

  (5) if he will review the arrangements for repossessions of property by court orders where a borrower has failed to meet mortgage repayments but has collected rent from a tenant in the property, to enable the tenant to be offered a first refusal on an option to buy or an assured tenancy for a limited period.

  Mr. Chope
  I will write to my hon. Friend.

  Local Government and Housing Act 1989
  Mr. Fearn
  To ask the Secretary of State for the Environment if he has had any consultations with local authority associations on the main provision of part VIII of the Local Government and Housing Act 1989 since January 1990; and if he will make a statement.

  Mr. Chope
  Following the announcement on 22 February to defer implementation of part VIII of the 1989 Act until 1 July, the local authority associations have been consulted on the draft regulations for the test of "resources" for owner occupiers and tenants. They have subsequently been consulted on a draft direction and associated guidance on the test of resources for landlords. Once their comments have been received and considered we will finalise the regulations and circulars relating to part VIII for issue as soon as possible thereafter.

  Council House Sales
  Mr. Dykes
  To ask the Secretary of State for the Environment what information he has on how many dwellings each local authority has sold under the right-to-buy legislation or voluntarily since April 1979; and what percentage of the total local authority stock they represent.

  Mr. Chope
  I have placed in the Library a table giving available information on local authority sales up to December 1989. It shows year by year information for each authority since 1984–85 together with cumulative figures since April 1979 and the proportion of their stock sold since April 1979.

  French Nuclear Power Stations
  Mr. Hardy
  To ask the Secretary of State for the Environment what is his estimate of the volume of irradiated material and the scale of pollution from radioactive discharges which entered British coastal waters from the nuclear power stations on or near the northern coast of France during 1989.

  Mr. Trippier
  A programme of regular and extensive monitoring of the marine environment around the United Kingdom coastline is carried out by the Ministry of Agriculture, Fisheries and Food. It is not possible to estimate the amount of irradiated material from overseas nuclear installations within the low levels of radioactivity measured in United Kingdom coastal waters.

  Nuclear Waste
  Dr. Thomas
  To ask the Secretary of State for the Environment how much is being spent by Nirex in the current financial year on research into the safe disposal of nuclear waste; and how much money is being spent(a) in the United States and (b) Sweden on similar work in this financial year.

  Mr. Trippier
  I understand that Nirex's estimated expenditure for this financial year on research and development work towards a deep disposal facility for low and intermediate-level radioactive waste is £13·9 million. The Department does not have any information about expenditure on such research in the United States or Sweden.

  Encapsulation Plants, Sellafield
  Dr. Thomas
  To ask the Secretary of State for the Environment what is the projected timetable for intermediate-level waste encapsulation at Sellafield for each of the encapsulation plants.

  Mr. Trippier
  There are three intermediate-level waste encapsulation plants currently under construction at Sellafield. One will be operational later this year; the others are expected to be commissioned in 1992.

  Dr. Thomas
  To ask the Secretary of State for the Environment (1) what was the level of expenditure by his Department on research into the safety of(a) intermediate and (b) low-level nuclear waste disposal for each year from 1970 to 1990, inclusive; and what are the projected figures to 1999;

  (2) what was the level of expenditure by his Department on research into the safety of high-level nuclear waste disposal for each year from 1970 to 1990, inclusive; and what are the projected figures to 1999.

  Mr. Trippier
  My Department announced in 1977 that it would be assuming overall responsibility for radioactive waste management policy and in 1978–79 a full programme of research commenced under DOE control. Our wide-ranging research programme produces long-term benefits for the safe disposal of all levels of radioactive waste. It is not therefore practicable to divide the costs in the way requested. The level of expenditure by my Department on radioactive waste management research at actual prices for each financial year has been as follows:

  £million

  1978–79

  3·3

  1979–80

  5·1

  1980–81

  9·7

  1981–82

  8·5

  1982–83

  9·8

  1983–84

  8·5

  1984–85

  9·6

  1985–86

  10·6

  1986–87

  11·4

  1987–88

  10·2

  1988–89

  8·8

  1989–90

  10·8

  It is envisaged that current levels of expenditure are likely to be maintained broadly until the end of the century.

  Dr. Thomas
  To ask the Secretary of State for the Environment whether there are any plans to build a nuclear waste repository under the seabed.
  12
  Mr. Trippier
  The United Kingdom has no such plans.

  Dr. Thomas
  To ask the Secretary of State for the Environment why the table 3.2b on pages 3 to 11 of the United Kingdom radioactive waste inventory (DOE/RW 188.061) entitled "Conditioned Waste Volumes Classed According to Waste Category: Waste from Committed Sources" includes waste arising from British Nuclear Fuels plc. from uncommitted reactors which are not currently in existence, under construction or required in future for currently approved programmes.

  Mr. Trippier
  The uncommitted arisings are from the operations of the THORP plant at Sellafield following major maintenance after its first 10 years or so of operation. At the time the inventory was compiled, these were included with the committed arisings on the basis that THORP itself was committed.

  Mortgages
  Mr. David Porter
  To ask the Secretary of State for the Environment if he will make it his policy to meet building society representatives and other mortgage lending institutions to discuss their approaches to rescheduling loans and repossession.

  Mr. Michael Spicer
  Ministers and officials at the Department of the Environment frequently meet representatives from mortgage lending institutions and discuss a range of issues, including mortgage arrears and possessions. I have met recently with representatives of the Council of Mortgage Lenders, whose members include all building societies of any size and many other mortgage lending institutions.

  Rented Property
  Mr. Meacher
  To ask the Secretary of State for the Environment whether his Department keeps an index of housing costs for those living in rented accommodation.

  Mr. Michael Spicer
  I refer the hon. Member to the answer given today by the Parliamentary Under-Secretary of State, my hon. Friend the Member for Southampton, Itchen (Mr. Chope) to the hon. Member for Oxford, East (Mr. Smith).

  Chatham and Medway Docks
  Mr. Cohen
  To ask the Secretary of State for the Environment who are the consultants who have been employed to assist with the Chatham and Medway docks redevelopment project.

  Mr. Douglas Hogg
  I have been asked to reply.

  This is a matter for the boards of English Estates and the Chatham Historic Dockyard Trust.

NATIONAL FINANCE

  Household Incomes
  Mr. Gregory
  To ask the Chancellor of the Exchequer what was the average weekly household income in £ sterling as a percentage of total household income for the Yorkshire and Humberside region for 1979, 1983, 1987 and the most recent year; and if he will make a statement.
  13
  Mr. Norman Lamont
  Estimates of gross average weekly household income for the United Kingdom and the Yorkshire and Humberside region are published in table 58 of the 1979 family expenditure survey report and in table 31 of the 1983, 1987 and 1988 reports, copies of which are in the Library.

  European Community (Contribution)
  Mr. Allen
  To ask the Chancellor of the Exchequer what is the United Kingdom gross and net contribution to the European Community for each of the years for which figures are available at standard prices(a) for all contributions and (b) for contributions towards agricultural spending.

  Mr. Ryder
  The United Kingdom's total gross and net contributions, in constant 1989 prices, are set out in the table. The United Kingdom's contribution to the EC budget is towards the cost of total EC expenditure and not towards any particular element such as agriculture.

  Gross and net payments to the EC budget

  £million1

  Year

  Gross (before receipts and refunds or abatements)

  Net (after receipts and refunds or abatements)

  1973

  909

  512

  1974

  784

  127

  1975

  1,177

  -193

  1976

  1,385

  499

  1977

  1,932

  968

  1978

  3,177

  1,937

  1979

  3,306

  1,949

  1980

  3,044

  1,216

  1981

  3,365

  614

  1982

  4,116

  871

  1983

  4,061

  883

  1984

  4,178

  856

  1985

  4,866

  2,233

  1986

  5,361

  683

  1987

  5,916

  1,957

  1988

  5,484

  1,454

  1989

  5,533

  1,966

  1 Constant prices have been constructed using the GDP deflator at market prices.

  EC Agriculture Spending
  Mr. Allen
  To ask the Chancellor of the Exchequer what percentage of European Community spending was on agriculture in each of the last 10 years.

  Mr. Ryder
  For the years 1980 to 1988 the information requested is given in table 16 of successive reports by the Court of Auditors. In 1989 and 1990, provision for agricultural guarantee expenditure accounted for 59·6 and 56·6 per cent. respectively of the total budget.

  Natural Beauty Products
  Mr. Win Griffiths
  To ask the Chancellor of the Exchequer if he has anything to add to his answer of 16 February,Official Report, column 423, concerning companies forced into receivership by Customs and Excise action, in respect of the Natural Beauty Products Company of Bridgend.

  Mr. Ryder
  The company was not put into receivership by Customs and Excise action. The administrative receiver 14
  appointed by the debenture holder for Natural Beauty Products of Bridgend is trying to sell the company as a going concern.

  Internal Audit
  Mr. Tim Smith
  To ask the Chancellor of the Exchequer what was the subject of the internal audit report that was drawn to the attention of a Minister in his Department in 1989.

  Mr. Norman Lamont
  [holding answer 20 March 1990]: The subject of the audit report concerned trade statistics in respect of diamond imports and exports.

  Balance of Payments
  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer if he will make a statement on the nature of the expenditure and income covered by the £4,727 million deficit dealt with in the page of statistics entitled transfers on the balance of payments figures issued by the Central Statistical Office on 13 March.

  Mr. Norman Lamont
  [holding answer 20 March 1990]: The coverages of the various categories of expenditure and income are explained on page 39 of the 1989 edition of "United Kingdom Balance of Payments", a copy of which is in the Library.

  Hong Kong (Investment)
  Mr. Janman
  To ask the Chancellor of the Exchequer what is the size of British investment in Hong Kong expressed as a percentage of national gross domestic product at factor cost.

  Mr. Norman Lamont
  [holding answer 21 March 1990]: Information is available only on the book value of United Kingdom direct investment in Hong Kong which, at £1,924 million at end-1987, represented 0·5 per cent. of United Kingdom gross domestic product at factor cost (in current prices) in 1987. Direct investment is only one aspect of the United Kingdom's extensive commercial involvement in Hong Kong. The total value of the United Kingdom stake in Hong Kong is likely to be substantially greater than the figure for direct investment alone.

TRANSPORT

  Driving Licences
  Sir Dudley Smith
  To ask the Secretary of State for Transport how many new full driving licences have been issued by the Driver and Vehicle Licensing Centre in each of the last three years, exclusive of heavy goods vehicle licences and public service vehicle licences.

  Mr. Atkins
  The number of new full driving licences issued by the driver and vehicle licensing centre in the last three years, are as follows:

  New licences

  1987

  991,769

  1988

  1,000,611

  1989

  1,004,358

  These figures do not include replacement, duplicate and exchange licences issued to people who have already held a full British driving licence.

  M40 (Gerrards Cross)
  Mr. Tim Smith
  To ask the Secretary of State for Transport what are the current traffic flows, by volume, density and mix, on the M40 at Gerrards Cross.

  Mr. Atkins
  The latest annual average daily traffic flows recorded, for 1988, were:

  Vehicles

  Per cent

  Cars

  63,000

  84

  Buses

  600

  1

  Light Goods Vehicles

  5,400

  7

  Heavy Goods Vehicles

  6,000

  8

  Total

  75,000

  100

  Mr. Tim Smith
  To ask the Secretary of State for Transport what has been the total amount of gross compensation paid under the Land Compensation Act 1973 in connection with the construction of the Gerrards Cross bypass (M40).

  Mr. Atkins
  Payments under part I of the Land Compensation Act 1973 for this length of M40 total £1·259 million.

  Channel Tunnel
  Mr. Vaz
  To ask the Secretary of State for Transport what further representations he has received regarding the Channel tunnel and midland main line railway; and if he will make a statement.

  Mr. Portillo
  I have received a number of representations about the Channel tunnel and the midland mainline. The extent to which this line is used for Channel tunnel rail services is a matter for BR's commercial judgment. It is also for British Rail in the first instance to decide whether it is in its commercial interest to propose electrification of this or any other line. The board's proposals for an international station at King's Cross would provide excellent interchange facilities with inter-city services on the midland mainline.

NORTHERN IRELAND

  Public Expenditure Commentary
  Mr. Knapman
  To ask the Secretary of State for Northern Ireland when he intends to publish the Northern Ireland public expenditure commentary; and if he will make a statement.

  Mr. Cope
  The "Northern Ireland Commentary on Public Expenditure Plans 1990–91 to 1992–93" was published today and copies are available in the Vote Office. This is the third Northern Ireland commentary and it aims to improve the information available to Parliament, and the public, by amplifying the material in the Northern Ireland chapter of the 1990 public expenditure White Paper.

  Higher Education
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland how many students from the Irish Republic are at(a) universities and (b) other higher education establishments in Northern Ireland; and what have been the numbers for each of the last four years.
  16
  Dr. Mawhinney
  [holding answer 20 March 1990]: Provisional information for the 1989–90 academic year is

  (a). at universities—1,478

  (b). at other higher education establishments—24

  Comparable information for each of the last four years is:

  1985–86

  1986–87

  1987–88

  1988–89

  (a) at universities

  436

  613

  931

  1,219

  (b) at other higher education establishments

  14

  16

  14

  20

  New Building Units
  Mr. Nigel Griffiths
  To ask the Secretary of State for Northern Ireland if he will estimate the number of new building units which will be built in 1990–91 in(a) the private sector and (b) the public sector.

  Mr. Peter Bottomley
  [holding answer 20 March 1990]: It is estimated that during 1990–91 building will commence on the following units:

  Units

  (a) The private sector (including housing associations)

  7,000

  (b) The public sector (Northern Ireland Housing Executive)

  1,000

  Salmon
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland how long the dealer licensing scheme for the purchase of Atlantic salmon has been in operation in Northern Ireland.

  Mr. Peter Bottomley
  [holding answer 20 March 1990]: The system, which was first provided for in the Fisheries Act (NI) 1928, has operated in its present form since the introduction of the Fisheries Act (NI) 1966.

  Marine Research
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland whether a cost benefit analysis was carried out by the Department of Agriculture(a) before an undertaking to operate the research vessel Lough Foyle was entered into, (b) before or (c) after a decision was taken to seek funding for the vessel; and what are the benefits which justified the commitment.

  Mr. Peter Bottomley
  [holding answer 20 March 1990]: Yes to (a) and (b).

  The benefits will derive from improved long-term management of exploitable marine stocks with the objective of providing enhanced yields in order to sustain a viable Northern Ireland sea fishing industry. Additional R and D will enhance scientific knowledge of complex interactions in the marine ecosystem and environment.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland how many(a) part-time and (b) short term contract scientific staff have been appointed to new scientific posts created to work on the research vessel Lough Foyle.

  Mr. Peter Bottomley
  [holding answer 20 March 1990]: No part-time or short-term contract scientific staff have

  17
  yet been appointed. A total of 13 non-scientific staff for crewing the vessel are being employed through an agency agreement with the private sector.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland how many permanent staff have been appointed to the new scientific posts created to work on the research vessel Lough Foyle.

  Mr. Peter Bottomley
  [holding answer 20 March 1990]: In 1989–90 one scientist, at grade 6, was appointed. A further 11 permanent and one temporary scientific staff are currently being recruited.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what analysis of the costs of berthing the research vessel Lough Foyle was carried out; whether(a) Coleraine port and (b) Londonderry port were considered and costed; what are the financial benefits per year in favour of Belfast since the vessel came into service; and what are the projections for the next three years.

  Mr. Peter Bottomley
  [holding answer 20 March 1990]: Berthing costs are insignificant in terms of the overall costs of the vessel. The overriding factor is the cost of fuel to reach the target sea areas requiring R and D and monitoring. Londonderry and Coleraine are, therefore, not appropriate ports.

  Mr. William Ross
  To ask the Secretary of State for Northern Ireland whether any estimate has been made of the replacement cost of the research vessel Lough Foyle; and if he will make a statement.

  Mr. Peter Bottomley
  [holding answer 20 March 1990]: Replacement of the vessel has not yet been considered. A review will take place when appropriate taking into consideration policy and scientific needs.

  Freddie Andrews
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what steps have been taken to assess whether Freddie Andrews enjoys the standard of living intended by his father and benefits appropriately from his properties disposed of by the Official Solicitor to John Laing Developments Ltd.

  The Attorney-General
  I have been asked to reply.

  As I said in my most recent reply to the hon. Member for Antrim, East (Mr. Beggs), Official Report, 12 December 1989, columns 548-49, it is not appropriate to publish details of the affairs of any patient without the leave of the court.

  An application may be made to the court by any person concerned about a particular case for disclosure of any information in respect of which the applicant can demonstrate a legitimate interest.

OVERSEAS DEVELOPMENT

  Ethiopia
  Mr. Burns
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the latest position regarding getting relief supplies to those who need them in Ethiopia.

  Mr. Alex Carlile
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether, in the light 18
  of serious famine forecast for April, he has proposals to grant further food aid to Ethiopia; and if he will make a statement.

  Mrs. Chalker
  Following my visit to Ethiopia on 9 and 10 March, I announced a further £8·5 million contribution of food and other emergency aid. Following the effective closure of the port of Massawa to relief operations, it is now unlikely that famine can be wholly averted.

  The agreement on the movement of relief supplies into northern Welo and Tigray along the so-called southern line from the port of Assab was a most welcome development. President Mengistu assured me that the Government would not hinder this operation and the rebel side has also agreed to it.

  The first convoys moved across the lines on 20 and 21 March and reached the distribution centre of Kobo in northern Welo the following day.

  Rain Forests
  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the financial aspects of the agreement with Brazil on rain forest issues, arranged during the visit of the right hon. Member for Bath (Mr. Patten).

  Mrs. Chalker
  Our programme of rain forest and other environmental assistance to Brazil will represent additional aid for that country, financed from the new £100 million for ODA's tropical forestry activities announced by my right hon. Friend the Prime Minister at the United Nations last November.

  The level of assistance for Brazil is not fixed and will depend on the number of projects which can be agreed. The first project agreed under the memorandum of understanding, for climate-related research, is expected to cost some £2·5 million.

  Namibia
  Mr. Atkinson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about how British aid to Namibia is to be spent.

  Mrs. Chalker
  I refer my hon. Friend to my answer to my hon. Friend the Member for Corby on 21 March,Official Report, column 612.

  Namibia
  Mr. Bowis
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) how much bilateral and multilateral aid he has given in the last two years to assist Namibians in English language teaching and training inside and outside Namibia;

  (2) what steps he has taken to assist in the establishment of English as the lingua franca of Namibia;

  (3) whether he is planning to aid the Namibian Academy in its English language teaching projects.

  Mrs. Chalker
  Over the last two years we have provided over £1 million in bilateral aid to assist Namibians in English language teaching and training. Most of this has been for training awards in Britain for Namibian teachers of English and for assistance to exile education institutions including the United Nations Institute for Namibia in Lusaka. It has included the preparation of teaching
  19
  materials in English for use in Namibia's schools. Figures are not readily available for our share of multilateral aid for this purpose.

  Under article three of Namibia's constitution, English is declared the official language of Namibia. We are already financing an English language adviser to the Minister of Education in Windhoek and will provide the course director for the first English language teaching course at the proposed National Institute of Languages. VSO will provide three teachers for this course. A British consultant arrived in Namibia today to advise on Namibia's education system. It is too early to say whether we will provide assistance to English language teaching projects run by the academy; much will depend on the Government's decisions on the academy's future role.

ATTORNEY-GENERAL

  Advertising Expenditure
  Mr. Cohen
  To ask the Attorney-General what was the total publicity and advertising expenditure of his Department and the Lord Chancellor's Department and public bodies for which his Department has responsibility in(a) 1979 and (b)

  The Attorney-General
  No publicity or advertising expenditure was incurred by my Department in 1979. At that time the Crown prosecution service and the Serious Fraud Office did not exist. In 1989–90, expenditure of £36,443 on publicity and £1,217 on advertising was incurred by the Treasury Solicitor's department. In that period, the Crown prosecution service incurred expenditure of £144,466 on publicity and £268,857 on advertising, and the Serious Fraud Office incurred an expenditure of £9,782 on advertising.

  The estimated figures for the Lord Chancellor's Department and for the public bodies for which it has responsibility for 1989–90, excluding staff costs are as follows:

  Publicity £

  Advertising £

  LCD (and Associated Offices)

  39,021

  16,541

  Legal Aid Board

  105,000

  25,000

  The amounts spent for 1979 can be obtained only at disproportionate cost.

  Bophuthatswana
  Mr. Cryer
  To ask the Attorney-General what discussions he has had on the public relations representation in the United Kingdom for Bophuthatswana; and if he will make a statement.

  The Attorney-General
  An allegation made in April 1986 on behalf of the Government of Bophuthatswana that funds had been misappropriated from a bank account belonging to the Bophuthatswana National Commercial Corporation Limited was referred to the metropolitan and
  city fraud squad. Following a police investigation, the Director of the Serious Fraud Office concluded in April 1988 that insufficient evidence was available to justify the institution of proceedings against any person. I had no discussion on the matter but was notified of that decision.

  Land Registry
  Mr. David Porter
  To ask the Attorney-General if he will make it his policy to investigate the feasibility of enabling private tenants of mortgaged property the right to register an interest on the Land Registry.

  The Attorney-General
  In its third report on land registration (Law Commission No. 158) the Law Commission, having extensively reviewed the matter, recommended no change to the existing requirement that only leases for a term exceeding 21 years should be capable of being noted on registered titles. The Government are considering this recommendation together with others listed in the report.

WALES

  Local Government Finance
  Mr. Gwilym Jones
  To ask the Secretary of State for Wales if he will list the community charge for 1990–91 of(a) each district council and (b) each county council in Wales; and if he will show the relationship to the standard spending assessment for each of those councils.

  Mr. Grist
  Local authorities in Wales are in the process of submitting information to the Welsh Office relating to community charges. I shall write to my hon. Friend with the information he has requested when all the returns have been received and checked.

  Mr. Gwilym Jones
  To ask the Secretary of State for Wales if he will provide the rate that would have had to have been levied as the equivalent of the community charge for 1990– 91 of(a) each district council and (b) each county council in Wales; and if he will show the increase each of those rates are over the rates for those same councils for 1989–90.

  Mr. Grist
  I shall write to my hon. Friend and place a copy of my reply in the Library of the House.

  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales what was the total amount collected in business rates(a) in Wales and (b) in each local authority in Wales in 1988–89; what is the amount projected to be collected in 1989–90; and what are the estimates for 1990–91 to 1994–95.

  Mr. Grist
  Estimates of business rate yield by local authority are available centrally only for 1990–91 as shown in the table. Information is not available for 1991–92 to 1994–95.

  Non-domestic rate yield1

  Local authority

  1988–89 £million

  1989–90 £ million

  1990–91 £million

  Alyn and Deeside

  —

  —

  12

  Colwyn

  —

  —

  5

  Delyn

  —

  —

  6

  Glyndwr

  —

  —

  4

  Rhuddlan

  —

  —

  7

  Wrexham Maelor

  —

  —

  17

  Carmarthen

  —

  —

  5

  Ceredigion

  —

  —

  5

  Dinefwr

  —

  —

  2

  Llanelli

  —

  —

  8

  Preseli Pembrokeshire

  —

  —

  8

  South Pembrokeshire

  —

  —

  8

  21

  Local authority

  1988–89 £million

  1989–90 £ million

  1990–91 £million

  Blaenau Gwent

  —

  —

  7

  Islwyn

  —

  —

  5

  Monmouth

  —

  —

  8

  Newport

  —

  —

  27

  Torfaen

  —

  —

  13

  Aberconwy

  —

  —

  6

  Arfon

  —

  —

  6

  Dwyfor

  —

  —

  3

  Meirionnydd

  —

  —

  3

  Ynys Mon

  —

  —

  6

  Cynon Valley

  —

  —

  6

  Merthyr Tydfil

  —

  —

  6

  Ogwr

  —

  —

  15

  Rhondda

  —

  —

  5

  Rhymney Valley

  —

  —

  9

  Taff Ely

  —

  —

  15

  Brecknock

  —

  —

  3

  Montgomeryshire

  —

  —

  5

  Radnor

  —

  —

  2

  Cardiff

  —

  —

  48

  Vale of Glamorgan

  —

  —

  11

  Port Talbot

  —

  —

  17

  Lliw Valley

  —

  —

  6

  Neath

  —

  —

  9

  Swansea

  —

  —

  26

  Central list2

  —

  —

  80

  Government contribution in lieu of rates

  —

  —

  27

  Total Wales

  368

  414

  461

  1 Amount estimated to be collected.

  2 Amount payable by Welsh central list ratepayers.

  Mr. Win Griffiths
  To ask the Secretary of State for Wales what minimum residence period in a financial year has been established by the community charge registration officer for the payment of poll tax in each local authority for people with a residence but who normally work abroad for most of the year.

  Mr. Peter Walker
  A person is subject to a charging authority's personal community charge on a given day if he or she has their sole or main residence in the charging authority's area on that day. The decision as to whether, on any day, a residence constitutes a sole or main residence is a matter for each community charges registration officer (CCRO) to decide on the facts of the individual case. Information about community charges registration officers's decisions is not held centrally.

  Council House Rents
  Mr. Barry Jones
  To ask the Secretary of State for Wales what plans he has to limit council house rents; and if he will make a statement.

  Mr. Grist
  None.

  Improvement Grants
  Mr. Wigley
  To ask the Secretary of State for Wales how many home improvement grants have been given(a) in general and (b) specifically to households in order to replace lead plumbing in each district, borough and city council area for each year since 1985.

  Mr. Grist
  The total number of completed home improvement grants is given in the table. Data on the number of grants specifically given in order to replace lead plumbing is not collected centrally.22

  Number of home improvement grants completed by district, 1985–89

  1985

  1986

  1987

  1988

  1989

  Aberconwy

  204

  155

  134

  212

  179

  Alyn and Deeside

  131

  134

  184

  200

  158

  Arfon

  413

  480

  434

  437

  390

  Blaenau Gwent

  529

  414

  844

  659

  398

  Brecknock

  136

  143

  213

  332

  397

  Cardiff

  2,456

  2,572

  2,847

  2,720

  3,221

  Carmarthen

  358

  518

  450

  428

  402

  Ceredigion

  348

  336

  202

  160

  265

  Colwyn

  58

  310

  166

  257

  310

  Cynon Valley

  271

  549

  1,258

  1,488

  1,098

  Delyn

  150

  179

  233

  193

  165

  Dinefwr

  146

  197

  159

  127

  133

  Dwyfor

  125

  186

  131

  113

  173

  Glyndwr

  170

  130

  151

  174

  187

  Islwyn

  1,109

  1,162

  1,214

  1,464

  1,559

  Llanelli

  398

  324

  545

  471

  1,024

  Lliw Valley

  257

  416

  453

  508

  499

  Meirionnydd

  547

  241

  154

  90

  120

  Merthyr Tydfil

  374

  456

  590

  733

  773

  Monmouth

  223

  362

  207

  454

  158

  Montgomeryshire

  142

  158

  187

  153

  204

  Neath

  284

  506

  683

  661

  419

  Newport

  486

  822

  501

  543

  544

  Ogwr

  859

  855

  808

  924

  965

  Port Talbot (Afan)

  186

  317

  437

  548

  443

  Preseli Pembrokeshire

  232

  335

  372

  377

  524

  Radnorshire

  142

  102

  129

  105

  110

  Rhondda

  1,973

  2,066

  1,405

  1,742

  1,535

  Rhuddlan

  34

  63

  70

  52

  47

  Rhymney Valley

  433

  518

  876

  801

  965

  South Pembrokeshire

  388

  405

  438

  355

  382

  Swansea

  1,974

  1,474

  1,151

  1,130

  1,013

  Taff-Ely

  536

  555

  396

  408

  520

  Torfaen

  327

  373

  381

  437

  274

  Vale of Glamorgan

  328

  460

  369

  400

  372

  Wrexham Maelor

  112

  90

  72

  83

  65

  Ynys Mon

  313

  208

  253

  248

  218

  Wales Total

  17,152

  18,571

  19,097

  20,187

  20,209

  Tap Water
  Mr. Wigley
  To ask the Secretary of State for Wales how many households in each district, borough and city council area in Wales have tap water which is above(a) 100 micrograms of lead per litre concentration and (b) 50 micrograms per litre; and what were the figures for each year from 1985 to 1989.

  Mr. Grist
  This information is not available. However, Dwr Cymru has confirmed that the water that it supplies complies with the lead standard in the EC directive relating to the quality of water for human consumption (80/778/EEC).

  Mr. Wigley
  To ask the Secretary of State for Wales how many tests were carried out on tap water standards in district, borough and city council area in Wales to locate the(a) lead, (b) aluminium, (c) pesticides, (d) nitrates and (e) trihalomenthanes in each year from 1985 to 1989.

  Mr. Grist
  This information is not held centrally and I refer the hon. Gentleman to the chairman of the respective water undertakers and to the environmental health officers of local authorities.

  The Water Supply (Water Quality) Regulations 1989 (SI 1989 No. 1147) contain requirements about the frequency of sampling by water undertakers. So far as local authorities are concerned, sampling frequencies relating to public supplies are a matter for the authorities'

  23
  discretion. Advice on the frequency of sampling by authorities of private supplies is contained in WO circular 51/84.

  Water undertakers are required by regulation 29(1)(f) and 30(1) to maintain a public register of the results of all analyses. Regulation 31 requires that all undertakers prepare and publish an annual report of water quality.

  Mr. Wigley
  To ask the Secretary of State for Wales what are the latest figures for levels of lead in tap water in drinking water at hospitals in Wales.

  Mr. Grist
  Information about levels of lead in tap water in drinking water at hospitals is not collected by the Welsh Office or by district health authorities.

  Almost without exception, hospitals in Wales use water supplied by water undertakers. It is, in the first instance, for the companies themselves to ensure that the water they supply for domestic purposes—including supplies to hospitals—is wholesome. The sampling regime to be followed by the companies is prescribed by the Water Supply (Water Quality) Regulations 1989 (SI 1989, No. 1147).

  Local authorities also are under a duty to monitor public supplies and are required to ensure that private water supplies in their areas are wholesome.

  Oil Spill (Severn)
  Mr. Alex Carlile
  To ask the Secretary of State for Wales (1) what steps have been taken to clean up the oil spilled into the river Severn on 1 March 1990; and if he will make a statement;

  (2) what impact the oil spilled into the river Severn on 1 March 1990 will have on the surrounding environment and wildlife, especially migratory birds returning to Wales for the summer; and if he will make a statement.

  Mr. Grist
  We are advised by the National Rivers Authority that the majority of the oil spilled was contained on site and removed by the company concerned. Inspections of the river Severn have shown only very minor contamination and there were no adverse effects on water quality. There has been some contamination of vegetation on the river banks. The spillage occurred before the return of migratory birds, but the authority has taken steps to minimise any effect on endemic and migratory wildlife.

  Myodil Dye
  Mr. Michael
  To ask the Secretary of State for Wales whether he will undertake a full investigation into the side-effects on patients in Wales resulting from the use of myodil; and if he will make a statement.

  Mr. Grist
  I shall write to the hon. Gentleman and place a copy of my reply in the Library of the House.

DEFENCE

  Air-Sea Rescue
  Mr. Ward
  To ask the Secretary of State for Defence if it is planned to continue the Royal Air Force long-distance air-sea rescue capability when the Nimrod fleet is phased out.

  Mr. Neubert
  Yes.

  Atomic Weapons Establishments
  Mr. Teddy Taylor
  To ask the Secretary of State for Defence what is his policy on visits by hon. Members to atomic weapons establishments; if the normal facilities are provided for such visits to establishments in hon. Members' constituencies or where constituents are employed; and if he will make a statement.

  Mr. Neubert
  All visits to defence establishments, including the atomic weapons establishment, by Members of Parliament are subject to prior approval by Ministers.

  European Fighter Aircraft
  Mr. Rogers
  To ask the Secretary of State for Defence whether there has been any assessment of the economic and industrial implications of a reduction in the declared production of 250 European fighter aircraft.

  Mr. Alan Clark
  No. As I said in my reply to the hon. Gentleman on 15 January 1990 at column 125, there has been no change in the United Kingdom's declared production offtake of 250 aircraft. It is too early to forecast with certainty the eventual size of the United Kingdom purchase of EFA.

DUCHY OF LANCASTER

  Departmental Budget
  Mr. Cohen
  To ask the Chancellor of the Duchy of Lancaster what is the budget of his Department for 1989–90; what are the principal items on which it is spent; and how many staff are employed.

  Mr. Kenneth Baker
  The estimated cost of my private office in the year 1989–90 is £56,342. The principal items of expenditure are salaries for the one and a half staff employed in my office, and provision of a secure Government car service.

HOUSE OF COMMONS

  New Parliamentary Building
  Mr. Hanley
  To ask the Lord President of the Council if the plans for the new parliamentary building in Bridge street include a creche.

  Mr. Meacher
  To ask the Lord President of the Council if he will take urgent steps to establish a workplace nursery in the House of Commons for use by staff working for Members of the House.

  Sir Geoffrey Howe
  Positive resolutions in relation to the principle of providing child care facilities for the children of Members and all staff in the House have already been taken by the Accommodation and Administration Sub-Committee. Hitherto, it had been envisaged that those facilities could be provided only in phase 2 of the new parliamentary buildings or by participating in appropriate schemes set up by Government Departments. Recent developments in analysing the use of accommodation in the House may well, however, provide a fresh opportunity for reconsideration. The House of Commons Commission has therefore invited the Services Committee to look again at this matter.

TRADE AND INDUSTRY

  Audit Policy
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry, further to his reply of 18 January,Official Report, column 355, if he will provide a list of the general issues relating to audit which his Department has referred to the accountancy bodies.

  Mr. Redwood
  The topics raised with the leading accountancy bodies and subsequently publicised in the professional press were:

  (i) accounts not in statutory format

  (ii) unwarranted filing of modified accounts

  (iii) accounts not filed by due date

  (iv) auditors acting as company secretary

  (v) depreciation of fixed assets.

  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry how many auditing partners have been barred from practising as a result of critical reports by his inspectors.

  Mr. Redwood
  It is the responsibility of the professional accountancy bodies and the joint disciplinary scheme (JDS) to investigate complaints and take such action as is appropriate. As far as I am aware, there has been no occasion where criticism of a company's auditors by my Department's inspectors in reports published since June 1979 has led to an audit partner being excluded from membership of a professional accountancy body. However, there have been two instances where accountants who were directors of the companies criticised by inspectors were investigated by JDS and subsequently excluded from membership of their professional body.

  Ferranti (Alleged Fraud)
  Mr. Cohen
  To ask the Secretary of State for Trade and Industry what is the nature of the response of his Department to the alleged fraud at Ferranti; and if he will make a statement.

  Mr. Redwood
  The Serious Fraud Office and the company fraud department of the Metropolitan police are actively investigating allegations of fraud prior to, surrounding and subsequent to the merger of Ferranti plc and International Signal and Control Group plc. They will take action if that is necessary following investigation.

  North East Shipbuilders Ltd.
  Mr. Clay
  To ask the Secretary of State for Trade and Industry (1) if he will indicate to Sir Leon Brittan that Her Majesty's Government have no objection to his discussing the details of the notification by Her Majesty's Government concerning the closure of North East Shipbuilders Ltd with the Member of the European Parliament for Tyne and Wear;

  (2) if he will place in the Library a copy of the formal notification made by Her Majesty's Government to the European Commission regarding the closure of North East Shipbuilders Ltd.

  Mr. Douglas Hogg
  No.

  Mr. Clay
  To ask the Secretary of State for Trade and Industry on which days Her Majesty's Government formally notified the European Commission of their 26
  proposals regarding the closure of North East Shipbuilders Ltd. and related matters; and on which day the European Commission formally notified their acceptance of these proposals.

  Mr. Douglas Hogg
  The Government formally notified to the Commission of the European Community on 9 December 1988 a number of aspects relating to British Shipbuilders, including the proposed terms of sale of a number of subsidiary companies and the payment of closure aid at North East Shipbuilders Ltd. The Commission decided on 21 December not to raise objections to the matters covered by this notification.

  Contracts (Moral Rights)
  Mr. Sedgemore
  To ask the Secretary of State for Trade and Industry if he has any plans to bring forward legislation to amend the Copyright Designs and Patents Act 1988 so as to render unlawful contracts in which a writer has to waive his or her moral rights.

  Mr. Douglas Hogg
  I have no such plans, since I believe that it is important to preserve freedom of contract in dealings involving copyright.

  Domestic Fixed Capital Expenditure
  Mr. Gregory
  To ask the Secretary of State for Trade and Industry what was the total domestic fixed capital expenditure in the Yorkshire and Humberside region for 1979, 1983, 1987 and the most recent year; and if he will make a statement.

  Mr. Ryder
  I have been asked to reply.

  Figures representing the total investment in Yorkshire and Humberside are not available. Estimates are made, however, of gross domestic fixed capital formation by general government and by selected industries. These estimates represent the expenditure on fixed assets, that is, on replacement or addition to the stock of fixed assets and so exclude expenditure on maintenance and repairs. Figures for Government expenditure are £346 million in 1979, £465 million in 1983 and £606 million in 1987. Figures for industry expenditure in these three years are respectively £1,981 million, £2,385 million and £3,288 million (1987 is the latest year for which estimates have been made). The industries covered are agriculture, forestry, fishing, energy, water supply, manufacturing, transport and communications excluding air and sea transport and dwellings. Estimates are not available for the service industries. There is some overlap between the general government and industry figures since they both cover dwellings.

  Cot Mattresses (Chemical Hazard)
  Mr. Nigel Griffiths
  To ask the Secretary of State for Trade and Industry when his Department first knew of biochemist Barry Richardson's work on the possible dangers of young babies from chemicals used in fire resistant mattresses and any link with cot death syndrome.

  Mrs. Virginia Bottomley
  [holding answer 12 March 1990]: I have been asked to reply.

  Mr. Richardson's work was first drawn to our attention by Mr. Mitchell in January 1989. In April 1989 we received further details of the hypothesis that fungal action on

  27
  mattresses emitted toxic gases which were a possible explanation for sudden infant deaths. The laboratory of the Government Chemist was then asked to conduct a scientific assessment of the hypothesis. I understand that it has not, as yet, been able to confirm Mr. Richardson's findings. Its results are being referred to the group of experts which, as the hon. Member will know, the chief medical officer has invited to assess Mr. Richardson's work.

FOREIGN AND COMMONWEALTH AFFAIRS

  Angola
  Mr. Riddick
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he has taken to support President Mobutu's work as mediator in the continuing Angolan civil war between UNITA and the MPLA.

  Mr. Waldegrave
  The breakdown of the ceasefire arranged by President Mobutu in June 1989 has frustrated his mediation efforts. We have urged both sides to renew the ceasefire and enter into negotiations on a political settlement.

  Cyprus
  Mr. Hanley
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has as to the demographic mix of the population of Northern Cyprus as between Turkish settlers and indigenous Turkish Cypriots.

  Mr. Maude
  Turkish Cypriot statistics show a total population in 1989 of 169,272. This figure is not broken down. Estimates for Turkish settlers tend to be in the range of 40,000 to 45,000, although higher figures have been quoted.

  Libya
  Mr. Janman
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will seek information from the German Democratic Republic Government on their future intentions relating to technical support for the Libyan military.

  Mr. Waldegrave
  Our policy remains clear. We have no military links with Libya.

  We look forward to discussions with representatives of the new GDR Government when it is formed.

  Mr. Janman
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has on the current situation in Libya; and if he will make a statement.

  Mr. Waldegrave
  Our information on Libya has been limited since diplomatic relations were broken in 1984. I shall be glad to write to my hon. Friend if he has a particular matter in mind.

  Mr. Janman
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking through the United Nations and the European Economic Community to encourage the German Democratic Republic Government to cease all technical support for the Libyan military.
  28
  Mr. Waldegrave
  Our policy remains clear. We have no military links with Libya. In 1986 the European Community agreed measures against Libya which included an arms embargo. This is still in force.

  We look forward to discussions with representatives of the new GDR Government when it is formed.

  Know-How Fund
  Mr. Ward
  To ask the Secretary of State for Foreign and Commonwealth Affairs which countries are now receiving help from the know-how fund; and if it is to be extended further in the near future.

  Mr. Waldegrave
  My right hon. Friend the Prime Minister announced during President Havel's visit last week that the know-how fund is being extended to Czecholosvakia. Poland and Hungary are already beneficiaries and we have said other countries will qualify once they are fully committed to political and economic reform.

  Namibia
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs if, during his recent visit to Namibia, he discussed with Ministers or officers of the new Government (i) the possibility of Namibia joining the nuclear non-proliferation treaty, (ii) the provision of unsafeguarded uranium for the United Kingdom stockpile and (iii) the continued provision of mineral resources to the United Kingdom from Namibian sources.

  Mr. Waldegrave
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs discussed the possibility of Namibia joining the nuclear non-proliferation treaty with President Nujoma; he did not discuss the other two subjects mentioned in the question.

  South Africa
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs if, during his recent visit to South Africa, he raised with Ministers or officials of the Government of the Republic of the prospects of South Africa joining the nuclear non-proliferation treaty.

  Mr. Waldegrave
  This subject was touched on briefly in the discussions that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs had with the South African Administration.

  EC-ACP Meeting
  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the agenda of the EC-ACP meeting in Fiji on 28 and 29 March.

  Mr. Maude
  The ACP-EC Council of Ministers meeting in Fiji on 28 and 29 March will discuss:The state of implementation of the third Lomé convention.
  Transitional measures between the third and fourth Lomé conventions.
  Trade and customs co-operation.
  Commodities.
  Stabex (assistance for loss of export earnings from certain agricultural products).
  Sysmin (assistance for loss of export earnings from certain minerals).
  Sugar.

  29
  Development finance co-operation.
  Industrial Co-operation.
  Agricultural co-operation.
  Treatment of ACP nationals in EEC member states.
  The ACP-EC joint assembly.
  Southern Africa.
  The single European Market.
  Developments in Eastern Europe and their implications for ACP-EC co-operation.
  ACP states' indebtedness.

  Council of Europe
  Sir Geoffrey Finsberg
  To ask the Secretary of State for Foreign and Commonwealth Affairs what decisions were taken at the enlarged meeting of the Foreign Ministers of the Council of Europe in Lisbon on 23 and 24 March; and if he will make a statement.

  Mr. Maude
  A special session of the committee of Ministers of the Council of Europe in Lisbon on 23 and 24 March discussed the Council's relations with central and eastern Europe. The United Kingdom was represented by my right hon. Friend the Minister of State, Foreign and Commonwealth Office. The conclusions of the meeting were wide ranging: a copy of a summary from the committee's chairman, the Foreign Minister of Portugal, has been placed in the Library. We will of course participate fully in the follow-up envisaged by the chairman's summary.

  Cambodia
  Mr. Lester
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on British Government policy towards Cambodia.

  Mr. Hurd
  Since my written reply to the question from my hon. Friend on 8 November 1989, we have continued to work for a sovereign and independent Cambodia whose people are able to live in safety and prosperity and free to decide their own future. Our abhorrence of the Khmer Rouge remains absolute, and we are doing what we can to prevent Pol Pot and his friends from returning to power.

  We are making good progress in building up our humanitarian aid programme, which is designed to help both Cambodians in Cambodia and those who have taken refuge in camps along the Thai border. In December 1989, two British officials visited Cambodia to examine at first hand the scope for British aid. Following this, we pledged an additional £1 million to multilateral agencies for their programmes inside Cambodia. We are also supporting eight projects inside Cambodia sponsored by non-governmental organisations, with a total commitment of £224,000, and are considering six new applications with a total value of £500,000.

  In addition to this important humanitarian effort, we are actively working for a peaceful, comprehensive political settlement in Cambodia. We welcomed the proposal by the Australian Foreign Minister for a special role for the United Nations. A series of meetings of the five permanent members of the United Nations Security Council has agreed the principles which should underlie a settlement. These include an enhanced role for the United Nations, the modalities of a peace-keeping effort in Cambodia, and the administrative structure during the interim period of United Nations involvement. The informal meeting on Cambodia in Jakarta on 26 to 28
  30
  February achieved some further progress on United Nations involvement, although it also demonstrated the important remaining differences between the parties.

  I have discussed Cambodia with other Foreign Ministers, including those of the United States, France and Italy. I also had a meeting with the United Nations Secretary General in New York in February. Foreign Ministers of the 12 member states of the European Community issued a statement on Cambodia on 20 February, and Cambodia figured prominently in the discussions and joint declaration of the EC-ASEAN ministerial meeting in Malaysia in February.

EDUCATION AND SCIENCE

  Teachers' Negotiating Rights
  Mr. Flannery
  To ask the Secretary of State for Education and Science when the International Labour Organisation indicated that it was satisfied with what he was currently doing about the restoration of teachers' negotiating rights, as he stated before the Select Committee on Education, Science and the Arts, on 28 November 1989 (HC 32-i, page 3).

  Mrs. Rumbold
  The position is that the ILO is aware of the steps the Government are taking to put in place new and lasting pay determination machinery and has not asked us to proceed on any other timetable.

  Education Expenditure
  Mr. Sillars
  To ask the Secretary of State for Education and Science (1) if he will list those years in the period 1974 to 1989 when financial cuts in real terms were made in public expenditure on education in England and Wales;

  (2) if he will list those years in the period 1974 to 1989 when financial cuts in real terms were made in public expenditure on education in England and Wales.

  Mrs. Rumbold
  Public expenditure on education in England and Wales fell in real terms (as measured by the GDP deflator) in the following financial years in the period referred to:

  1974–75; 1978–79; 1979–80; 1981–82; 1984–85; 1985–86.

  Universities Funding Council
  Mr. Straw
  To ask the Secretary of State for Education and Science how many of his Department's staff and at what grades have been seconded to work for the Universities Funding Council.

  Mr. MacGregor
  There are 58 staff on secondment to the Universities Funding Council in the following grades:

  Staff

  Grade 3

  1

  Grade 5

  1

  Grade 6

  1

  Grade 7

  6

  HEO

  13

  EO

  10

  AO

  10

  AA

  2

  Secretaries

  5

  Typing manager

  1

  Typists

  4

  Support staff

  4

  TOTAL

  58

  31
  Mr. Straw
  To ask the Secretary of State for Education and Science how many staff, at what grades, and what proportion of the total, have resigned or are intending to resign from the employment of the Universities Funding Council in consequence of(a) its move to Bristol and (b) for other reasons.

  Mr. MacGregor
  None. All staff directly employed by the council are prepared to move to Bristol. Those on secondment at EO level and above who will be under age 57 at the time of relocation will be asked whether they wish to become employees of the council and move to Bristol. All staff aged 57 and over and those at AO level and below will return to their employers.

  Teacher Training (Bursaries)
  Mr. Straw
  To ask the Secretary of State for Education and Science if, in respect of initial teacher training in subjects for which bursaries have been made available, he will list for each subject and each year for which a bursary scheme has operated, the number of applicants, the number of acceptances, the target for the subject, the amount of bursary and its total cost, and the proportion of students accepted for each course who completed their qualification, and the proportion who obtained employment in a maintained school, with aggregate totals for each year.

  Mr. MacGregor
  An evaluation commissioned from Bath university showed that in 1988, 83 per cent. of bursary holders went on to teach in maintained secondary schools, a higher proportion than the generality of ITT students. This finding is corroborated by evidence from a DES survey of bursary holders. It is not possible to disaggregate bursary holders from the total of students completing initial teacher training qualifications.

  Table 1 shows the number of applications, recruitment targets, recruitment figures and total expenditure by subject and year.

  Table 2 shows the amount of bursary by subject and year.

  Table 1

  Initial teacher training in the shortage subjects 1986 to 1990

  For entry in year

  Applications

  Recruitment

  Targets

  Total cost £

  Mathematics

  1986–87

  1,299

  901

  1,275

  541,000

  1987–88

  1,801

  1,194

  1,383

  1,287,000

  1988–89

  1,594

  1,143

  1,572

  1,489,000

  1989–90

  1,809

  1,139

  1,549

  1,483,000

  CDT

  1986–87

  643

  551

  756

  441,000

  1987–88

  1,044

  743

  867

  944,000

  1988–89

  976

  764

  978

  1,114,000

  1989–90

  1,554

  775

  1,020

  1,155,000

  Physics

  1986–87

  594

  365

  522

  219,000

  1987–88

  962

  545

  552

  560,000

  1988–89

  823

  456

  595

  637,000

  1989–90

  748

  322

  611

  506,000

  Chemistry

  1989–90

  675

  400

  584

  380,000

  Since its institution, the bursary and the subjects covered have developed as follows:
  32

  Table 2

  Subjects eligible

  Year

  Level £

  Maths, Physics, CDT

  1986

  1,200

  Maths, Physics, CDT, Technology

  1987

  1,250

  Maths, Physics, CDT, Technology

  1988

  11,300

  Maths, Physics, CDT, Technology Chemistry

  1989

  11,300

  1 + £200 CDT Equipment.

  "Technology" was added on legal advice so as to include courses entitled "Technology" which prepare students to teach other bursary subjects up to GCSE standard.

  Mr. Straw
  To ask the Secretary of State for Education and Science what measures he has taken to monitor the effectiveness of the bursary schemes to attract student teachers to train in shortage subjects and to enter employment in the maintained sector; and what are the conclusions of such measures.

  Mr. MacGregor
  Research commissioned by my Department from the University of Bath school of education concluded that the bursary scheme had made an important contribution to attracting good quality students into shortage subject courses. At the time of the survey 83 per cent. of bursary holders had gone on to teach in maintained secondary schools, a higher proportion than the generality of newly trained teachers, Others were teaching in the independent sector or working in other posts connected with education. An increasing proportion of students had said that they could not have taken the course without a bursary, which helps to demonstrate the value of the scheme in attracting mature entrants to teaching.

  Assisted Places
  Mr. Straw
  To ask the Secretary of State for Education and Science what is the average tuition fee charged by schools within the assisted places scheme.

  Mr. MacGregor
  The average tuition fee charged by schools in England within the assisted places scheme in academic year 1988–89, the latest year for which final figures are available, was £2,591.

  Mr. Straw
  To ask the Secretary of State for Education and Science what is the estimated total expenditure on assisted places in 1990–91, and in respect of how many pupils.

  Mr. MacGregor
  It is estimated that total expenditure on assisted places in England in the financial year 1990–91 will be £61,926,000. Thirty three thousand, two hundred and eighty eight assisted places will be available in England in the academic year 1990–91.

  Mr. Straw
  To ask the Secretary of State for Education and Science which school within the assisted places scheme charges the highest tuition fees; and what is the amount of that fee.

  Mr. MacGregor
  Charterhouse school, Godalming, where the academic year 1989–90 annual tuition fee is £6,975.

  Pre-primary Education
  Mr. Bowis
  To ask the Secretary of State for Education and Science what is the estimate of the number of children currently receiving nursery and other forms of pre-primary education.

  Mrs. Rumbold
  A total of 548,000 under-fives were attending maintained nursery and primary schools in England in January 1989. This was an increase of 15,000 over the previous year and an increase of 119,000 since 1980. During the decade the age participation rate increased from 39 to 45 per cent. A further 42,000 (3 per cent. of the age group) were attending nursery units in independent schools. The Department does not collect information on other forms of pre-primary education.

  School Closures
  Mr. Straw
  To ask the Secretary of State for Education and Science if he will update the table in the answer to the hon. Member for Blackburn, of 29 June 1989,Official Report, columns 535-36, on school closures, to give information for the calendar year 1989, and the latest information available for 1990.

  Mr. MacGregor
  The information is in the following updated table:

  Calendar year

  Number of Proposals decided

  Number of Places to be taken out of use by Proposals in column 2

  Number of Proposals in column 2 approved

  Number of surplus places to be taken out of use as a result of approved proposals

  (1)

  (2)

  (3)

  (4)

  (5)

  1983

  366

  104,174

  330

  85,606

  1984

  292

  85,862

  270

  77,590

  1985

  205

  101,097

  185

  88,218

  1986

  172

  81,663

  147

  62,828

  1987

  159

  55,116

  134

  45,326

  1988

  145

  64,256

  116

  27,170

  1989

  140

  59,527

  114

  41,831

  11990

  12

  2,467

  7

  2,380

  1 1 January to 28 February 1990.

  Further Education (Liverpool)
  Mr. Wareing
  To ask the Secretary of State for Education and Science when he last met the assistant director for further education in Liverpool; what subjects were discussed; and if he will make a statement.
  34
  Mr. Jackson
  Officials of the Department met the senior assistant director (further education) of Liverpool local authority, together with the assistant city solicitor, on 21 March. His purpose in requesting the meeting was, in accordance with a resolution of Liverpool city council, to advise the Department of the council's decision to recommend to its education committee that the management of its further education provision be restructured by 1 April 1991 to a single college model on various sites throughout the city.

  Student Loans
  Mr. Pawsey
  To ask the Secretary of State for Education and Science if he will make a statement on the repayment terms of top-up for students on longer courses.

  Mr. MacGregor
  I am now able to announce that the Government intend that the repayment period for students on courses that are longer than four years should be initially seven years. The standard repayment period for other students will be initially five years. This will ensure that repayments are manageable for students on courses longer than four years, who will build up larger liabilities during their courses. As the scheme develops and loans increase in real terms the standard repayment period will be extended: the repayment period for those on longer courses will similarly be extended.

  Access Funds
  Mr. Pawsey
  To ask the Secretary of State for Education and Science whether he will review the provision for access funds; and if he will make a statement.

  Mr. MacGregor
  I am now able to announce that following parliamentary discussion during the various stages of the Education (Student Loans) Bill in both Houses, the Government have decided to increase to £20 million the access funds available for higher education. This will give the higher education institutions greater scope for extending discretionary assistance on a flexible basis to their students, notably those facing relatively high accommodation.

  The necessary supplementary estimates approval for the additional expenditure of £10 million in 1990–91 will be sought in due course.

  Pensions
  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science (1) what is the average pension paid to head teachers who retired in 1989; and what was the average pension received by head teachers who retired in(a) 1979 and (b) 1969;

  (2) what is the value at current prices of the average pension received by lecturers in higher education on their retirement in (a) 1979 and (b) 1969;

  (3) what is the value at current prices of the average pension received by lecturers in further education on their retirement in (a) 1979 and (b) 1969;

  (4) what is the value at current prices of the average pension received by teachers on their retirement in (a) 1979 and (b) 1969;

  (5) what is the value at current prices of the average pension received by head teachers on their retirement in (a) 1979 and (b) 1969;

  (6) what was the average pension paid for lecturers in higher education who retired in 1989; and what is the average pension currently received by lecturers in higher education in (a) 1979 and (b) 1969;

  (7) what was the average pension paid to lecturers in further education who retired in 1989; and what is the average pension received by lecturers in further education who retired in (a) 1979 and (b) 1969;

  (8) what was the average pension paid to teachers who retired in 1989; and what is the average pension currently received by teachers who retired in (a) 1979 and (b)

  Mr. Alan Howarth
  [holding answer 20 March 1990]: Information in respect of 1989 is being assembled and will be made available shortly; information relating to lecturers in higher education and further education is only held as a combined total. Figures for 1969 and 1979 are as follows:

  Average pension at time of payment

  1969 £

  1979 £

  Teachers

  695

  2,270

  Head teachers

  1,080

  3,560

  Lecturers

  985

  2,770

  Average pension at current values

  19691 £

  19791 £

  Teachers

  4,450

  4,380

  Head teachers

  6,910

  6,860

  Lecturers

  6,300

  5,340

  1 Retirement.

  In 1969, teachers generally required 30 years service before being eligible for a pension; the average length of service on which pensions were based in 1969 was 33 years. The present qualifying period for a pension is two years and the average length of service on which pensions are currently based is 26 years.

SCOTLAND

  Footpaths and Bridleways
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Scotland if he will list, for each of the years 1985, 1986, 1987, 1988 and 1989, the number of temporary traffic regulation orders made by local authorities under section 14 of the Road Traffic Regulation Act 1984 to restrict or prohibit the use of footpaths or bridleways for which he gave consent under section 15(2) of that Act for an extension of the period for which the order was in force.

  Lord James Douglas-Hamilton
  Temporary traffic orders affecting footpaths and bridleways are not separately identified from those affecting road traffic and the information could be supplied only at disproportionate cost.

  Cash Limits
  Mr. Bill Walker
  To ask the Secretary of State for Scotland if he proposes to make further changes to the cash limits for 1989–90 within his responsibility.

  Mr. Rifkind
  Yes. I intend to make changes to four of the cash limits within my responsibility.

  As a result of savings on various grant schemes the cash limit for class XVI, vote 2, agriculture services and fisheries, Scotland, will be decreased by £1,000,000 from £80,024,000 to £79,024,000.

  The cash limit on class XVI, vote 3, regional and general industrial support, Scotland will be reduced by £750,000 from £144,249,000 to £143,499,000. This reflects a reduction to the Scottish Development Agency's grant in aid associated with additional receipts arising from property sales by the agency.

  The cash limit on class XVI, vote 6, roads, transport and environmental services, Scotland, will be decreased by £1,500,000 from £212,942,000 to £211,442,000 as a result of savings on trunk road maintenance expenditure.

  The non-voted cash limit SO/LA2, which covers housing capital expenditure by local authorities and new towns, will be reduced by £3,037,000 from £344,286,000 to £ 341,249,000 reflecting savings on expenditure by the new towns.

  Training Schemes
  Mr. Wallace
  To ask the Secretary of State for Scotland if he will list private companies involved with provision of youth training schemes and employment training in Scotland by regional area; and how expenditure of public money by them is monitored.

  Mr. Lang
  [holding answer 7 March 1990]: Financial checks on all training providers in YTS and employment training are carried out by the Training Agency's professional accountant in Scotland.

  All organisations operating YTS must have approved training organisation status, and all organisations operating employment training must achieve approved training organisation status by 5 September 1990 or two years after the start of their contract. One of the criteria for this is financial viability. Organisations must demonstrate that they have the financial resources to fulfil their contracted obligations, operate effective financial systems and controls and maintain up-to-date and accurate administrative records.
  37
  It is not possible to provide a comprehensive list of private companies involved with the provision of the youth training scheme and employment training in Scotland.

  Birds of Prey
  Mr. Tony Banks
  To ask the Secretary of State for Scotland what was the number, species and cause of death of birds of prey discovered in each of the last three years.

  Species

  Poisoned

  Shot

  Trauma

  Disease

  Starvation

  Unknown

  Total

  1987

  Barn Owl

  —

  —

  1

  —

  —

  2

  3

  Buzzard

  9

  —

  5

  2

  —

  2

  18

  Golden Eagle

  1

  —

  —

  —

  —

  3

  4

  Kestrel

  —

  —

  —

  —

  —

  1

  1

  Osprey

  —

  —

  —

  —

  —

  1

  1

  Sparrowhawk

  —

  —

  5

  —

  —

  2

  7

  Tawny Owl

  —

  —

  —

  —

  —

  3

  3

  Total

  10

  —

  11

  2

  —

  14

  37

  1988

  Barn Owl

  —

  —

  1

  —

  —

  2

  3

  Buzzard

  7

  1

  6

  1

  —

  1

  16

  Golden Eagle

  4

  1

  1

  —

  —

  2

  8

  Hen Harrier

  1

  —

  1

  —

  —

  —

  2

  Kestrel

  —

  —

  2

  2

  —

  —

  4

  Merlin

  —

  —

  —

  1

  —

  —

  1

  Short Eared Owl

  —

  —

  1

  —

  —

  —

  1

  Sparrowhawk

  —

  —

  4

  —

  —

  1

  5

  Tawny Owl

  2

  —

  2

  —

  —

  —

  4

  Total

  14

  2

  18

  4

  —

  6

  44

  1989

  Barn Owl

  —

  —

  4

  —

  —

  2

  6

  Buzzard

  11

  1

  2

  1

  1

  9

  25

  Golden Eagle

  1

  1

  2

  —

  —

  2

  6

  Hen Harrier

  —

  1

  —

  —

  —

  —

  1

  Kestrel

  —

  —

  3

  1

  —

  2

  6

  Merlin

  —

  1

  1

  —

  —

  —

  2

  Osprey

  —

  —

  —

  —

  —

  2

  2

  Peregrine

  3

  2

  1

  —

  —

  3

  9

  Red Kite

  1

  —

  —

  —

  —

  —

  1

  Sparrowhawk

  12

  —

  3

  3

  —

  2

  10

  Tawny Owl

  —

  —

  2

  —

  —

  1

  3

  Total

  18

  6

  18

  5

  1

  23

  71

  1 Pesticide poisonings, not deliberate abuse.

  Speech Therapists
  Mrs. Fyfe
  To ask the Secretary of State for Scotland what is his policy on cover for maternity leave taken by speech therapists; and what is the average waiting time for children with speech difficulties in the Greater Glasgow health board area.

  Mr. Michael Forsyth
  [holding answer 19 March 1990]: The information requested is not available.

  Hospitals (Self-governing Status)
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland if he will list in the Official Report those hospitals which have declared an interest in applying for self-governing status.

  Mr. Michael Forsyth
  [holding answer 20 March 1990]: Expressions of interest have been made public by the hospitals at Forfar, the Royal Scottish National hospital
  38
  Lord James Douglas-Hamilton
  [holding answer 12 March 1990]: The information obtained through the wildlife incident investigation scheme of the Department of Agriculture and Fisheries for Scotland on numbers of birds of prey discovered dead is set out in the table. I understand that the Royal Society for the Protection of Birds also keeps records, but these cannot be compared directly because they are compiled on a different basis. The RSPB totals for the relevant years were 37, 25 and 38.

  at Larbert and the unit at the Foresterhill site in Aberdeen comprising the royal infirmary, maternity hospital and children's hospital.

  Prime Minister's Visit (Security)
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland what was the total cost to public funds of providing security during the visit to Scotland of the Prime Minister on 8, 9 and 10 March.

  Lord James Douglas-Hamilton
  [holding answer 20 March 1990]: The level of security required to protect the Prime Minister, or any other public figure, is an operational matter for the chief constable concerned and it is not the practice to give information of the kind requested.

HEALTH

  Residential Homes, Easington
  Mr. Cummings
  To ask the Secretary of State for Health if he will list by name and address the nursing and residential homes in the Easington constituency and the cost per patient per home borne by the Department of Social Security.

  Mr. Freeman
  Information about nursing homes and residential are homes is not collected centrally in this form. Details of nursing homes and residential care homes registered under the Registered Homes Act 1984 are kept by district health authorities and local social services authorities respectively. Benefit levels and the payments made to individual residents are matters for my right hon. Friend the Secretary of State for Social Security.

  Care in the Community
  Mr. Cummings
  To ask the Secretary of State for Health what extra resources are to be made available to statutory authorities to provide care in the community within the Easington constituency.

  Mrs. Virginia Bottomley
  New burdens on local authorities as a result of the community care policy will be taken into account when determining their grant entitlement for 1991–92. The extra resources will be distributed to individual authorities through the standard spending assessment for personal social services. The formula is being reconsidered in the light of the new policies and discussions with local authorities. Final decisions on resource issues will be taken in the course of the current public expenditure discussions.

  Additional resources for health care from April 1991, including care in the community, will also be considered as

  1984–85

  1985–86

  1986–87

  1987–88

  1988–89

  £million

  £million

  £million

  £million

  £million

  Cash

  640·4

  660·0

  741·7

  819·6

  949·7

  At 1989–90 prices1

  838·6

  820·3

  891·6

  935·1

  1,011·4

  1 Revalued to 1989–90 prices using the gross domestic product deflator.

  Mr. Sean Hughes
  To ask the Secretary of State for Health what proportion of the costs of the general dental care service came from patients' charges in the period of the last five years.

  Mr. Freeman
  The proportion of the gross costs of the general dental services in England recovered from patients' charges in the last five complete financial years is given in the table.

  Per cent.

  1984–85

  27

  1985–86

  30

  1986–87

  30

  1987–88

  29

  1988–89

  31

  Self-governing Hospitals
  Mr. Tom Arnold
  To ask the Secretary of State for Health if he will list the hospitals applying for self-governing status within the north-west region.
  40
  part of the current public expenditure survey. It is for the health authorities to decide on levels of expenditure in each part of their programme having regard to local plans and circumstances.

  Dental Service
  Mr. Sean Hughes
  To ask the Secretary of State for Health what estimated proportion of the costs of the general dental service will come from patients' charges assuming that continuing care payments are in place under the proposed new dental contract.

  Mr. Freeman
  The 1990–91 estimates laid before Parliament show income from patient charges for general dental services in England as £388 million—38 per cent. of the estimated cost.

  Mr. Sean Hughes
  To ask the Secretary of State for Health what is the total cost of the general dental service in the United Kingdom in terms of both current and constant prices over the last five financial years; and what are the best estimates for the costs of the service at current prices in 1989–90 and 1990–91.

  Mr. Freeman
  The gross cost of the general dental services in England in cash and at 1989–90 prices over the last five complete financial years is given in the table. The estimated outturn for 1989–90 is £970 million. The estimated gross cost of the general dental service in England in 1990–91, as shown in the main estimates, is £1,019·4 million. Information on the general dental services in Wales, Scotland and Northern Ireland is a matter for my right hon. Friends the Secretaries of State for Wales and for Northern Ireland and my right hon. and learned Friend the Secretary of State for Scotland.

  Mrs. Virginia Bottomley
  Formal applications for NHS trust status will not be made until Parliament has given approval to the necessary legislation. Only at this stage will units decide whether or not to submit a firm application. However, the following units in the North Western regional health authority have expressed an interest in trust status:

  Christie hospital

  Central Manchester hospital and community services

  Royal Preston hospital

  South Manchester health authority community unit

  Stepping Hill hospital and Stockport infirmary

  Wrightington hospital

  Hampshire Constituencies
  Sir David Price
  To ask the Secretary of State for Health if he will list in the Official Report the size of the electorate of each parliamentary constituency in Hampshire and the extent to which each such constituency differs from the electoral quota for England, expressed both in numbers and in percentage.

  Mr. Freeman
  The information requested is given in the table.
  41

  Parliamentary constituency

  Electors on 1990 register

  1989 register

  Electors

  Above electoral quota by

  Number

  Per cent.

  Aldershot

  83,356

  82,750

  13,217

  19·0

  Basingstoke

  83,111

  81,557

  12,024

  17·3

  East Hampshire

  91,512

  91,737

  22,204

  31·9

  Eastleigh

  91,259

  90,119

  20,586

  29·6

  Fareham

  81,399

  80,864

  11,331

  16·3

  Gosport

  70,903

  70,478

  945

  1·4

  Havant

  77,158

  77,426

  7,893

  11·4

  New Forest

  76,278

  76,647

  7,114

  10·2

  North West Hampshire

  72,637

  72,156

  2,623

  3·8

  Portsmouth North

  81,523

  81,453

  11,920

  17·1

  Portsmouth South

  77,127

  76,521

  6,988

  10·0

  Romsey and Waterside

  83,302

  82,910

  13,377

  19·2

  Southampton, Itchen

  73,223

  72,658

  3,125

  4·5

  Southampton, Test

  74,703

  74,334

  4,801

  6·9

  Winchester

  79,226

  79,373

  9,840

  14·2

  Note: The 1989 electoral quota for England was 69,533. The 1990 quota cannot be calculated until the electorates for all constituencies in England are available centrally in about two months time.

  Infant Mortality (Greenwich)
  Ms. Richardson
  To ask the Secretary of State for Health what targets Greenwich health authority has set to reduce its infant mortality rate; and what level of resources have been allocated to this task.

  Mr. Freeman
  This information is not held centrally but the hon. Member may wish to write to the chairman of Greenwich health authority for the details she seeks.

  Health Authority Chairmen
  Mr. McWilliam
  To ask the Secretary of State for Health if he will list the chairmen of regional and district health authorities in England and Wales by authority, indicating (i) their age if over 60 years, (ii) their political affiliation if known and (iii) whether or not they are resident in the area covered by the health authority.

  Mrs. Virginia Bottomley
  Health authority chairmen's appointments in England as at 1 April 1990 are listed in the tables which have been placed in the Library. Eight regional chairmen and 88 district chairmen are aged over 60 years. Dates of birth of individual chairmen are held in confidence. We do not seek details of their political affiliations. Chairmen who are resident within the district they serve are marked with an "R" in the tables. Those who do not live within their region or district usually have some other connection with it, for example they work or have a second home there.

  Speech Therapists
  Mr. Ashley
  To ask the Secretary of State for Health by how much the average salary of a speech therapist has increased since 1979 in real and percentage terms and what has been the percentage increases in(a) average doctor's pay, (b) average nurse's pay, (c) the salary of skilled workers and (d) the cost of living.

  Mrs. Virginia Bottomley
  Between 1979–80 and 1988–89 (1 August—31 July) settlements for doctors and dentists were worth 149·5 per cent., nurses 184·8 per cent., speech 42
  therapists 138·7 per cent. and the retail prices index rose by 98·9 per cent. The real-terms increase over this period for speech therapists was 20 per cent. Information is not readily available about overall pay on a comparable basis and there is no precise category of skilled workers.

  Mr. Ashley
  To ask the Secretary of State for Health how many people have started training in speech therapy in each of the last 10 years.

  Mrs. Virginia Bottomley
  Information is not collected centrally on the numbers entering speech therapy training. I understand from information supplied by the College of Speech Therapists that the total number of people starting training in speech therapy at the 16 training establishments in the United Kingdom for the years 1982 to 1988 was as follows:

  Number

  1982

  380

  1983

  374

  1984

  395

  1985

  376

  1986

  389

  1987

  394

  1988

  409

  Figures for earlier years are not available. The provisional figure for 1989 is 450.

  Mr. Ashley
  To ask the Secretary of State for Health how many schools for the deaf have a speech therapist provided by the health authority; and how many schools requiring one have not had their needs met by the health authority.

  Mr. Freeman
  The information is not available centrally. It is for individual health authorities to determine the speech therapy services that can be made available to hearing impaired children, in the light of local circumstances, their assessment of priorities, and the available resources.

  Mr. Ashley
  To ask the Secretary of State for Health how many speech therapists are estimated to have permanently left the profession in each of the last 10 years.

  Mrs. Virginia Bottomley
  This information is not available in the form requested.

  Mr. Ashley
  To ask the Secretary of State for Health how many speech therapists have been employed in the National Health Service in each of the last 10 years.

  Mrs. Virginia Bottomley
  The information is as follows:

  NHS qualified speech therapists at 30 September each year—England

  Years

  Whole-time equivalent

  1979

  1,510

  1980

  1,650

  1981

  1,750

  1982

  1,900

  1983

  1,970

  1984

  2,150

  1985

  2,340

  1986

  2,510

  1987

  2,630

  1988

  2,730

  Source: Department of Health (SMI3) annual census of NHS non-medical manpower.

  Note: All figures are independently rounded to the nearest ten (10) whole-time equivalents.
  43
  Mr. Ashley
  To ask the Secretary of State for Health how many speech therapists he estimates are required per 100,000 population; and what is the current national average.

  Mr. Freeman
  A research study by Dr. Philip Davies of Oxford university, funded by the Department and published in December 1989, estimated that 26·0 (whole-time equivalent) qualified speech therapists per 100,000 population would be required if current methods of intervention were maintained. The research also indicated that the number of qualified therapists required could be reduced to 20·5 (whole-time equivalent) per 100,000 population if assistants were used to assist with group work. Dr. Davies's study concluded that a major review of the current concepts of speech therapy provision appeared to be warranted. In accordance with this the Department is supporting the College of Speech Therapists work to produce national guidelines for speech therapy services and will discuss with the college the introduction of another grade to provide appropriate assistance for the degree qualified members of the profession. The current national average of qualified speech therapists is 5·7 (whole-time equivalent) per 100,000 population.

  Mr. Ashley
  To ask the Secretary of State for Health how many speech therapists per head of population are employed by each of the regional health authorities.

  Mrs. Virginia Bottomley
  The information is as follows:

  NHS qualified speech therapists per hundred thousand of population at 30 September 1988

  Region

  Whole Time Equivalent

  Northern

  5·3

  Yorkshire

  4·6

  Trent

  5·3

  East Anglian

  5·5

  North West Thames

  7·7

  North East Thames

  6·5

  South East Thames

  6·8

  South West Thames

  6·3

  Wessex

  4·4

  Oxford

  5·6

  South Western

  6·2

  West Midlands

  5·0

  Mersey

  4·7

  North Western

  5·7

  England (a)

  5·7

  Source: Department of Health (SM 13) Annual Census of NHS Non Medical Manpower; OPCS Mid-1988 Population Estimates.

  Note: (a) Includes staff in London Post Graduate Special Health Authorities.

  Mr. Ashley
  To ask the Secretary of State for Health how many speech therapy posts in special schools are currently vacant; and what proportion this is of the total number.

  Mr. Freeman
  The information is not available centrally and could not be provided in the form required. It is for individual authorities to decide on the deployment of speech therapists.

  Mr. Ashley
  To ask the Secretary of State for Health how many unfilled speech therapy posts there are in the National Health Service as a whole; and how many in each of the regions.
  44
  Mrs. Virginia Bottomley
  The information, which has not yet been fully validated is as follows:

  Region

  Funded posts vacant over 3 months at 31 March 1989

  England

  178

  Northern

  4

  Yorkshire

  7

  Trent

  30

  East Anglia

  6

  North West Thames

  11

  North East Thames

  17

  South East Thames

  17

  South West Thames

  12

  Wessex

  10

  Oxford

  12

  South Western

  12

  West Midlands

  21

  Mersey

  13

  North Western

  4

  SHAs

  2

  Source: National Professional Manpower Initiative Survey.

  Note: All figures are rounded to the nearest whole-time equivalent.

  Speech Problems
  Mr. Ashley
  To ask the Secretary of State for Health if he will encourage health authorities to ensure that training programmes for those who have contact with the public include a showing of the National Speak Week video, "Show You Care".

  Mr. Freeman
  Health authorities are responsible for determining their own staff training programmes and are already be well aware of the need to include information about communication difficulties in those programmes. We are taking steps to commend to all health authorities the use of the National Speak Week video "Show You Care".

  Mr. Ashley
  To ask the Secretary of State for Health if he will list those physical and psychological problems that can lead to speech defects according to information known to his Department.

  Mr. Freeman
  We are aware that speech and language defects can arise from mental handicap, cerebral palsy, cranio-facial abnormalities, hearing impairment, cerebrovascular accident-stroke, head injury, head and neck surgery, progressive neurological diseases, autism, developmental aphasia, senile dementia, other phsychiatric disorders and a variety of rarer conditions.

  Mr. Ashley
  To ask the Secretary of State for Health if he will publish in the Official Report the salary scales for speech therapists

  Mrs. Virginia Bottomley
  This information is in "Advance Letter (SP) 4/90" a copy of which is in the Library.

  Mr. Ashley
  To ask the Secretary of State for Health if he will seek evidence on the number and proportion of advertisements for speech therapy posts for which there are no applications.

  Mrs. Virginia Bottomley
  No.
  45
  Mr. Ashley
  To ask the Secretary of State for Health if he will seek information on the number of children in special schools who need speech therapy but are not receiving it because a speech therapist cannot be obtained.

  Mr. Freeman
  Local education authorities and district health authorities are responsible for arranging speech therapy services for children in special schools. We are aware that, despite the increase in the numbers of speech therapists employed in the National Health Service and the initiatives we are taking with the professions, there are shortages in some areas. These are local problems which should be resolved by management locally.

  Mr. Ashley
  To ask the Secretary of State for Health what educational literature or publicity on the difficulties faced by those with speech problems has been provided by the Health Education Council; and if he will encourage the council to do more.

  Mr. Freeman
  There are no current publications dealing with this subject produced by the Health Education Authority. Whilst many preventable conditions—such as low birthweight and stroke—can lead to speech problems, it is the primary causes of these conditions which the Health Education Authority generally addresses. Many publications dealing with the remedial aspects of such conditions are produced, more appropriately, by voluntary and other bodies who have developed a special understanding of the difficulties faced by particular groups. These publications are made use of by health authorities and professionals.

  Mr. Ashley
  To ask the Secretary of State for Health (1) what evidence he has on the trend in the overall number of people with speech defects; and what is the trend in each of the major categories of people with speech defects;

  (2) what is the estimated number of people who suffer speech defects; and if he will classify them according to the major causes of the defect.

  Mr. Freeman
  An article, "Communication Disorders, Planning a Service to meet the Needs" published in the December 1989 issue of the "British Journal of Disorders of Communication" by Dr. Enderby and Dr. Davies, and based on research funded by the Department, confirmed an earlier estimate of approximately 2·3 million people in the United Kingdom with speech and language disorders, produced by Dr. Enderby and Dr. Philipp. The article, a copy of which is in the Library, also contained estimates for most of the major categories of speech and language disorder. There is no firm evidence available about trends in overall numbers and individual categories.

  Mr. Ashley
  To ask the Secretary of State for Health what is the average cost of restoring some mobility by a hip operation to an arthritic patient; and what is the average cost of restoring some speech through speech therapy to a patient who has suffered a stroke.

  Mr. Freeman
  Information is not available in the form requested. The average cost of a National Health Service hip replacement operation was approximately £2,600 in 1988–89.

  Mr. Ashley
  To ask the Secretary of State for Health what proportion of speech therapists currently have specialist qualifications.

  Mrs. Virginia Bottomley
  This information is not available centrally.
  46
  Mr. Ashley
  To ask the Secretary of State for Health with whom he has discussed the problem of matching the supply and demand for speech therapy; what information he has collected; and when he intends to publish his conclusions.

  Mr. Freeman
  Officials have held discussions about speech therapy supply and demand issues with representatives of the College of Speech Therapists, the Association of Speech Therapy Managers, National Health Service officials, individual speech therapists and other organisations and individuals. A variety of information has been collected and conclusions will be published as and when appropriate.

  Indicative Drugs Budgets
  Mr. Bowls
  To ask the Secretary of State for Health if he will announce the procedure for the consultation with general practitioners and others by FHSAs prior to the setting of indicative drugs budgets.

  Mrs. Virginia Bottomley
  Practices will be able to discuss their indicative prescribing budgets with their family practitioner committees before they are set. Family practitioner committees will consider the practices' historic spending patterns, comparable average costs for that family practitioner committee, special circumstances of the practices including high-cost patients, anticipated changes in demand and an allowance for the forecast increase in the cost of drugs. In this way, the needs of the practices and their patients will be fully taken into account in setting the budgets.

  Residential Homes
  Mr. Madden
  To ask the Secretary of State for Health if he will take steps to make arrangements for those employed by regional or district health authorities, or National Health Service hospital trusts, directly or indirectly, who have direct or indirect financial interests in residential homes or nursing homes, to be required to register such interests.

  Mrs. Virginia Bottomley
  We expect health authorities to ensure that their employees declare any interests which may influence the way in which the authority discharges its responsibilities. It is for individual authorities to decide how this is best achieved. The same principle will apply to NHS trusts.

  Mr. Madden
  To ask the Secretary of State for Health what reports he has received from health authorities about staff who advise patients on the availability of private residential care receiving commissions from private residential homes for referring clients; and if he will make a statement.

  Mrs. Virginia Bottomley
  We have no record of any such reports.

  Mr. Madden
  To ask the Secretary of State for Health if he will take steps to arrange for those private residential premises, who care for individuals in receipt of Department of Health and Department of Social Security support, to register for easy public inspection the names of those holding direct or indirect pecuniary interest in the home.

  Mrs. Virginia Bottomley
  Part 1 of the Registered Homes Act 1984 provides for local authorities to make
  47
  available for inspection at all reasonable times, registers of those persons responsible for carrying on a residential care home registered under the 1984 Act.

  Meningitis and Hepatitis A (School Outbreaks)
  Mr. Alton
  To ask the Secretary of State for Health if he will make a statement about the outbreak(a) of meningitis in a school in Runcorn, Merseyside and (b) of hepatitis A in a school at Croxteth, Merseyside.

  Mr. Freeman
  Two children from the Brookvale primary school were admitted to Warrington general hospital for treatment for meningitis and one child for observation. All have now been discharged. The health authorities concerned have done everything necessary to keep the outbreak under control.

  Five children from St. Swithin's school in Croxteth have contracted hepatitis A. We are satisfied that the Liverpool public health department is taking the necessary measures to control the outbreak.

  Labour Statistics
  Mr. McLeish
  To ask the Secretary of State for Health what was the mid-year estimate of the population of working age between the ages of 16 and 59 or 64 years in Great Britain and for each of the standard regions in(a) June 1979 and (b) June 1989.

  Mr. Freeman
  The information requested is as follows:

  Population of working age (16 to 64 for males: 16 to 59 for females)

  Region

  Mid-year 1979

  1Mid-year 1988

  North

  1,877·9

  1,890·9

  Yorkshire and Humberside

  2,911·5

  3,016·7

  East Midlands

  2,279·4

  2,463·6

  East Anglia

  1,097·0

  1,231·6

  South East

  10,222·6

  10,783·7

  South West

  2,504·6

  2,781·0

  West Midlands

  3,117·5

  3,230·5

  North West

  3,828·4

  3,897·0

  Wales

  1,653·0

  1,724·7

  Scotland

  3,084·9

  3,169·8

  Great Britain

  32,576·8

  34,189·5

  1 Populations estimates for mid-1989 have not yet been made and are not expected to be available until July 1990.

THE ARTS

  East Midlands
  Mr. Tredinnick
  To ask the Minister for the Arts when he last met representatives of the arts in the east midlands; what was discussed; and if he will make a statement.

  Mr. Luce
  I met the chairman and director of East Midlands Arts on 19 December to discuss the Wilding report.

  Royal Shakespeare Company
  Mr. Carrington
  To ask the Minister for the Arts what information he has on contributions made by the City of London Corporation to the Royal Shakespeare Company since the Barbican centre was built.

  Mr. Luce
  The City of London Corporation provided the Barbican theatre as a purpose-built London home for 48
  the Royal Shakespeare Company in 1982. Since then the RSC has enjoyed a rent which is low by commercial standards. In 1988 the corporation also agreed to contribute £500,000 towards the RSC's accumulated deficit.

  Arts Council
  Mr. Colvin
  To ask the Minister for the Arts when he last met the chairman of the Arts Council; and what was discussed.

  Mr. Luce
  I meet Mr. Palumbo from time to time to discuss matters of mutual interest.

  Wilding Report
  Mr. Bowis
  To ask the Minister for the Arts what representations he has received concerning the Crafts Council following his statement on the Wilding report.

  Mr. Luce
  I have received general support for my announcement to the House on 13 March 1990 that the Crafts Council will remain an independent body.

  Queen Street Mill, Burnley
  Mr. Pike
  To ask the Minister for the Arts if he will make a visit to Queen Street mill, Marle Syke, Burnley.

  Mr. Luce
  I have no plans at present to visit the Queen Street mill museum, Burnley.

  Admission Charges
  Mr. John Evans
  To ask the Minister for the Arts if he has any plans to enforce charges for art galleries.

  Mr. Luce
  The Government's repeatedly stated policy is that the decision whether to operate a system of admission charges or voluntary donations should be for the board of trustees responsible for each institution.

  The Government neither impose nor prohibit the imposition of admission charges.

  I confirm this in the Government's response to the recent report of the Education, Science and Arts Committee, copies of which I placed in the Library of the House on 12 March.

  Donations
  Mr. Summerson
  To ask the Minister for the Arts whether he will list the five highest individual corporate or private donors to the arts in the last 12 months.

  Mr. Luce
  Such information is not held centrally. However, with business sponsorship of the arts now estimated at well over £30 million a year, donors, both great and small, are making a very useful contribution to supporting the arts.

  Royal National Theatre (Exhibition)
  Mr. Hannam
  To ask the Minister for the Arts if he has considered an application for an exhibition relating to the Royal National theatre to be displayed in the Upper Waiting Hall.

  Mr. Luce
  I understand that, under procedures agreed by the Services Committee, arrangements have been made with the authorities of the House for the exhibition to be held in the Upper Waiting Hall from 14 to 18 May.

CIVIL SERVICE

  Civil Service Unions
  Mr. Harry Barnes
  To ask the Minister for the Civil Service when he last met representatives of the Civil Service unions; and what subjects were discussed.

  Mr. Winnick
  To ask the Minister for the Civil Service when he last met Civil Service unions; and what matters were discussed.

  Mr. Fisher
  To ask the Minister for the Civil Service when he last met representatives of the Civil Service unions; and what subjects were discussed.

  Mr. Luce
  I meet the Civil Service unions from time to time, to discuss a range of matters.

  Next Steps Agencies
  Mr. Summerson
  To ask the Minister for the Civil Service what progress has been made in developing the next steps agencies; and what was discussed.

  Mr. Watts
  To ask the Minister for the Civil Service what progress has been made in the setting up of Civil Service agencies since his last statement to the House.

  Mr. Luce
  Excellent progress is being made. Only last week, my right hon. Friend the Secretary of State for Trade and Industry launched the insolvency service as an executive agency, bringing the total number of agencies to 12, with many more to follow. I hope to make a further statement shortly.

  Equal Opportunities
  Mr. Janner
  To ask the Minister for the Civil Service what further progress has been made to implement the Civil Service's equal opportunities employment programme.

  Mr. Luce
  Good progress is being made. We will shortly be publishing a revised code of practice on the employment of people with disabilities. The programme of action on women continues to be implemented, and in May, I shall introduce a new programme for action to achieve equality of opportunity in the Civil Service for people of ethnic minority origin.

AGRICULTURE, FISHERIES AND FOOD

  Lindane
  Mr. Martyn Jones
  To ask the Minister of Agriculture, Fisheries and Food what information he has on when the Advisory Committee on Pesticides will be discussing the matter of lindane.

  Mr. Gummer
  Scientists within the Health and Safety Executive and MAFF are currently evaluating the data on lindane. It is not yet possible to predict when their report will be put to the Advisory Committee on Pesticides but it is being treated as a priority.

  Pesticides
  Sir Richard Body
  To ask the Minister of Agriculture, Fisheries and Food if he will seek to obtain the handbook of basic information on the 100 most commonly used 50
  pesticides in the United States of America, published by the United States Department of Agriculture; and if he will arrange for a similar publication in the United Kingdom.

  Mr. Maclean
  This Department and the Department of Agriculture for Scotland monitor usage of pesticides and the results are published. We are currently preparing a review of the surveys carried out between 1984 and 1989, which cover all main crops, to be published later this year. The USDA publication is being sought.

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will list the pesticides for which his Ministry carries out surveillance for residues in food that are(a) banned in the United Kingdom and (b) in use in the United Kingdom; and if he will make a statement.

  Mr. Gummer
  Monitoring for pesticide residues is carried out by the working party on pesticide residues. Results are published and show, for all samples analysed, both those pesticides which have been sought and the levels of any residues which have been found.

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food what action he intends to take to phase out pesticides listed in part (c) of annex B of the final declaration of the third international conference on the protection of the North sea; and if he will make a statement.

  Mr. Gummer
  Under the terms of the North sea declaration, special attention is to be paid to phasing out pesticides which are the most persistent, toxic and liable to bioaccumulate. Annex 1B, part (c), lists 18 substances the use of which must be strictly limited or banned. Eleven of these substances are not approved for use in the United Kingdom, and approval for another, chlordane, will be withdrawn on 31 December 1992.

  The remaining six substances are all tightly controlled under the Control of Pesticide Regulations 1986. Atrazine is being reviewed by the Advisory Committee on Pesticides, mercury compounds and PCP are being considered by the European Community, and chloropicrin, fluroacetamide and quintozene will be considered by the Advisory Committee on Pesticides when priorities for review are set later this year.

  Baby Milk Products
  Mr. Redmond
  To ask the Minister of Agriculture, Fisheries and Food if he has any plans to introduce legislation limiting the aluminium content of baby milk products produced by manufacturers; and if he will make a statement.

  Mr. Maclean
  We have no plans to introduce legislation. Results of the Government's surveillance work show that likely intakes of aluminium from baby milk products are well below the provisionally tolerable weekly intake set by the joint FAO/WHO expert committee on food additives.

  Mr. Redmond
  To ask the Minister of Agriculture, Fisheries and Food what action he is taking to ensure that the aluminium content in baby milk products does not exceed the European Commission's recommended safety limits.

  Mr. Maclean
  There are no recommended EC limits for aluminium in baby foods.

  Radioactivity
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will list the research projects he is currently(a) conducting or (b) funding on the effects of radioactivity contamination on agriculture and food products, giving the research establishment in each case.

  Mr. Gummer
  The following projects are being funded by my Department in 1989–90.

  Project title

  Contractor

  Wind tunnel and rain tower studies

  IC

  Implementation of models for upland environments

  ANS

  Maintenance and support of the Soil-Plant-Animal Dynamic-Evaluation (SPADE) suite of codes

  ANS

  Field investigations on the dynamics of Caesium in agricultural foodchains following the Chernobyl accident: Sample collection and analysis

  ANS

  Further experimental studies on radionuclide transfer to upland plant species

  ANS

  Enhancement of atmospheric dispersion models in the SPADE suite of codes

  ANS

  Development of a method to rapidly predict the availability of radio-caesium to animal products after an accidental discharge

  ITE/MLURI

  Vegetation/soil survey in Cumbrian restricted area-validation of aerial survey

  ITE

  Studies on Caesium in soil, plants and sheep in Ireland

  QUB

  Particle properties and root uptake

  UKAEA

  Continuation of studies into the use of Prussian Blue to reduce body burdens of caesium in sheep

  QUB

  Comparative deposition and uptake by crops of radionuclides around English and French nuclear sites

  UKAEA

  Influence of upland soil type on caesium uptake

  UKAEA

  Assessment of novel analytical techniques

  UKAEA

  Strontium-90 in crops and effect of Chernobyl deposition

  UKAEA

  Development of automation of Strontium-90 analytical method

  UKAEA

  Gut uptake of fission products from fuel particles

  UKAEA

  Implementation of risk assessment and emergency codes for personal computers

  CERC

  Effects of land management on caesium recycling

  ANS

  Radionuclide transfer: a critical view

  ANS

  Methods to reduce agricultural impact

  ANS

  Radionuclide uptake by sheep

  ITE

  Transfer of radionuclides in an area reclaimed from the sea

  NRPB

  Specification of models for upland environments

  ANS

  Further evaluation of data obtained from field investigations on caesium dynamics following Chernobyl. Analysis of 1988–89 samples

  ANS

  Effects of organic matter on caesium uptake in pasture

  UKAEA

  Studies into the migration and binding of radio-caesium in peat

  UKAEA

  The migration of caesium 134 and 137 in peat

  UKAEA

  Recycling of radio-caesium

  UKAEA

  Preparation of detailed maps on selected farms in north Wales known to have received Chernobyl fall-out

  SSLRC

  Note:

  ANS—Associated Nuclear Services.

  ITE—Institute of Terrestrial Ecology.

  UKAEA—AEA Technology (Harwell Laboratories).

  IC—Imperial College of Science, Technology and Medicine.

  MLURI—Macauley Land Use Research Institute.

  QUB—Queens University, Belfast.

  CERC—Cambridge Environmental Research Contractors.

  NRPB—National Radiological Protection Board.

  SSLRC—Soil Survey and Land Research Centre.

  52
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will list the number and types of equipment he has for measuring radioactivity in plants, animals and liquids.

  Mr. Gummer
  My Department maintains fully equipped laboratory facilities, provided with a comprehensive range of radiometric equipment for measuring all types of radioactivity in any kind of agricultural, fisheries or food materials. In addition, we have 50 sodium iodide detectors which may be used, among other things, for monitoring gamma-emitting radionuclides in live animals in field conditions.

  Food Stockpiles
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will list the quantities and types of food which are stockpiled as part of his emergency planning procedures.

  Mr. Gummer
  The strategic food stockpile contains flour, sugar, refined fat, yeast, special formulation biscuits, sweets and vitaminised skimmed milk powder, chosen for their value as sources of energy and nutrition for use in time of war or severe national crisis. It has been the policy of successive Governments not to reveal detailed information on the level and locations of the stockpile.

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the aims of the Institute of Grocery Distribution study on identifying major food stocks for defence planning.

  Mr. Gummer
  The aim of this study is to provide my Department with up-to-date information on food stocks and patterns of food distribution for contingency planning purposes.

  Intervention Board
  Mr. Gill
  To ask the Minister of Agriculture, Fisheries and Food what progress has been made towards establishing the Intervention Board as an executive agency; and if he will make a statement.

  Mr. Curry
  I am pleased to announce that the Intervention Board will become an executive agency with effect from 1 April 1990.

  The Intervention Board for Agricultural Produce was set up by the European Communities Act 1972. It is appointed by Agricultural Ministers to carry out this country's obligations under the common agricultural policy of the European Community. The board delegates its functions to the Government Department created by section 6 of the 1972 Act, and this is the new agency.

  The agency's task is to administer the market regulation and production support measures of the guarantee section of the European agricultural guidance and guarantee fund. Its aim will be to operate them as economically, efficiently and effectively as possible. The board will oversee the way in which the agency exercises its responsibilities.

  As a Government Department the Intervention Board has achieved a great deal since it was created in 1972. Establishing it as an agency will give it the impetus and additional financial and management tools to build on the good work achieved; to strengthen its performance; and to promote a more effective and efficient quality of service to

  53
  its customers. The agency's efficiency will mainly be judged through indexes of unit cost and productivity. Additional performance measures relating to its objectives will be developed through its corporate and business plans. The financial targets for 1990–91 will be:

  (i.) to achieve annual cumulative efficiency gains on its running costs of 2 per cent.

  (ii.) to keep disallowance resulting from the agency's actions and falling on the Exchequer following the clearance of the 1988 EAGGF accounts to 0·5 per cent. of the vote 1 turnover; and

  (iii.) to keep non-financing losses on intervention stocks to 6·5 per cent of total intervention activity.

  Mr. Guy Stapleton who has been the chief executive of the Intervention board as a Government Department since 1986, has been appointed chief executive of the agency. We wish him and his staff every success in their new role.

  Copies of the framework document are being placed in the Library of the House.

  Lead-contaminated Food
  Mr. Boswell
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement about the action taken by his Department to protect consumers following the recent importation of lead-contaminated animal feedingstuffs.

  Mr. Gummer
  As soon as there was clear evidence of a possible threat to the safety of food supplies, the Government imposed strict statutory controls to protect consumers under part I of the Food and Environment Protection Act 1985.

  Two thousand and eight-five tonnes of lead contaminated maize gluten replacer pellets were imported of which 730 tonnes were distributed and incorporated into 7,400 tonnes of commercial animal feed rations. My Department had the task of tracing all this imported material through the complex chain of importers, compounders, merchants and agents, of informing all recipients, implementing the necessary controls and supervising the withdrawal and disposal of contaminated feed. In all, some 2,100 farms in England and Wales were found to have received varying amounts of lead-contaminated feedingstuffs, including 1,062 dairy farms.

  All milk produced on these farms was collected separately and used to manufacture powdered milk and butter which were stored pending full scientific analysis. In addition, an intensive sampling programme for ex-farm liquid milk was organised, in conjunction with the Milk Marketing Board, to enable restrictions to be lifted from individual farms as soon as lead levels were confirmed to have fallen below the limit set by Department of Health. A total of nearly 14,000 individual milk samples were taken and, by 13 December, milk restrictions were lifted from all farms.

  Three livestock release schemes were introduced, two of which required the taking and analysing of blood samples from the animals concerned. During the 11 weeks for which these schemes were in operation, 20 complete farms were released from all restrictions under scheme I, 116,000 animals were released under scheme II and 7,000 animals under scheme III. We analysed 22,000 blood samples.

  A number of scientific research and monitoring programmes were set up at short notice to elucidate the behaviour of lead in livestock and foods of various types and to monitor the decline in lead levels once all the contaminated feed had been removed. In the light of the
  54
  information obtained, all the remaining livestock movement and slaughter restrictions were lifted on 12 February.

  As a result of the firm action taken by the Government, together with the painstaking work undertaken by officials in the various Government Departments and outside organisations involved, and with the constructive co-operation of the vast majority of farmers and traders, I believe that the Government have been able to ensure the full protection of consumers, and to preserve justifiable confidence in British agricultural produce, both at home and overseas.

  Salmonella
  Mr. Boswell
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on progress on control of salmonella in the European Community.

  Mr. Gummer
  The European Commissioner for Agriculture has assured me that he will present proposals on the control of zoonoses by May with a view to adoption by the Council in the summer. I welcome this undertaking as I believe that controls on salmonella should be adopted on a Community basis.

  We have a strong basis upon which to pursue discussions in the Community because of the stringent and comprehensive set of measures in the United Kingdom to combat the salmonella problem. Our measures extend throughout the production chain, covering feedingstuffs, controls on breeding flocks, hatcheries and laying flocks and hygienic practices during slaughter and processing. These have been directed in particular at egg production, but have also helped to control salmonella in the poultry meat sector. The action that we have taken in the United Kingdom has clearly had an impact in reducing potential causes of human food poisoning, particularly from eggs.

  As for the Community policy, we believe that the key priority areas will be to ensure clean hatchery and breeding stock for both layers and broiler flocks and to minimise any risk of infection entering through feed. Good hygiene is essential through all stages of production as this reduces overall infection. We believe that the Community measures will also need to require regular testing of laying flocks and to specify appropriate action when salmonellae, of types particularly associated with human food poisoning, are found.

  The Community measures will need to take account of all relevant research and to ensure that the action taken in respect of particular poultry flocks is commensurate with the health risks which may be present. Consideration should be given, for example, to including in Community policy the option of treating certain types of flock to remove or prevent infection in young birds before they come into lay. The Government are already reviewing this possibility. In addition, there is a need to consider whether inhibitory treatment of chicks is an option that should be encouraged in commercial laying flocks to prevent them becoming infected.

  The risk of infection in eggs arises from certain invasive forms of salmonellae which can infect the egg before it is laid. When these are present in laying or breeding flock our policy has been to prevent any eggs from the flock entering the food chain and we will be looking for similar steps to be taken throughout the Community.

  It is important to remove any risk to public health when infected flocks are compulsorily slaughtered. We have

  55
  hitherto ensured this by requiring the carcases to be destroyed. However, in discussions in the Community it has become clear that regulations are likely to follow the approach of applying safeguards to the end products permitting them to be consumed without danger to health rather than requiring carcases from infected flocks to be destroyed. We recognise that an alternative to our present policy would be to ensure that any salmonellae present in the bird are destroyed by thorough cooking. This is the normal treatment process for birds at the end of their laying cycle. In the light of these considerations, the Government have decided to permit carcases from infected flocks to be processed under carefully controlled conditions and subject to stringent safeguards to remove any risk from the product to public health and we will be seeking to ensure similar requirements in the Community discussions.

  The flock owner will retain the proceeds from the sale of the birds and our compensation arrangements will be adjusted accordingly.

  We will be issuing on 2 April further advice to local authorities, which enforce the poultry meat hygiene legislation, on measures to minimise the spread of salmonellae in poultry slaughterhouses. This, like the action taken over breeding flocks and hatcheries, will minimise the level of infection in birds reared for the table. It will, of course, continue to be necessary for caterers and retailers to ensure that raw and partly cooked poultry products are carefully handled and for any raw meat to be handled properly in the home and fully cooked, as emphasised in the Government's food safety leaflet.

  I believe that measures adopted on a Community basis will give the best protection to consumers and I will be working to achieve a speedy and effective agreement so that consumers can have confidence in food supplies whether they are home-produced or imported from other member states.

  Sheep Scab
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will list the number of outbreaks of sheep scab in(a) England, (b) Wales and (c) Scotland for each of the last 10 years.

  Mr. Gummer
  The information is as follows:

  Sheep scab outbreaks

  Year

  England

  Wales

  Scotland

  Total

  1980

  33

  —

  —

  33

  1981

  45

  11

  10

  66

  1982

  87

  5

  2

  94

  1983

  144

  10

  3

  157

  1984

  116

  9

  6

  131

  1985

  23

  41

  10

  74

  1986

  19

  36

  —

  55

  1987

  23

  14

  1

  38

  1988

  26

  9

  1

  36

  1989

  60

  5

  1

  66

  19901

  15

  5

  —

  20

  1 January and February.

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food whether he has plans to suspend the compulsory dipping of sheep not affected with sheep scab; and if he will make a statement.
  56
  Mr. Gummer
  As announced by the then Parliamentary Secretary on 14 April 1989, there will be national compulsory dips for sheep scab in the autumn of both 1989 and 1990.

  Nuclear Accidents
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will make it his policy to conduct an aerial survey of the whole or part of the United Kingdom in the event of an accident occurring in a nuclear power station in northern France; and if he will make a statement.

  Mr. Gummer
  The safety of foodstuffs, for which my Department is responsible, requires direct measurement of dietary items. The potential value of an aerial survey in relation to food production would need to be assessed in the light of specific circumstances.

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food whether he has conducted a review of his emergency planning procedures as a result of a nuclear accident in the last five years; and if he will make a statement.

  Mr. Gummer
  I refer the hon. Member to the reply given by my right hon. Friend the Prime Minister on 18 December 1986.

  My Department played a full part in the Government's post-Chernobyl review of contingency planning, including preparation of the national response plan for dealing with the effects of a future nuclear accident overseas. We shall continue to review and update our emergency arrangements in the light of technical and scientific developments both at home and overseas. Details of our arrangements for each of the major United Kingdom nuclear sites are being prepared for publication and copies will be placed in the Library of the House.

  Drainage Rates
  Mr. Ian Bruce
  To ask the Minister of Agriculture, Fisheries and Food whether he intends to introduce new regulations to amend the provisions of the Land Drainage Act 1976 in order to permit the National Rivers Authority and internal drainage boards to precept drainage rates from (i) domestic householders, (ii) business premises and (iii) agricultural holdings.

  Mr. Curry
  We have already made the Internal Drainage Boards (Finance) Regulations 1990 (SI 1990 No. 72) which came into force on 24 January 1990. They provide that, from 1 April 1990, internal drainage boards (and the NRA when acting as an internal drainage board), may continue to collect drainage rates direct from the agricultural sector and, in respect of the non-agricultural sector may impose a special levy on the district councils in whose area the internal drainage district lies.

  Mr. Ian Bruce
  To ask the Minister of Agriculture, Fisheries and Food whether he will state what consultations he has held with interested parties over the method by which drainage rates will be levied after 1 April.

  Mr. Curry
  We consulted the Association of County Councils, Association of District Councils, Association of Drainage Authorities, Association of London Authorities, Confederation of British Industry, Country Landowners
  57
  Association, Internal Drainage Boards, London Boroughs Association, National Association of Local Councils, National Farmers Union, National Rivers Authority and the Tenant Farmers Association.

  Veterinary Laboratories, Bangor
  Mr. Alex Carlile
  To ask the Minister of Agriculture, Fisheries and Food what plans he has to close the veterinary laboratories in Bangor; and if he will make a statement.

  Mr. Maclean
  The review of the veterinary investigation service commissioned by the Minister, has now been finalised and is being submitted to Ministers for consideration.

  As yet, no decisions have been made on any recommendations that might arise from this review.

  Water Pollution
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food when he expects to publish his next report on water pollution from farm waste.

  Mr. Gummer
  It is intended to publish the joint MAFF/NRA report " Water Pollution From Farm Waste 1989" on 4 April.

  Genetically Engineered Organisms
  Mr. Matthew Taylor
  To ask the Minister of Agriculture, Fisheries and Food what are the labelling requirements in respect of foods containing genetically engineered oganisms.

  Mr. Gummer
  [holding answer 23 March 1990]: Although there are no specific labelling requirements for foods containing such organisms; the Food Labelling Regulations 1984 apply to most foods, including foods containing genetically engineered organisms. The Food Advisory Committee has been asked to consider, within the context of the Food Labelling Regulations, the need for special labelling of those products containing genetically engineered organisms following their approval by the Advisory Committee on Novel Foods and Processes. In the recent case of genetically engineered bakers' yeast the Food Advisory Committee recommended that additional labelling information was not required.

EMPLOYMENT

  Enterprise Allowance Scheme
  Mr. Campbell-Savours
  To ask the Secretary of State for Employment (1) what plans he has to review enterprise allowance scheme allocations to Cumbria for the coming financial year;

  (2) whether his proposed allocations for the TEC in Cumbria provides support resources for enterprise allowance scheme awards in the financial year 1990–91.

  Mr. Eggar
  The size and scale of the enterprise allowance scheme is regularly reviewed to take account of levels of unemployment and the demand for places. Allocations to TECs in respect of the scheme will be determined by the Training Agency's regional directors. I am confident that the allocation to the Cumbria TEC will provide adequate support resources for that area.

  YTS
  Ms. Short
  To ask the Secretary of State for Employment what were the numbers of accidents on YTS, fatal, major and minor, for the period September to December 1989; and how many YTS placements were closed or not accepted in the period.

  Mr. Nicholls
  YTS accident statistics and closure and non-acceptance figures on health and safety grounds are collected on a quarterly basis. Table A provides YTS accident figures for the period 1 October 1989 to 31 December 1989.

  Table A

  Accidents1

  Fatalities

  Major injuries2

  Minor injuries

  13

  170

  721

  Table B provides the closure and non-acceptance figures for the period 1 October 1989 to 31 December 1989. These figures are provisional.

  Table B

  Number

  Placements closed

  6

  Placements not accepted

  1

  1Training Agency figures have been compiled on a similar basis to those prepared by the Health and Safety Executive on employed persons. However, the Training Agency's figures will include a number of accidents to trainees in educational establishments and road traffic accidents which may not have been reportable to the Health and Safety Executive had the individuals been employed.

  2Major injuries are classified according to the severity criteria laid down in the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1985.

  3This fatality was a road traffic accident in scheme time.

  Wages Inspectors
  Mr. Barry Jones
  To ask the Secretary of State for Employment if he will make a statement on plans for restructuring the wages inspectorate in Wales.

  Mr. Nicholls
  There are no plans to restructure the wages inspectorate in Wales.

  Mr. Barry Jones
  To ask the Secretary of State for Employment if he will state the number of establishments visited in Wales by wages inspectors in each year since 1979.

  Mr. Nicholls
  The information requested is given in the following table.

  Number visited

  1979

  2,097

  1980

  2,131

  1981

  1,753

  1982

  1,720

  1983

  1,508

  1984

  1,249

  1985

  1,577

  1986

  1,318

  1987

  1,039

  1988

  1,014

  1989

  970

  Mr. Barry Jones
  To ask the Secretary of State for Employment if he will state the number of wages
  59
  inspectorate officers with responsibility for Wales at (a) senior executive officer grade, (b) higher executive officer grade and (c) clerical grades.

  Mr. Nicholls
  Wages inspection in Wales is the responsibility of the wages inspectorate divisional offices in Manchester and Bristol and is not administered separately from the other areas covered by those offices.

  The total number of staff in those offices at the grades specified is given in the table.

  Staff

  Senior executive officer grade

  2·0

  Higher executive officer grade

  5·0

  Clerical grades

  8·5

  Health and Safety Commission
  Mr. Strang
  To ask the Secretary of State for Employment on what date the annual report of the Health and Safety Commission was launched; how many copies of the report have been published; and on what date he expects copies of the report to be made available to the general public.

  Mr. Nicholls
  The Health and Safety Commission's annual report for 1988–89 was launched on Monday 26 February 1990. A total of 2,500 copies of the published report have been sent to HMSO for sale to the public. These will be available in London from 23 March and elsewhere by 29 March.

  Training and Enterprise Councils
  Mr. McLeish
  To ask the Secretary of State for Employment for how long Training Agency staff will be contracted to the training and enterprise councils.

  Mr. Eggar
  Training Agency staff who have volunteered to second to training and enterprise councils will normally go on secondment for an initial period of three years. This period may subsequently be extended by mutual agreement between the Training Agency, the secondee and the training and enterprise council.

  Mr. McLeish
  To ask the Secretary of State for Employment how long training and enterprise council contracts will run.

  Mr. Eggar
  Training and enterprise council contracts will not have a fixed duration but will be subject to the production each year of an agreed business plan.

  Mr. McLeish
  To ask the Secretary of State for Employment if any additional expenditure is being given to training and enterprise councils to undertake new training programmes other than employment training and youth training; and if he will make a statement.

  Mr. Eggar
  Training and enterprise councils (TECs) will be responsible for running the training programmes and business support activities currently managed by my Department. They will be given appropriate budgets to enable them to do this. Additionally, TECs will have a local initiative fund which can be used to finance new initiatives or to strengthen and expand existing programmes and services.
  60
  Mr. McLeish
  To ask the Secretary of State for Employment if any contracts have been concluded with any of the training and enterprise councils; and if he will make a statement.

  Mr. Eggar
  I expect to conclude contracts with the first training and enterprise councils in early April.

  Mr. McLeish
  To ask the Secretary of State for Employment if discussions have taken place with the training and enterprise councils regarding the reduction in expenditure on youth training per trainee week between 1989–90 and 1992–93; and if he will make a statement.

  Mr. Eggar
  The budget available for youth training has been discussed with training and enterprise councils (TECs) as part of the discussions over their business plans. A number of TECs have now submitted their plans setting out how they intend to improve the skills and qualifications of young people in their area.

  Mr. McLeish
  To ask the Secretary of State for Employment if he has received representations from the National Federation of Self Employed and Small Businesses regarding the composition of training and enterprise councils; and if he will make a statement.

  Mr. Eggar
  The National Federation of Self Employed and Small Businesses Ltd has raised a number of issues with me including the composition of the boards of training and enterprise councils. The federation was advised that TEC boards and their members must meet the criteria set out in "Training and Enterprise Councils: a Prospectus for the 1990s", published in March 1989.

  Mr. McLeish
  To ask the Secretary of State for Employment if he will give the estimated training and enterprise councils' expenditure in England and Wales in 1990–91 for the provision of ET and YTS.

  Mr. Eggar
  The 1990–91 supply estimate (class VI vote 1, Department of Employment: training and enterprise programmes) shows the planned expenditure for ET and YT. Table 2 on page 13 shows the estimated expenditure for these and the Training Agency's other main programmes by TECs and area offices.

  Mr. McLeish
  To ask the Secretary of State for Employment if he will list the applications received for setting up training and enterprise councils; if he will list those given development funding including the expenditure involved; if he will list those under consideration; and if he will list the areas of England and Wales where applications are still awaited.

  Mr. Eggar
  The information requested is as follows:

  Applications approved

  Development funding awarded (£)

  Essex

  110,000

  Hampshire

  149,000

  Hertfordshire

  110,000

  Isle of Wight

  85,000

  Milton Keynes

  110,000

  Devon and Cornwall

  190,000

  Dorset

  95,000

  Birmingham

  139,00

  Staffordshire

  113,000

  Walsall

  104,000

  61

  Application approved

  Development funding awarded (£)

  Calderdale/Kirklees

  106,000

  Sheffield

  138,000

  South and East Cheshire

  106,000

  Cumbria

  115,000

  East Lancashire

  118,000

  Oldham

  81,000

  Rochdale

  75,000

  Teesside

  127,000

  Tyneside

  136,000

  Wigan

  94,000

  North Yorkshire

  125,000

  North Nottinghamshire

  120,000

  Wearside

  90,000

  Mid-Glamorgan

  104,000

  Kingston/Merton

  111,000

  Thames Valley

  125,000

  Somerset

  110,000

  Norfolk/Waveney

  149,000

  Suffolk

  106,000

  Rotherham

  90,000

  County Durham

  94,000

  North East Wales

  98,000

  Northumberland

  92,000

  West Wales

  110,000

  Stockport/High Peak

  110,000

  South Glamorgan

  100,000

  North West Wales

  110,000

  Wolverhampton

  88,000

  Heart of England

  110,000

  Dudley

  98,000

  Greater Peterborough

  1—

  Manchester

  150,000

  South Cambridgeshire

  116,000

  Avon

  115,000

  Kent

  158,000

  Gwent

  100,000

  St. Helens

  75,000

  Barnley/Doncaster

  1—

  Bolton/Bury

  110,000

  Leeds

  120,000

  Coventry /Warwickshire

  114,000

  Gloucestershire

  112,000

  Northamptonshire

  1

  Sandwell

  115,000

  Wakefield

  109,000

  London East

  195,000

  Bedfordshire

  1

  South London

  1

  Bradford

  1

  Central England

  1

  North Derbyshire

  1

  Southern Derbyshire

  1

  Merseyside

  1

  Powys

  1

  Lancashire Area West

  1

  Chester/Ellesmere Port/Wirral

  1

  Applications under consideration

  Surrey

  Lincolnshire

  Greater Nottinghamshire

  Hereford and Worcester

  Applications awaited

  Humberside

  Central London

  Shropshire

  Enfield/Barnet

  South Thames

  Wiltshire

  North Cheshire

  Leicestershire

  Inner London North City

  Brent/Harrow

  62

  Applications approved

  Development funding awarded (£)

  Sussex

  West London

  1 Not finalised.

  Mr. McLeish
  To ask the Secretary of State for Employment if he will list the training and enterprise councils in receipt of development funding by(a) those which have submitted operational budgets, including the amount of expenditure involved, (b) those which have contracts approved including the amount of expenditure and (c) those which have yet to submit operational budgets.

  Mr. Eggar
  Thirteen training and enterprise councils (TECs) have submitted their corporate and business plans.

  These are:

  Calderdale and Kirklees

  Cumbria

  Devon and Cornwall

  Dorset

  East Lancashire

  Hertfordshire

  Oldham

  Rochdale

  South and East Cheshire

  Teesside

  Thames Valley

  Tyneside

  Wearside

  The budgets for these TECs are still under discussion. Contracts will be signed when the plans are approved.

  The following TECs are currently in the development phase and have yet to submit their corporate and business plans:

  Avon

  Leeds

  AZTEC

  London East

  Barnsley-Doncaster

  South London

  Bedfordshire

  Manchester

  Birmingham

  Merseyside

  Bolton-Bury

  Milton Keynes

  Bradford and District

  Norfolk-Waveney

  Central and South

  Northamptonshire

  Cambridgeshire

  North Nottinghamshire

  CENTEC

  Northumberland

  CEWTEC

  North Yorkshire

  County Durham

  Greater Peterborough

  Coventry-Warwickshire

  Powys

  North Derbyshire

  Rotherham

  Southern Derbyshire

  Sandwell

  Dudley

  Sheffield

  Essex

  Somerset

  Mid-Glamorgan

  Staffordshire

  South Glamorgan

  Stockport and High Peak

  Gloucestershire

  Suffolk

  Gwent

  North East Wales

  Hampshire

  North West Wales

  Heart of England

  West Wales

  St. Helens

  Wakefield

  Isle of Wight

  Walsall

  Kent

  Wigan

  LAWTEC

  Wolverhampton

  Mr. McLeish
  To ask the Secretary of State for Employment if he will outline the guidance given to each training and enterprise council regarding the preparation of a profile of the needs of the unemployed, an assessment of employer-based skill shortages and an analysis of training and education provision in their area; and if he will make a statement.
  63
  Mr. Eggar
  The "Guide to Planning" requires training and enterprise councils (TECs) to undertake a thorough market assessment of their area. The outcome of this assessment will form the basis of the proposals contained in a TEC's corporation plan an business plan.

  Mr. McLeish
  To ask the Secretary of State for Employment if he will outline the guideline given to training and enterprise councils covering the consultations required with(a) local government and (b) education authorities, (c) chambers of commerce, (d) the Engineering Employers Federation and (e) trade councils.

  Mr. Eggar
  The "Guide to Planning" emphasises the need for training and enterprise councils (TECs) to actively consult and involve all organisations in their area with an interest in education and training and small business support.

  Mr. McLeish
  To ask the Secretary of State for Employment if he will place a copy of the TEC operations guideline in the Library.

  Mr. Eggar
  I will place a copy of the TEC operating manual in the Library when it is available.

  Mr. McLeish
  To ask the Secretary of State for Employment if the operational budgets included in the TEC contracts contain premiums for an increased employer contribution to youth training; and if he will make a statement.

  Mr. Eggar
  It is in employers' interests that they should increasingly contribute towards the costs of youth training to ensure its relevance to the needs of industry and commerce. The funding levels which TECs will receive for youth training in 1990–91 therefore assume a rise in the level of employer contributions.

  Mr. McLeish
  To ask the Secretary of State for Employment what is the date for the launch of the first training and enterprise council.

  Mr. Eggar
  I expect contracts to be signed with the first training and enterprise councils (TECs) in early April.

  Mr. McLeish
  To ask the Secretary of State for Employment what percentage of the employment training and youth training expenditure is to be used for performance and incentive bonus payments paid to TECs.

  Mr. Eggar
  A system of performance-related funding is being established to give an incentive for good and progressively better performance by TECs in achieving objectives. A bonus fund equal to 2 per cent. of overall programme funds will be allocated to TECs achieving specified levels of performance in particular areas of activity.

  Mr. McLeish
  To ask the Secretary of State for Employment what provision for employers' contributions to ET are in the operational budgets, included in the TEC contracts; and if he will make a statement.

  Mr. Eggar
  It is in employers' interests that they should increasingly contribute towards the cost of employment training, as many employers already do. Employment training funding levels for TECs assume continuing employer contributions.

  Mr. McLeish
  To ask the Secretary of State for Employment what representations have been received 64
  from training and enterprise council board members about the level of expenditure being approved for programmes; and if he will make a statement.

  Mr. Eggar
  I have received a number of representations from training and enterprise council board members on funding issues. TECs will receive agreed resources to implement their plans and my officials are currently negotiating with individual TECs about the resources that will be made available.

  Labour Statistics
  Mr. McLeish
  To ask the Secretary of State for Employment (1) if he will give the total number of employees in(a) manufacturing, (b) services and (c) all industries and services in Great Britain and each of the standard regions in (i) June 1979 and (ii) June 1989; and what was the figure between the two years in (1) numbers and (2) percentage;

  (2) what was the number of employees in employment in Great Britain in each of the standard regions in (a) June 1979 and (b) June 1989; and what is the difference between the two years in (i) numbers and (ii) percentage;

  (3) what was the number of people in employment excluding Her Majesty's forces in Great Britain and each of the standard regions in (a) June 1989 and (b) June 1979; and what was the change in (i) numbers and (ii) as a percentage;

  (4) what was the total number of (a) male and (b) female employees in employment, self-employment, Her Majesty's forces and work-related Government training in Great Britain and each of the standard regions in (i) June 1979 and (ii) June 1989; (or work related training June 1983); and what are the differences between the two years in (1) numbers and (2) percentage;

  (5) what was the total number of part-time and full-time employees in employment and self-employment in Great Britain and each of the standard regions in (a) June 1979 and (b) June 1989; and what was the difference between the two years in (i) numbers and (ii) percentage;

  (6) what was the total number of people in work-related Government training in Great Britain and each of the standard regions in (a) June 1983 and (b) June 1989; and what were the differences between the two years in (i) numbers and (ii) percentage;

  (7) what was the total number of self-employed in Great Britain and each of the standard regions in (a) June 1979 and (b) June 1989; and what was the difference between the two years in (i) numbers and (ii) percentage;

  (8) what was the total work force in employment in (a) June 1979 and (b) June 1989; and what is the change between the two years in (i) numbers and (ii) percentage;

  (9) what is his estimate of the numbers of self-employed in (a) manufacturing industries, (b) services and (c) all industries and services for Great Britain and each standard region in (i) June 1979 and (ii) June 1989.

  Mr. Nicholls
  The hon. Member has asked a number of related questions. As the answers involve a considerable number of statistical tables, I will write to the hon. Member and place a copy of my letter in the Library.

  Mr. McLeish
  To ask the Secretary of State for Employment if he will give the total number of YTS trainees or youth equivalent included in the employees in employment in Great Britain and for each standard region
  65
  in (a) June 1979 and (b) June 1989; and what is the change between the years in (i) numbers and (ii) percentage.

  Mr. Nicholls
  The employees in employment figures include only those trainees who have contracts of employment. The table gives the number of such trainees on YTS in each region in June 1989. None of the trainees on the youth opportunities programme in 1979 had contracts of employment, and therefore comparisons between 1979 and 1989 either in real terms or percentage terms is not possible.

  Number of trainees with contracts of employment

  Region

  Number

  Scotland

  8,000

  Northern

  5,000

  North West

  15,000

  Yorkshire and Humberside

  12,000

  Midlands

  10,000

  Wales

  4,000

  South West

  7,000

  All persons in employment1 with a second job as employee, by region spring estimates, thousands and per cent.

  Estimated Change

  1979

  21989

  1979

  21989

  Region

  Thousands

  Thousands

  Thousands

  3Per cent.]

  Great Britain

  289

  708

  419

  144·8

  Northern

  12

  38

  26

  205·8

  Yorkshire and Humberside

  25

  57

  32

  128·8

  East Midlands

  28

  53

  26

  92·6

  East Anglia

  12

  30

  18

  147·0

  South East of Which

  90

  222

  132

  146·7

  -Greater London

  37

  68

  32

  86·5

  South West

  25

  70

  44

  174·6

  West Midlands

  23

  75

  52

  224·7

  North West

  36

  76

  39

  109·1

  Wales

  11

  31

  20

  171·1

  Scotland

  26

  56

  30

  115·9

  1 Includes employees, the self-employed and persons in government employment and training programmes. In 1979 it was not possible to separately identify persons on government programmes and only those who stated they were in employment in the week before interview are included in the above totals.

  2 Preliminary estimates (1989 only)

  3 Calculated using unrounded estimates.

  Source: labour force surveys.

  Mr. McLeish
  To ask the Secretary of State for Employment what was the total numbers of jobs which would be discounted if all full-time equivalence factors used by the European Community were applied to part-time jobs in(a) June 1979 and (b) June 1989.

  Mr. Nicholls
  We do not believe in discounting part-time jobs. Furthermore, the apparent method of calculating full-time equivalents set out in the European Commission report "Employment in Europe" is an inappropriate measure of labour input.

  Unemployment rates by highest qualifications held2 for people of working age, by sex and region: spring 1979 and 1989

  Persons aged 16-59/643

  Per cent.

  Region of residence

  Spring 1979

  Spring 19894

  Level of highest qualification helds5

  All Persons

  Males

  Females

  All Persons

  Males

  Females

  Great Britain

  All6

  5·6

  4·9

  6·7

  7·4

  7·5

  7·2

  GCE A level or equivalent or higher

  2·9

  2·4

  4·3

  4·6

  4·3

  5·1

  Other qualification

  5·1

  4·4

  5·6

  7·2

  7·1

  7·3

  No formal qualification

  7·0

  6·9

  7·2

  11·6

  13·7

  9·1

  Northern

  All6

  8·7

  9·0

  8·3

  11·5

  13·1

  9·4

  66

  Region

  Number

  South East

  15,000

  London

  7,000

  East Midlands and Eastern

  13,000

  Great Britain Total

  96,000

  Mr. McLeish
  To ask the Secretary of State for Employment what was the total number of those with a second job as an employee in Great Britain and each of the standard regions in(a) June 1979 and (b) June 1989; and what is the difference between the two years in (i) numbers and (ii) percentage.

  Mr. Nicholls
  Estimates of persons with a second job are available only from labour force surveys, conducted in the spring of each year.

  Estimates from the 1979 and 1989 labour force surveys, as requested, are shown in the table:

  Mr. McLeish
  To ask the Secretary of State for Employment what was the unemployment rate by highest qualification and sex for Great Britain and each standard region for(a) spring 1979 and (b) spring 1989.

  Mr. Nicholls
  Final estimates from the 1979 labour force survey and preliminary estimates from the 1989 labour force survey are shown in the following table.
  67

  Region of residence

  Spring 1979

  Spring 19894

  Level of highest qualification held5

  All Persons

  Males

  Females

  All Persons

  Males

  Females

  GCE A level or equivalent or higher

  4·7

  4·8

  1

  6·9

  7·9

  1

  Other qualification

  7·1

  1

  7·5

  12·2

  13·7

  10·9

  No formal qualification

  11·3

  13·6

  8·6

  16·7

  22·0

  11·5

  Yorkshire and Humberside

  All6

  6·0

  5·1

  7·6

  8·7

  9·4

  7·7

  GCE A level or equivalent or higher

  2·8

  2·6

  1

  4·6

  4·5

  4·9

  Other qualification

  5·1

  1

  6·0

  8·8

  9·1

  8·5

  No formal qualifications

  7·4

  6·9

  8·0

  14·1

  18·7

  9·0

  East Anglia

  All6

  4·8

  3·8

  6·4

  6·8

  6·8

  6·9

  GCE A level or equivalent or higher

  2·5

  1

  1

  4·1

  3·3

  6·2

  Other qualification

  5·4

  1

  6·3

  6·6

  6·5

  6·6

  No formal qualification

  5·3

  4·8

  6·0

  10·4

  13·0

  7·6

  South East

  A116

  4·5

  3·5

  6·1

  4·2

  3·5

  5·2

  GCE A level or equivalent or higher

  1

  1

  1

  2·6

  1

  1

  Other qualification

  5·9

  1

  1

  3·7

  1

  1

  No formal qualification

  4·7

  1

  1

  7·0

  7·3

  1

  —Greater London

  All6

  4·1

  3·0

  5·8

  4·0

  3·5

  4·8

  GCE A level or equivalent or higher

  2·3

  1·5

  4·8

  2·5

  1·9

  3·7

  Other qualification

  3·8

  2·9

  4·6

  4·5

  3·7

  5·2

  No formal qualification

  4·6

  3·6

  5·8

  6·1

  6·8

  5·4

  —South East (exc. Greater London)

  All6

  4·1

  3·3

  5·3

  5·3

  5·0

  5·7

  GCE A level or equivalent or higher

  2·3

  1·8

  3·7

  3·4

  3·0

  4·3

  Other qualification

  3·8

  3·1

  4·5

  5·3

  4·6

  5·8

  No formal qualification

  4·9

  4·2

  5·8

  8·6

  9·6

  7·3

  South West

  All6

  4·1

  3·7

  4·7

  7·3

  7·4

  7·1

  GCE A level or equivalent or higher

  2·3

  2·3

  1

  4·9

  4·8

  5·1

  Other qualification

  3·9

  3·4

  4·3

  6·6

  6·3

  6·8

  No formal qualification

  5·3

  4·9

  5·7

  12·5

  13·7

  10·8

  West Midlands

  All6

  5·3

  4·7

  6·2

  5·3

  5·3

  5·4

  GCE A level or equivalent or higher

  2·7

  2·1

  1

  3·7

  3·3

  4·7

  Other qualification

  5·0

  5·7

  4·4

  5·4

  4·5

  6·1

  No formal qualification

  6·1

  5·7

  6·7

  7·7

  10·0

  5·0

  North West

  All6

  5·2

  4·7

  5·9

  7·7

  7·1

  8·5

  GCE A level or equivalent or higher

  2·2

  1

  1

  4·5

  3·6

  6·6

  Other qualification

  4·6

  1

  5·0

  8·1

  7·9

  8·3

  No formal qualification

  6·1

  6·0

  6·2

  10·7

  11·2

  10·1

  Wales

  All6

  6·9

  6·3

  7·7

  9·9

  10·5

  9·1

  GCE A level or equivalent or higher

  3·1

  2·8

  1

  6·0

  6·1

  5·9

  Other qualification

  5·4

  4·7

  6·0

  9·7

  10·7

  8·9

  No formal qualification

  8·9

  9·8

  8·0

  15·6

  18·5

  12·3

  Scotland

  All6

  7·1

  6·1

  8·8

  9·8

  10·1

  9·3

  GCE A level or equivalent or higher

  3·6

  1

  1

  6·9

  7·2

  6·2

  Other qualification

  6·2

  1

  7·6

  8·0

  7·5

  8·4

  No formal qualification

  9·4

  8·9

  10·0

  14·8

  16·2

  12·9

  68 69
  Source: LFS estimates.

  1 Less than 10,000 in cell: estimates not shown.

  2 Based on the Great Britain labour force definition of unemployment (which broadly uses a one-week job search period). The unemployment rate for each qualification level/sex/region category is calculated as the numbers unemployed in the category as a proportion of all economically active persons in the category.

  3 The upper age limit is 64 for males and 59 for females.

  4 Preliminary estimates (1989 only).

  5 A finer breakdown of qualification levels is not given, as many more of the table entries would then be based on small samples and would not be shown.

  6 Includes persons not stating their highest qualification held, and for 1979 only, all persons in full time education and all males aged 60 to 64 (who were not asked about their highest qualification levels).

  Training
  Mr. McLeish
  To ask the Secretary of State for Employment if he will give the estimated amount of expenditure on ET and YTS in each of the years 1988–89 and 1989–90.

  Mr. Nicholls
  The expenditure on YTS and employment training by the employment department group Training Agency (and its predecessor the Training Commission) is as follows:

  YTS (£m)

  ET (£m)

  1988–89 (actual)

  993·8

  425·0

  1989–90 (forecast)

  983·0

  1,112·0

  The YTS figures exclude community industry (included under the heading "Youth Training" in the public expenditure White Paper, evaluation, research and development, and marketing).

  Employment training figures exclude the employment rehabilitation service (included under the heading "Training for Unemployed Adults" in the public expenditure White Paper).

  Mr. McLeish
  To ask the Secretary of State for Employment if he will make a statement on the "Community Action Programme for the Development of Continuing Vocational Training", Com (89) 567 final, of 8 December 1989.

  Mr. Nicholls
  This European Commission proposal aims to support and complement activities developed by and in member states in the area of continuing vocational training. An explanatory memorandum was submitted to the Commons Select Committee on European Legislation on 31 January 1990. The text is currently being negotiated at official level and the proposal is expected to be considered by the European Community Labour and Social Affairs Council on 29 May 1990.

  Mr. Vaz
  To ask the Secretary of State for Employment, further to his answer to the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) of 15 March,Official Report, column 340, if he will give the regional breakdown of the number of young people over 18 years on YTS with special training needs endorsements; and if he will make a further statement.

  Mr. Corbett
  To ask the Secretary of State for Employment, pursuant to his answer to the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) of 15 March,Official Report, column 340, on young people undertaking the youth training scheme with special training needs endorsement, if he will break down the figures given by region.
  70
  Mr. Nicholls
  The following table gives the number of young people in training on YTS at 31 December 1989 who were aged 18 and over and had special training needs endorsements.

  Region

  Number

  Scotland

  1,600

  Northern

  1,800

  North West

  2,900

  Yorkshire and Humberside

  2,000

  West Midlands

  1,400

  East Midlands and East

  1,400

  Wales

  1,200

  South West

  800

  South East

  1,300

  London

  1,500

  Total

  15,900

  (All figures rounded to the nearest hundred).

  Action for Jobs Campaign
  Mr. Terry Davis
  To ask the Secretary of State for Employment how much of the total expenditure on the Action for Jobs campaign in 1987–88 was spent on regional campaigns.

  Mr. Eggar
  Expenditure on Action for Jobs regional campaigns in 1987–88 was £1.4 million.

  YTS Allowance
  Mr. Corbett
  To ask the Secretary of State for Employment what plans he has to introduce an increase in the YTS allowance, age-related for 18-year-olds and over, in line with the principles set in April 1988 for income support claimants when rate liability was introduced.

  Mr. Nicholls
  I refer the hon. Member to the reply I gave to the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) on 15 March 1990,Official Report, column 340.

  Population Statistics
  Mr. McLeish
  To ask the Secretary of State for Employment what was the total number of people by highest qualification held, and by sex, for Great Britain and each of the standard regions in(a) spring 1979 and (b) spring 1989.

  Mr. Nicholls
  Final estimates from the 1979 labour force survey and preliminary estimates from the 1989 labour force survey are shown in the table.
  71

  Highest qualification held by people of working age, by sex and region: spring 1979 and 1989

  Persons aged 16—59/642

  Thousands

  Spring 1979

  Spring 19893

  Region of residence

  Level of highest qualification held

  All persons

  Males

  Females

  All persons

  Males

  Females

  Great Britain

  A114

  31,966

  16,619

  15,347

  33,851

  17,657

  16,194

  Degree or equivalent

  1,687

  1,245

  443

  2,659

  1,728

  931

  Higher education below degree

  1,540

  530

  1,010

  1,897

  763

  1,134

  GCE A level or equivalent

  5,601

  4,385

  1,215

  8,137

  5,785

  2,352

  GCE O level or equivalent

  3,566

  1,309

  2,258

  5,983

  2,299

  3,684

  CSE below grade 1

  1,187

  471

  715

  1,616

  712

  904

  Other qualification

  1,236

  423

  812

  2,433

  1,175

  1,257

  No formal qualification

  14,019

  6,059

  7,960

  10,827

  5,017

  5,810

  Northern

  All4

  1,840

  956

  884

  1,872

  979

  893

  Degree or equivalent

  69

  53

  16

  91

  61

  30

  Higher education below degree

  87

  34

  53

  95

  37

  58

  GCE A level or equivalent

  349

  296

  54

  458

  360

  98

  GCE O level or equivalent

  155

  55

  100

  305

  107

  199

  CSE below grade 1

  73

  29

  45

  117

  51

  66

  Other qualification

  63

  16

  47

  126

  68

  58

  No formal qualification

  877

  356

  522

  662

  286

  376

  Yorkshire and Humberside

  All4

  2,863

  1,493

  1,370

  2,992

  1,564

  1,429

  Degree or equivalent

  109

  80

  30

  187

  122

  64

  Higher education below degree

  120

  41

  79

  171

  75

  96

  GCE A level or equivalent

  463

  393

  70

  695

  516

  180

  GCE O level or equivalent

  265

  99

  166

  502

  193

  310

  CSE below grade 1

  100

  36

  64

  135

  58

  78

  Other qualification

  109

  41

  68

  227

  116

  111

  No formal qualification

  1,429

  617

  811

  1,044

  465

  579

  East Midlands

  All4

  2,225

  1,159

  1,067

  2,457

  1,289

  1,168

  Degree or equivalent

  88

  69

  19

  146

  99

  48

  Higher education below degree

  109

  35

  74

  136

  63

  73

  GCE A level or equivalent

  379

  303

  76

  563

  414

  150

  GCE O level or equivalent

  246

  88

  158

  418

  156

  262

  CSE below grade 1

  86

  36

  50

  152

  66

  87

  Other qualification

  93

  36

  57

  190

  102

  88

  No formal qualification

  1,021

  452

  569

  831

  377

  453

  East Anglia

  All4

  1,091

  580

  511

  1,227

  637

  590

  Degree or equivalent

  47

  36

  10

  109

  67

  42

  Higher education below degree

  50

  19

  31

  61

  23

  38

  GCE A level or equivalent

  181

  145

  35

  275

  201

  74

  GCE O level or equivalent

  131

  51

  80

  224

  83

  141

  CSE below grade 1

  45

  19

  26

  67

  28

  39

  Other qualification

  56

  23

  33

  99

  50

  50

  No formal qualification

  485

  216

  270

  376

  178

  198

  South East

  All4

  9,965

  5,170

  4,795

  10,629

  5,528

  5,101

  Degree or equivalent

  713

  514

  199

  1,205

  769

  436

  Higher education below degree

  506

  166

  340

  601

  234

  367

  GCE A level or equivalent

  1,717

  1,256

  462

  2,442

  1,667

  775

  GCE O level or equivalent

  1,249

  474

  775

  2,061

  817

  1,244

  CSE below grade 1

  411

  168

  244

  496

  219

  277

  Other qualification

  415

  147

  268

  825

  377

  447

  No formal qualification

  3,912

  1,728

  2,184

  2,922

  1,396

  1,526

  —Greater London

  All4

  4,096

  2,096

  2,000

  4,158

  2,150

  2,008

  Degree or equivalent

  337

  230

  107

  616

  378

  238

  Higher education below degree

  193

  49

  144

  206

  70

  136

  GCE A level or equivalent

  618

  429

  189

  890

  589

  301

  GCE O level or equivalent

  499

  193

  306

  739

  297

  443

  CSE below grade 1

  148

  63

  85

  151

  62

  89

  Other qualification

  150

  57

  93

  352

  157

  195

  No formal qualification

  1,696

  767

  929

  1,176

  580

  595

  —South East (excluding Greater London)

  All4

  5,869

  3,074

  2,795

  6,471

  3,378

  3,093

  Degree or equivalent

  375

  284

  91

  589

  391

  198

  Higher education below degree

  313

  117

  196

  395

  164

  231

  72 73

  Spring 1979

  Spring 19893

  Region of residence Level of highest qualification held

  All persons

  Males

  Females

  All persons

  Males

  Females

  GCE A level or equivalent

  1,099

  827

  273

  1,552

  1,078

  474

  GCE O level or equivalent

  749

  280

  469

  1,321

  520

  801

  CSE below grade 1

  263

  105

  159

  345

  156

  188

  Other qualification

  265

  90

  175

  473

  220

  253

  No formal qualification

  2,216

  961

  1,255

  1,746

  816

  930

  South West

  All4

  2,461

  1,287

  1,175

  2,758

  1,428

  1,329

  Degree or equivalent

  123

  92

  31

  173

  118

  55

  Higher education below degree

  118

  40

  78

  179

  75

  104

  GCE A level or equivalent

  447

  350

  97

  679

  485

  193

  GCE O level or equivalent

  305

  110

  195

  537

  203

  333

  CSE below grade 1

  106

  46

  61

  161

  70

  90

  Other qualification

  104

  38

  66

  190

  91

  99

  No formal qualification

  1,003

  429

  574

  821

  376

  445

  West Midlands

  All4

  3,081

  1,613

  1,468

  3,206

  1,692

  1,515

  Degree or equivalent

  109

  83

  26

  175

  119

  56

  Higher education below degree

  118

  44

  74

  148

  66

  83

  GCE A level or equivalent

  429

  348

  80

  697

  501

  196

  GCE O level or equivalent

  304

  111

  193

  514

  205

  309

  CSE below grade 1

  125

  53

  72

  190

  83

  107

  Other qualification

  102

  34

  68

  229

  114

  115

  No formal qualification

  1,615

  739

  877

  1,215

  585

  630

  North West

  All4

  3,797

  1,967

  1,830

  3,858

  2,018

  1,840

  Degree or equivalent

  193

  148

  45

  253

  170

  82

  Higher education below degree

  204

  81

  123

  209

  91

  118

  GCE A level or equivalent

  661

  538

  123

  950

  694

  256

  GCE O level or equivalent

  420

  152

  268

  664

  246

  418

  CSE below grade 1

  142

  52

  90

  194

  88

  107

  Other qualification

  138

  43

  95

  268

  124

  144

  No formal qualification

  1,671

  693

  978

  1,282

  584

  698

  Wales

  All4

  1,621

  842

  779

  1,721

  899

  822

  Degree or equivalent

  75

  56

  19

  96

  63

  33

  Higher education below degree

  85

  26

  59

  97

  32

  65

  GCE A level or equivalent

  251

  209

  42

  355

  256

  99

  GCE O level or equivalent

  191

  71

  119

  302

  109

  193

  CSE below grade 1

  61

  24

  37

  87

  43

  44

  Other qualification

  61

  19

  43

  130

  68

  62

  No formal qualification

  732

  322

  410

  640

  318

  323

  Scotland

  All4

  3,021

  1,552

  1,469

  3,132

  1,624

  1,508

  Degree or equivalent

  161

  113

  48

  225

  140

  85

  Higher education below degree

  143

  44

  100

  199

  68

  131

  GCE A level or equivalent

  724

  547

  177

  1,024

  692

  331

  GCE O level or equivalent

  301

  98

  203

  457

  182

  275

  CSE below grade 1

  36

  1

  27

  18

  1

  10

  Other qualification

  95

  27

  68

  148

  66

  82

  No formal qualification

  1,274

  507

  766

  1,034

  452

  582

  Sources: 1979 final and 1989 preliminary LFS estimates.
  1 Less than 10,000 in cell: estimate not shown.
  2 The upper age limit is 64 for males and 59 for females.
  3 Preliminary estimates (1989 only).
  4 Includes persons not stating highest qualification held, and for 1979 only, all persons in full time education and all males aged 60 to 64 (who were not asked about their highest qualification levels).

SOCIAL SECURITY

  Mobility Allowance
  Mr. Hannam
  To ask the Secretary of State for Social Security (1) what representations he has received from the mobility allowance campaign concerning the criteria for extending the mobility allowance to deaf-blind people;

  (2) what representations he has received from the mobility allowance campaign concerning the eligibility criteria for deaf-blind people for mobility allowance;
  74
  (3) when his Department last met the mobility allowance campaign; and when it next intends to do so.

  Mr. Scott
  The campaign has made representations on several occasions, and letters have been sent in recent weeks to the Department and to my right hon. Friend the Secretary of State. Officials will be meeting representatives of the campaign and other organisations on 26 March, and I shall be writing to the campaign following those discussions.
  75
  Mr. Hannam
  To ask the Secretary of State for Social Security (1) whether in drawing up the eligibility criteria for extension of mobility allowance to deaf-blind people, he has consulted the mobility allowance campaign;

  (2) which organisations his Department has consulted when formulating the eligibility criteria for deaf-blind people to mobility allowance.

  Mr. Scott
  We were aware of the views of the campaign about the eligibility criteria for the extension of mobility allowance to deaf-blind people.

  Community Charge
  Mr. Austin Mitchell
  To ask the Secretary of State for Social Security (1) if he will introduce measures to raise the level of support available to people on income support in respect of community charge liabilities;

  (2) if he will make special one off payments to those people on income support living in areas where the community charge will be over £315.

  Mr. Kirkwood
  To ask the Secretary of State for Social Security if he will increase income support payments to claimants to cover 20 per cent. of the actual national average of the community charge of £350 as against the notional national average of 20 per cent. of £278.

  Mrs. Gillian Shephard
  Income support levels were adjusted on a once-for-all basis in April 1989 to include help towards the average 20 per cent. contribution to the community charge. The amounts included now form part of the overall benefit levels, which are of course being uprated next month.

  Mr. Austin Mitchell
  To ask the Secretary of State for Social Security what estimates his Department has regarding the number of people on income support who will be worse off under the community charge because the local charge is higher than the figure allowed for in the 20 per cent. uprating.

  Mrs. Gillian Shephard
  The information requested is not available.

  Income Support
  Mr. Austin Mitchell
  To ask the Secretary of State for Social Security what is the number of people receiving income support at the present time.

  Mrs. Gillian Shephard
  A total of 4·3 million claimants were receiving income support in August 1989, the latest date for which information is available.

  Maintenance Payments
  Mr. Boswell
  To ask the Secretary of State for Social Security what action he has taken to improve the payment of maintenance by absent parents; and what further action he proposes.

  Mr. Newton
  From October 1989, we extended the absent parent's liability to maintain to cover dependent children aged 16, 17 and 18. I have also already announced that from next month we are strengthening the basis on which DSS local offices assess absent parents' ability to pay maintenance.

  I now propose some further changes in the law, to improve the way in which the present system works and in
  76
  particular to tackle some of the problems which lone parents themselves face in regard to the making and enforcement of maintenance orders.

  I intend to bring forward an amendment to the present Social Security Bill to give courts the power to make an order for recovery of benefit which can have regard to the income support personal allowance of the mother even where she is divorced or was never married. This will recognise her costs as child carer, and bring social security law more into line with family law.

  I also intend to bring forward two further amendments to improve the working of maintenance orders themselves. The first will propose that DSS be given power to transfer to the lone parent an order which it has obtained, if she leaves benefit. This eliminates the need for her to make a fresh application for a maintenance order and means that she can take the maintenance for the child with her, if she wishes to go to work, thus reducing what has often been held to be a discouragement. The second will propose that DSS be given a power to seek enforcement of a claimant's own maintenance order if the absent parent fails to pay. These changes will reduce the need for the lone parent to take court action herself.

  "Show You Care"
  Mr. Ashley
  To ask the Secretary of State for Social Security if he will ensure that all training courses for social security officials include a showing of the National Speak Week video, "Show You Care."

  Mrs. Gillian Shephard
  We are grateful to the right hon. Member for raising this matter. To ensure the National Speak Week video is seen by the widest possible audience of social security officials, we are arranging for copies of the video, and the accompanying notes, to be distributed to every local office. Managers will be encouraged to use the material during the many and varied training sessions which are held in those offices.

  War Widows
  Mr. Alfred Morris
  To ask the Secretary of State for Social Security how many war widows died in December 1989 and in January and February 1990; and if he has any information on the number of war widows who have died in March 1990.

  Mrs. Gillian Shephard
  The numbers notified as at 21 March are:

  Number

  1989

  December

  416

  1990

  January

  250

  February

  160

  March

  5

  Mr. Alfred Morris
  To ask the Secretary of State for Social Security, further to the Parliamentary Under-Secretary of State's reply to the right hon. Member for Manchester, Wythenshawe, on 25 October 1989 what is the number of war widows who died in the year 1989.

  Mrs. Gillian Shephard
  The number of war widows who died in the year ended 31 December 1989 was 3,169.

  Student Loans
  Mr. Ashley
  To ask the Secretary of State for Social Security what consultations his Department has had with organisations representing deaf people and organisations representing disabled students concerning the draft proposals for Social Security Benefits (Student Loans) Amendment Regulations and the definition used for disabled student.

  Mrs. Gillian Shephard
  The Social Security Benefits (Student Loans) Amendment Regulations have been referred to the Social Security Advisory Committee which is currently consulting a variety of organisations including, we understand, organisations representing the interests of deaf and disabled people.

  Residential Homes
  Mr. Madden
  To ask the Secretary of State for Social Security (1) if he will make it his policy, when reviewing the arrangements for determining his Department's rates applying to those living in private residential care, to ensure that those rates are not negotiated by his Department's staff, or local authority staff, who hold direct or indirect financial interests in such private residential homes;

  (2) what rules apply to his Department's staff holding direct or indirect financial interests in private residential or nursing homes; and whether his Department's staff are required to register such financial interests for public inspection.

  Mrs. Gillian Shephard
  Central rules provide that civil servants must not put private interests before their duty to the state or put themselves in a position where duty and private interests conflict or make use of their official position to further those interests. Officers who have occasion to deal in an official capacity with any matter in which they have a private interest, are required to disclose that interest to a senior officer and ask that some other officer deals with the matter.

  Additionally, in DSS, staff having significant face-to-face contact with the public are not normally permitted to undertake any private activity within the area covered by their office.

  However, provided management is satisfied that it would be proper to do so, permission may exceptionally be given for staff to hold a financial interest in private residential or nursing homes if there are no more than six long-stay residents and the officer undertakes to produce and keep up to date a list of residents' names so that management may ensure that the officer has no official dealings with the home or its residents.

  Taper System
  Mr. David Nicholson
  To ask the Secretary of State for Social Security if he will list in the Official Report any revisions he is making in the taper system for income support, family credit, housing benefit and community charge rebate, following the Chancellor's announcement of the increased savings threshold.

  Mr. Scott
  We believe that the present rules for taking account of capital holdings strikes the right balance between ensuring that state benefits are available to those with the greatest need and that personal thrift is not 78
  discouraged. We shall monitor carefully the effects of the changes to the upper capital limit to ensure this balance is maintained. The community charge benefit taper, whereby benefit entitlement is reduced by 15p for every £1 of income in excess of the applicable amount, is more generous than with the former rate rebate scheme.

  Social Fund
  Mr. McLeish
  To ask the Secretary of State for Social Security if he will give the numbers of applications(a) received and (b) approved for budgeting loans and crisis loans in each of the social security offices in Dunfermline, Kirkcaldy, Leven and Cowdenbeath for each month in 1989.

  Mr. Scott
  The information is in the Library.

  Mr. McLeish
  To ask the Secretary of State for Social Security what is(a) the estimated expenditure on social fund budgeting and crisis loans and (b) the actual expenditure for each month between January 1989 and December 1989 inclusive for the Leven, Dunfermline, Cowdenbeath and Kirkcaldy Social Security offices.

  Mr. Scott
  The information given in the table represents the spending profile set at the start of each financial year for each office requested. The profile is adjusted at the end of each month to take account of actual expenditure and can be adjusted at any time to take account of local circumstances. Information for actual spending is in the Library.

  Community Care Grants per cent.

  Loans per cent.

  Leven

  1989

  January

  7·87

  7·87

  February

  9·19

  9·19

  March

  9·40

  9·40

  April

  7·93

  7·93

  May

  8·33

  8·33

  June

  8·33

  8·33

  July

  8·33

  8·33

  August

  8·33

  8·33

  September

  8·02

  8·02

  October

  8·88

  8·88

  November

  8·89

  8·89

  December

  7·75

  7·75

  Dunfermline

  1989

  January

  7·87

  7·87

  February

  9·19

  9·19

  March

  9·40

  9·40

  April

  7·93

  7·93

  May

  8·33

  8·33

  June

  8·33

  8·33

  July

  8·33

  8·33

  August

  8·33

  8·33

  September

  8·02

  8·02

  October

  8·88

  8·88

  November

  8·89

  8·89

  December

  7·75

  7·75

  Cowdenbeath

  1989

  January

  7·78

  7·78

  February

  9·19

  9·19

  March

  9·40

  9·40

  April

  7·93

  7·93

  May

  8·33

  8·33

  June

  8·33

  8·33

  79

  Community Care Grants

  Loans

  per cent.

  per cent.

  July

  8·33

  8·33

  August

  8·33

  8·33

  September

  8·02

  8·02

  October

  8·88

  8·88

  November

  8·89

  8·89

  December

  9·09

  9·09

  Kirkcaldy

  1989

  January

  7·89

  7·89

  February

  9·19

  9·19

  March

  9·40

  9·40

  April

  7·93

  7·93

  May

  8·33

  8·33

  June

  8·33

  8·33

  July

  8·33

  8·33

  August

  8·33

  8·33

  September

  8·02

  8·02

  October

  8·88

  8·88

  November

  8·89

  8·89

  December

  7·75

  7·75

  Mr. Wareing
  To ask the Secretary of State for Social Security what percentage of income support recipients are now having deductions made from benefit as a result of paying back social fund loans(a) nationally, (b) regionally and (c) in each local Department of Social Security office area.

  Mr. Scott
  [pursuant to his reply, 23 February 1990, c. 938-45]: The information for those offices in the London North region was found to be incorrect. The corrected information is given in the table.

  London North Region

  Per cent.

  Acton

  5·63

  Aylesbury

  3·67

  Banbury

  5·69

  Barking

  4·43

  Barnet

  4·32

  Basildon

  5·97

  Bedford

  4·68

  Braintree

  3·88

  Bury St. Edmunds

  3·42

  Cambridge

  11·33

  Canning Town

  8·59

  Chelmsford

  7·14

  Clacton

  3·05

  Colchester

  5·78

  Cricklewood

  19·68

  Diss

  1·81

  Dunstable

  1·11

  Ealing

  3·18

  Edgware

  7·03

  Edmonton

  3·09

  Euston

  4·69

  Finsbury Park

  6·42

  Grays

  8·92

  Great Yarmouth

  6·72

  Hackney

  9·36

  Harlesden

  10·53

  Harlow

  3·03

  Harrow

  3·13

  Hemel Hempstead

  2·66

  Hendon

  6·53

  Hertford

  3·97

  Highgate

  6·43

  High Wycombe

  4·17

  Hoxton

  9·89

  Ilford

  4·22

  Ipswich

  5·05

  Kings Lynn

  4·47

  Leytonstone

  6·50

  80

  London North Region

  Per cent.

  Lowestoft

  6·85

  Luton

  8·36

  Milton Keynes

  7·86

  Neasden

  6·23

  Norwich (C)

  6·10

  Norwich (M)

  7·71

  Notting Hill

  8·79

  Oxford

  7·94

  Paddington

  3·32

  Peterborough

  10·17

  Plaistow

  6·82

  Poplar

  7·68

  Romford

  3·88

  St. Albans

  4·80

  Shoreditch

  8·73

  Southall

  8·97

  Southend

  4·94

  Stepney

  5·81

  Stevenage

  6·24

  Thames North

  3·21

  Tottenham

  10·40

  Uxbridge

  5·58

  Walthamstow

  6·68

  Watford

  5·38

  Woodgrange Park

  9·75

  Wood Green

  7·33

  Housing Benefit (Students)
  Mr. Meacher
  To ask the Secretary of State for Social Security if he will give calculations used to determine the student deduction as applied to student housing benefit claims; whether the student deduction as applied to student housing benefit claims is related to any index of housing costs; and what is the amount he intends to uprate the student deduction by for the 1990–91 academic year.

  Mrs. Gillian Shephard
  The amount of the rent deduction applied to student housing benefit claims is determined on the basis of figures provided by the Department of Education and Science. The level of the rent deduction for the 1990–91 academic year will be determined on the same basis and will be known shortly.

  Mr. Meacher
  To ask the Secretary of State for Social Security if he will state his reasons(a) for removing student entitlement to housing benefit and (b) for removing student entitlement to income support during periods of unemployment.

  Mrs. Gillian Shephard
  The Government believe that full-time students should be supported by the educational maintenance system and not by social security benefits. Access to benefits by students has been an unplanned product of social security changes over the last two decades, creating a disproportionate administrative burden on local offices and local authorities. The proposed new student loans and access funds will provide additional forms of support making it unnecessary for the majority of full-time students to have access to housing benefit and income support.

  Additionally, we believe that it is inappropriate to treat students as unemployed when they are following a full-time course of study. Benefits for the unemployed are intended to provide financial support for people who are normally reliant on earnings when they face the unforeseen contingency of unemployment. Periods of study, and vacations between periods of study, cannot be classed as days of unemployment in the same way.
  81
  Mr. Meacher
  To ask the Secretary of State for Social Security what is(a) the total value and average weekly payment of housing benefit currently being claimed by claimants aged 18 to 24 years, (b) the total value of housing benefit paid to students in the academic year 1988–89 in each region of the country and (c) the projected number of claims for housing benefits, their total value and the average size of weekly claim in 1990 in each region of the country.

  Mrs. Gillian Shephard
  Information is not available in the detail requested. The average weekly amount of housing benefit for claimants aged 18 to 24, who were not also in receipt of income support, was £11·70 in May 1988. Similar information for claimants receiving both income support and housing benefit is not held. Housing benefit spending on claimants who are aged 18 to 24 is not identifiable within total expenditure.

  Information on housing benefit paid to students is not available in the form requested and I refer the hon. Member to my reply to him on 5 March at column 535.

  Spending plans and caseload estimates are on a Great Britain basis and for 1990–91 it is estimated that £4·6 billion in housing benefit will go to 4·2 million households. Average weekly amounts are not projected and deriving such amounts from the expenditure and caseload estimates does not produce a representative result.

  Invalid Care Allowance
  Mr. Meacher
  To ask the Secretary of State for Social Security what is his estimate of the number who would benefit each year if people receiving invalid care allowance were eligible for unemployment benefit when those they care for die, go into residential care or to hospital; and what would be the yearly cost.

  Mrs. Gillian Shephard
  Only those former carers who have received invalid care allowance for a period in excess of two and a half to three years would fail to qualify for unemployment benefit by virtue of a lack of recently paid national insurance contributions. As the average duration of invalid care allowance is approximately two years, most former carers who claim unemployment benefit qualify for it. Details of the numbers who fail to qualify for unemployment benefit are not available.

  Disabled Students
  Mr. Ashley
  To ask the Secretary of State for Social Security whether all disabled students will retain entitlement to social security benefits following introduction of the loans scheme.

  Mrs. Gillian Shephard
  Disabled students will retain entitlement to most social security benefits on the same basis as now, including attendance allowance and mobility allowance. We propose that those students who meet the criteria for the disability premium will continue to be eligible for income support and housing benefit. Students who have received income support as a disabled student prior to the introduction of the new arrangements in the next academic year, will also retain eligibility to these benefits. We further propose that all full-time students will be excluded from unemployment benefit.

  Local Government Finance (Rebates)
  Mr. Dewar
  To ask the Secretary of State for Social Security if he will bring forward proposals to backdate the increase in capital exemptions for poll tax rebates announced in the Budget to cover Scotland in 1989–90; and if he will make a statement.

  Mrs. Gillian Shephard
  My right hon. and learned Friend, the Secretary of State for Scotland, has announced a scheme of ex-gratia payments which will benefit an estimated 15,000 to 20,000 individual chargepayers. The scheme will be administered and paid for by my right hon. and learned Friend's Department.

  Mr. Home Robertson
  To ask the Secretary of State for Social Security how many people in Scotland had savings between £8,000 and £16,000 which had the effect of restricting their entitlement to income support and to poll tax rebate in 1989–90; and what the cost of such income support and rebates would be for those figures.

  Mrs. Gillian Shephard
  It is estimated that some 15,000 to 20,000 individual chargepayers in Scotland in 1989–90, may have had, or shared, capital of between £8,000 and £16,000 which would have disentitled them from community charge rebates. The cost may have been up to £4 million. No estimates for income support are available.

  Rates (Ex Gratia Payment)
  Mr. Marlow
  To ask the Secretary of State for Social Security if he will make ex gratia payments to pensioners with limited savings in Northampton who did not receive a rate rebate in 1989–90.

  Mrs. Gillian Shephard
  Rate rebates were available to pensioners and others with savings of up to £8,000 in 1989–90. This limit will be doubled to £16,000 for rent rebates and allowances, and for the new community charge benefit, from April 1990. The new limit will not be retrospective.

  Nuclear Test Veterans
  Mr. Carrington
  To ask the Secretary of State for Social Security what arrangements exist for compensating through the war pensions scheme ex-service men who took part in the British nuclear weapons test programme who subsequently developed cancerous diseases; and if he will make a statement.

  Mrs. Gillian Shephard
  It is open to any ex-service man who suffers disablement which he considers to be due to service to make a claim for war pension.

  As regards the British nuclear test programme, the rigorous safety precautions adopted were such that only a small proportion of the participants could have been exposed specifically to ionising radiation and that those who were exposed received only small radiation doses. Consequently the Government are confident that no one should have suffered harm as a result of exposure to ionising radiation.

  However, in view of the concern which some participants had expressed in this matter, the Government commissioned in 1983 the independent National Radiological Protection Board to undertake a study of the health of the participants, investigating whether it showed any correlation with radiation exposure. Its report, published in 1988, concluded:

  83
  "small hazards of leukaemia and multiple myeloma may well have been associated with participation in the tests, but that such participation has not otherwise had a detectable effect on the participants' expectation of life or on their total risk of developing cancer."

  Although the report showed a slight increase in the rate of occurrences of multiple myeloma and leukaemia, other than chronic lymphatic leukaemia, it did not establish any firm evidence of a causal relationship between increased incidence of any cancers and participation in the test programme.

  Proof, however, is not essential for a claim to succeed under the war pensions scheme. There only needs to be reliable evidence which raises a reasonable doubt whether a condition is caused or aggravated by service. The Department's doctors are satisfied that the report's evidence does raise sufficient doubt in the case of participants suffering from multiple myeloma or leukaemia (other than chronic lymphatic leukaemia). Any claim to a war pension by such service men or the widows of such service men is therefore likely to succeed, and seven awards have been made.

  The Report by the NRPB included data up to 1 January 1984. The NRPB has advised that, in order to provide a reliable assessment of the further accumulated data for the period 1 January 1984 to 1 January 1989, it would be necessary to conduct a full-scale validation and analysis exercise. In the light of this advice, my right hon. Friend the Secretary of State for Defence has set in hand a further study by the NRPB. I understand that it hopes to be in a position to report its findings by the end of 1991.

  We shall await the NRPB's further report with interest and we shall take full account of the findings to the extent that they provide any additional information which might affect participants' entitlement to war pensions.

ENERGY

  Coal Imports
  Mr. Alan W. Williams
  To ask the Secretary of State for Energy what forecast he has made for the likely level of coal imports in the year 2000.

  Mr. Baldry
  We do not make such forecasts.

  Mr. Skinner
  To ask the Secretary of State for Energy what are the latest figures for imported coal into Britain(a) by countries of origin and (b) amounts in each case.

  Mr. Baldry
  The latest information is as follows:

  Quantity1

  (thousand tonnes)

  Country of origin

  Calendar year 1989

  January 1990

  United States of America

  4,874

  376

  Australia

  2,676

  324

  Poland

  1,055

  63

  Colombia

  874

  45

  Canada

  729

  184

  China

  450

  1

  South Africa

  346

  12

  Federal Republic of Germany

  259

  32

  Netherlands

  200

  112

  USSR

  181

  9

  Panama

  106

  —

  Venezuela

  86

  —

  Belgium

  78

  13

  Norway

  58

  3

  84

  Country of origin

  Calendar year 1989

  January 1990

  France

  50

  —

  Other countries

  116

  21

  Total

  12,137

  1,194

  of which:

  coking coal

  7,998

  825

  steam coal

  3,374

  291

  anthracite

  765

  78

  1Figures are rounded independently and totals may therefore differ from the sum of their constituent parts.

  Source: Her Majesty's Customs and Excise.

  Mr. Buckley
  To ask the Secretary of State for Energy what is his most up-to-date estimate of the level of imports of coal in 1990, 1991 and 1992.

  Mr. Baldry
  We do not make such estimates.

  Renewable Energy
  Mr. Livsey
  To ask the Secretary of State for Energy what percentage of power generation originates from renewable sources.

  Mr. Peter Morrison
  In 1989, about 2 per cent. of electricity was generated from renewable sources in Great Britain.

  Mr. Wray
  To ask the Secretary of State for Energy what specific measures Her Majesty's Government are carrying out to encourage research, and operation of, wind, solar and other alternative sources of energy.

  Mr. Peter Morrison
  The Government are supporting a major research and development programme aimed at developing commercially viable and environmentally acceptable renewable energy technologies to contribute to future energy supply.

  Mr. Butler
  To ask the Secretary of State for Energy what is his latest assessment of the potential of wind-generated electricity in the United Kingdom.

  Mr. Peter Morrison
  The most recent estimate of the potential of wind-generated electricity in the United Kingdom was published in energy paper No. 55, copies of which are in the Libraries of the House. The extent to which this renewable source of energy might be developed commercially within environmental constraints is not yet known, but energy paper No. 55 has estimated that by the year 2025 wind energy might provide up to 30 TWh per year of electricity which represents about 10 per cent. of current electricity requirements.

  Mr. Mans
  To ask the Secretary of State for Energy what initiatives his Department is taking to develop commercially viable and environmentally acceptable forms of renewable technology.

  Mr. Peter Morrison
  The Government are supporting a major research and development programme aimed at developing commercially viable and environmentally acceptable renewable energy technologies to contribute to future energy supply.

  Bankside Power Station
  Mr. Corbyn
  To ask the Secretary of State for Energy what is his most up-to-date estimate of the capital value of Bankside power station.
  85
  Mr. Wakeham
  The estimated value of this site is commercially confidential.

  Miss Hoey
  To ask the Secretary of State for Energy what representations he has received regarding the future use of Bankside power station.

  Mr. Wakeham
  My Department has received representations on behalf of one project.

  Mr. Tony Banks
  To ask the Secretary of State for Energy what representations he has received regarding the ownership of Bankside power station and Sudbury house.

  Mr. Wakeham
  I am consulting the CEGB and those other parties which have a locus under the provisions of the Electricity Act 1989 about my proposed modifications to the board's transfer scheme, including the reallocation to Nuclear Electric of the Bankside power station site and Sudbury house.

  Electricity Privatisation
  Mr. McAvoy
  To ask the Secretary of State for Energy what is his most up-to-date estimate of the gross Exchequer costs of electricity supply industry privatisation.

  Mr. Wakeham
  It is too early to make any estimate of the likely gross costs of privatising the electricity supply industry, but the costs will be small in comparison with the proceeds.

  Mr. Illsley
  To ask the Secretary of State for Energy what consultations he has had with the European Commissioner for competition in relation to the privatisation of the electricity supply industry.

  Mr. Wakeham
  I and my Department have had a number of discussions with the Commission on electricity privatisation.

  Mr. Charles Wardle
  To ask the Secretary of State for Energy what representations he has received from large consumers of electricity about his plans for privatisation of the electricity industry.

  Mr. Baldry
  My right hon. Friend continues to receive representations on electricity privatisation from a wide range of interested parties.

  Low-sulphur Coal
  Mr. Cummings
  To ask the Secretary of State for Energy what is his most-up-to-date estimate of the level of imports of low-sulphur coal in 1990, 1991 and 1992.

  Mr. Wakeham
  We do not make such estimates.

  Home Insulation
  Mr. Cox
  To ask the Secretary of State for Energy what plans he has to review the amount of grant now paid towards home insulation; and if he will make a statement.

  Mr. Peter Morrison
  My right hon. Friend is taking powers in the Social Security Bill which, if approved, will lead to the introduction of a new scheme of grants for energy efficiency measures in low-income households. The amount of grant payable to an individual applicant under the scheme will depend upon the work undertaken; the allowable maximum still has to be settled.

  Carbon Dioxide Emissions
  Mr. Jack
  To ask the Secretary of State for Energy what steps he is taking to reduce United Kingdom emissions of carbon dioxide from power stations.

  Mr. Wakeham
  My Department's programmes to promote energy efficiency and renewable energy and our support of nuclear power will all help to reduce future emissions of CO2. The non-fossil fuel obligation on the privatised electricity supply industry will further promote the development of technologies which do not emit CO2.

  Mr. Ray Powell
  To ask the Secretary of State for Energy when he expects to(a) publish and (b) achieve CO2 emission reduction targets for the energy sector.

  Mr. Peter Morrison
  The United Kingdom, along with other industrialised nations, was a party to the Noordwijk declaration on atmospheric pollution and climatic change in November 1989, which stated that emissions of greenhouse gases, including carbon dioxide, should be stabilised at a level and on a time scale to be considered by the intergovernmental panel on climate change and by the second world climate conference in November 1990. That remains the position.

  Mr. Speller
  To ask the Secretary of State for Energy what is the level of carbon dioxide emission reductions in the United Kingdom estimated to be possible by 2005 and 2020 due to energy efficiency, renewable energy sources, nuclear power, or the increased use of natural gas.

  Mr. Peter Morrison
  An indication of the extent to which some technical options in isolation can contribute to reducing carbon dioxide emissions together with their associated costs is provided in the study (chapter 5), "An Evaluation of Energy—related Greenhouse Gas Emissions and Measures to Ameliorate Them". Further consideration of the economic costs of the various options will need to be made in due course.

  Lead-free Petrol
  Mr. Hind
  To ask the Secretary of State for Energy what proportion of petrol sold in Britain is lead-free; and if he will make a statement.

  Mr. Peter Morrison
  Currently about 30 per cent. of petrol sold is unleaded. This is an increase from 4 per cent. in January 1989.

  Mr. Tredinnick
  To ask the Secretary of State for Energy what has been the increase in the consumption of unleaded petrol in the east midlands in the last six months; and how many petrol pumps have been converted for unleaded petrol.

  Mr. Peter Morrison
  Regional information on the consumption of unleaded petrol is not available centrally. However, United Kingdom deliveries of unleaded petrol increased by 23 per cent. between July 1989 and January 1990, from 23 per cent. of total petrol deliveries in July 1989 to 30 per cent. in January 1990.

  No information is available on how many petrol pumps have been converted for unleaded petrol, but the Institute of Petroleum estimates that over 90 per cent. of retail petrol outlets now sell unleaded petrol.

  Nottinghamshire Coalfield
  Mr. Brandon-Bravo
  To ask the Secretary of State for Energy what has been the rate of productivity growth in the Nottinghamshire coalfield.

  Mr. Baldry
  I refer my hon. Friend to the answer that I gave to my hon. Friend the Member for Sherwood (Mr. Stewart) earlier today.

  Flue Gas Desulphurisation
  Mr. Redmond
  To ask the Secretary of State for Energy what representations he has received regarding the completion of the flue gas desulphurisation programme of the Central Electricity Generating Board.

  Mr. Wakeham
  I have received a number of representations on this, mainly as a result of misunderstandings about the requirements of the EC large combustion plants directive.

  Mr. Hardy
  To ask the Secretary of State for Energy what is his estimate of the date by which flue gas desulphurisation will be in operation at each of the power stations in England and Wales which are of 1,500 MW capacity or more.

  Mr. Baldry
  The EC large combustion plants directive -to which the Government are fully committed-does not require every station to be so fitted. The FGD plant at Drax is expected to come fully on stream by the end of 1996.

  Mr. Hardy
  To ask the Secretary of State for Energy what reasons have been given to the member states of the Community with regard to the delay in the provision of desulphurisation equipment at the larger power stations.

  Mr. Baldry
  The Government are committed to achieving the reductions in emissions specified in the EC large combustion plants directive. There has been no delay in planning to meet this commitment. The fitting of flue gas desulphurisation equipment to power stations will play an important part in achieving the emissions reductions required by the directive. Contracts have already been placed for FGD at the 4GW Drax power station and further retrofits are in prospect. Other measures will also contribute.

  Gas Transmission (North Sea)
  Mr. Salmond
  To ask the Secretary of State for Energy if he has had any recent applications for delivery transmission systems, for gas, in the North sea; and if he will make a statement.

  Mr. Peter Morrison
  No formal applications of this kind have been received recently.

  Energy Conservation
  Mr. Cyril D. Townsend
  To ask the Secretary of State for Energy what new measures are being put forward by the Government to encourage energy conservation in the home and place of work.

  Mr. Peter Morrison
  The Energy Efficiency Office is continuing to promote energy efficiency in the domestic, commercial and industrial sectors through a number of 88
  programmes aimed at energy consumers, professional advisers and decision makers. Recent initiatives include the best practice programme, which aims to provide authoritative and targeted information on a wide range of energy efficiency measures and applications, and the proposed new scheme of grants for insulation measures in the homes of those on low incomes.

  Nuclear Electric
  Mr. Frank Cook
  To ask the Secretary of State for Energy what representations he has received regarding the allocation of Central Electricity Generating Board property to Nuclear Electric plc.

  Dr. Kim Howells
  To ask the Secretary of State for Energy what representations he has received about the allocation of Central Electricity Generating Board land at Druridge bay and Pembroke to Nuclear Electric plc.

  Mr. Baldry
  I have received representations from interested parties, including hon. Members.

  Mr. McCartney
  To ask the Secretary of State for Energy what representations he has received regarding the assets and liabilities of Nuclear Electric.

  Mr. Baldry
  My hon. Friend laid a minute before the House on 6 March relating to Nuclear Electric's financial position. Some Members have signed an early-day motion objecting to the minute. I have received various representations on other matters.

  Mr. Harry Barnes
  To ask the Secretary of State for Energy what is his most up-to-date valuation of the assets and liabilities of proposed Nuclear Electric plc.

  Mr. Baldry
  Nuclear Electric will inherit assets and liabilities from the CEGB on vesting day. The latest valuation is reflected in the CEGB's report and accounts for 1988–89, a copy of which is in the Library. The company will review the valuations before the publication of its own accounts later in the year.

  Energy Efficiency
  Mr. Barry Field
  To ask the Secretary of State for Energy what energy savings targets have been set in connection with the various initiatives being undertaken by the Energy Efficiency Office.

  Mr. Peter Morrison
  Targets for the Energy Efficiency Office's programmes are set out in chapter 5, paragraphs 44 to 46 of the 1990 Public Expenditure White Paper (Cm. 1005).

  Mr. Beith
  To ask the Secretary of State for Energy if he has made an assessment of the environmental implications resulting from the reduction in real terms of the budget of the Energy Efficiency Office.

  Mr. Peter Morrison
  The Energy Efficiency Office's activities have always been targeted to maximise their effectiveness in stimulating improvements in energy efficiency. Such improvements are not only economically attractive but environmentally beneficial.

  Mr. Malcolm Bruce
  To ask the Secretary of State for Energy if he has any plans to increase the budget of the Energy Efficiency Office.
  89
  Mr. Peter Morrison
  The budget of the Energy Efficiency Office is being substantially increased in 1990–91 to accommodate expenditure under the proposed home energy efficiency scheme. Powers for the new scheme, which will offer grants towards the cost of insulation measures in low income households, are included in the Social Security Bill currently before Parliament.

  Mrs. Gorman
  To ask the Secretary of State for Energy if he will abolish the Energy Efficiency Office.

  Mr. Peter Morrison
  No.

  Electricity Prices
  Mr. Murphy
  To ask the Secretary of State for Energy what representations he has received regarding the rise in electricity prices from 1 April 1990.

  Mr. Baldry
  My right hon. Friend has received a number of representations about electricity prices.

  Mr. Flynn
  To ask the Secretary of State for Energy whether he has made an estimate of the contribution of the rises in domestic electricity prices in April 1990 to the retail prices index.

  Mr. Baldry
  It is estimated that the increases in electricity prices effective from April 1990 should add between 0·20 per cent. and 0·25 per cent. to the retail prices index once the tariffs have been fully implemented.

  Mr. Morgan
  To ask the Secretary of State for Energy whether he has discussed the implications of articles 85 and 86 of the treaty of Rome for the new pricing structure of the electricity supply industry of England and Wales with the European Commissioner responsible for competition, in respect of(a) domestic and (b) industrial consumers.

  Mr. Baldry
  The European Commission has been kept fully informed of all aspects of the Government's proposals for electricity privatisation.

  National Power
  Mr. Mullin
  To ask the Secretary of State for Energy what consultations he is carrying out regarding the appointment of the chairman of National Power.

  Mr. Wakeham
  I am carrying out such consultations as I consider appropriate.

  Mr. Pike
  To ask the Secretary of State for Energy what discussions he has had with the chairman of National Power regarding possible generation of electricity using gas.

  Mr. Wakeham
  I meet the chief executive of National Power regularly to discuss many aspects of his business.

  Oil and Gas Exploration
  Mr. Bowis
  To ask the Secretary of State for Energy what is his estimate of the likely level of drilling on the United Kingdom continental shelf in 1990.

  Mr. Arbuthnot
  To ask the Secretary of State for Energy what is his estimate of the likely level of drilling on the United Kingdom continental shelf in 1990.
  90
  Mr. Peter Morrison
  A recent survey of company intentions by my Department showed that a record number of more than 200 exploration and appraisal wells could be drilled in the United Kingdom continental shelf this year.

  Mr. Rowe
  To ask the Secretary of State for Energy what plans he has for the reduction of the number of fallow blocks on the United Kingdom continental shelf in 1990.

  Mr. Tim Smith
  To ask the Secretary of State for Energy what plans he has for the reduction of the number of fallow blocks on the United Kingdom continental shelf in 1990.

  Mr. Peter Morrison
  As I indicated in my reply on. 26 February to my hon. Friends the Members for Maidstone (Miss Widdecombe) and for Broxtowe, (Mr. Lester), I am pressing forward with the fallow block initiative. I will be keeping in close touch through 1990 with the licensees concerned, and I will be encouraging them to continue the good progress made in 1989 in reducing the number of fallow blocks.

  Mr. Ian Taylor
  To ask the Secretary of State for Energy how many significant discoveries of oil and gas were made on the United Kingdom continental shelf during 1989.

  Mr. Wood
  To ask the Secretary of State for Energy how many significant discoveries of oil and gas were made on the United Kingdom continental shelf during 1989.

  Mr. Roger King
  To ask the Secretary of State for Energy how many significant discoveries of oil and gas were made on the United Kingdom continental shelf during 1989.

  Mr. Peter Morrison
  Twenty-nine significant discoveries, comprising nine of oil, 13 of gas, four of oil and gas, two of gas and condensate and one of condensate were made on the United Kingdom continental shelf in 1989, the highest total in any one year since offshore activity began in 1964.

  Mr. Page
  To ask the Secretary of State for Energy how many of the wells drilled on the United Kingdom continental shelf have been drilled(a) since 1964 and (b) since 1979.

  Mr. Peter Morrison
  I refer my hon. Friend to the reply I gave to my hon. Friend the Member for Dulwich (Mr. Bowden) earlier today.

  Electricity Supply
  Mr. Dykes
  To ask the Secretary of State for Energy when he next proposes to discuss reciprocal electricity supplies sharing and purchase arrangements between EEC member states with his counterparts in the Council of Energy Ministers.

  Mr. Wakeham
  Sharing and purchase arrangements for electricity supplies within the Community are for the electricity industries. However, the Energy Council on 21 May is likely to consider the Commission proposal for a directive on electricity transit. The directive seeks to reduce barriers to transit and thus promote interstate trade in electricity.

  British Coal
  Mr. Hardy
  To ask the Secretary of State for Energy when he last met the chairman of British Coal; and what were the principal matters which were discussed.

  Mr. Wakeham
  I meet the chairman of British Coal regularly to discuss all aspects of the coal industry.

  Mr. Patchett
  To ask the Secretary of State for Energy what is his most up-to-date estimate of the numbers employed by British Coal in 1990, 1991 and 1992.

  Mr. Allen McKay
  To ask the Secretary of State for Energy what is his most up-to-date estimate of the manpower figures for British Coal in 1990–91.

  Mr. Baldry
  The Government do not make estimates of future manpower levels in British Coal. Such levels depend on a number of factors, including the corporation's continued ability to raise its competitiveness.

  Mr. Janman
  To ask the Secretary of State for Energy how much the Government have invested in British Coal since 1979.

  Mr. Baldry
  Since 1979 the Government have invested over £6·5 billion in the coal industry and continue to invest at a rate of over £2 million every working day.

  Offshore Energy Industry
  Mr. Wilshire
  To ask the Secretary of State for Energy what has been the level of employment in the offshore oil and gas industry in each of the years from 1983 to 1989.

  Mr. Sumberg
  To ask the Secretary of State for Energy what has been the level of employment in the offshore oil and gas industry in each of the years from 1983 to 1989.

  Mr. Peter Morrison
  I refer my hon. Friend to the answer I gave to my hon. Friend the Member for Calder Valley (Mr. Thompson) earlier today.

  Mr. Hayward
  To ask the Secretary of State for Energy what was the level of capital investment in the North sea in 1989; and what are the prospects for 1990.

  Mr. Peter Morrison
  I refer my hon. Friend to the answer I gave to my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) on 16 March,Official Report, column 397.

  Dr. Michael Clark
  To ask the Secretary of State for Energy when he last met the chairman of the United Kingdom Offshore Operators Association; and what was discussed.

  Mr. Peter Morrison
  My right hon. Friend the Secretary of State and I meet the representatives of the United Kingdom Offshore Operators Association (UKOOA) regularly to discuss matters of mutual interest.

  Electricity Undertakings (Property)
  Mr. Cousins
  To ask the Secretary of State for Energy what is the proposed proportion of property assets to total assets of(a) Nuclear Electric, (b) National Power, (c) PowerGen and (d) the National Grid Company.
  92
  Mr. Baldry
  The Central Electricity Generating Board submitted on 12 March a scheme for transferring all the board's property, rights and liabilities to successor companies. Subject to my approval and any modifications this scheme will come into force on 31 March. My Department is now considering the board's scheme, which is commercially confidential, and is undertaking the consultations called for by statute.

  Landfill Gas Schemes
  Mr. William Powell
  To ask the Secretary of State for Energy how many landfill gas schemes are in operation.

  Mr. Peter Morrison
  Currently, 35 landfill gas schemes are operational and a further 30 are being planned. The estimate of current energy savings is 150,000 tonnes coal equivalent per annum (tcepa). Of the existing schemes, 13 are generating electricity with a capacity of 16 MW.

  National Union of Mineworkers
  Mr. Riddick
  To ask the Secretary of State for Energy if he has any plans to meet the president of the National Union of Mineworkers.

  Mr. Wakeham
  I am always happy to meet officers of the coal mining unions at their request.

  National Society for Clean Air
  Mr. Simon Hughes
  To ask the Secretary of State for Energy when he last met representatives from the National Society for Clean Air; and what matters were discussed.

  Mr. Peter Morrison
  I have had no meetings with the National Society for Clean Air.

  Nuclear Reactors (Accidents)
  Mr. John Evans
  To ask the Secretary of State for Energy what consultations his Department has recently had to improve emergency planning procedures to deal with a civil nuclear reactor accident.

  Mr. Baldry
  The Department regularlyconsults organisations concerned with all aspects of civil nuclear emergency planning. This is done under the auspices of the nuclear emergency planning liaison group, which brings together representatives of Government Departments, the Health and Safety Executive's nuclear installations inspectorate (NII) the National Radiological Protection Board, nuclear operators, the police, local authorities and the fire service. My Department is also a member of the nuclear emergency arrangements forum where matters of common interest are discussed between the nuclear operators, the NII and Government Departments. In addition, the Department participates in ad-hoc meetings with various organisations from time to time to consider particular aspects of planning.

  Electricity Bill Estimates
  Mr. Speller
  To ask the Secretary of State for Energy how many complaints he has received from consumer organisations over the practice of electricity boards estimating fuel use when access to meters is readily available.

  Mr. Baldry
  The Department of Energy receives representations from consumer organisations from time to time on a wide range of issues including estimated billing. However, this is a matter for the industry.

  Coal Contracts
  Mr. Meale
  To ask the Secretary of State for Energy when he expects to receive the notification of approval or otherwise from the European Commission regarding the coal contracts agreed between British Coal and National Power and PowerGen.

  Mr. Wakeham
  I hope that the Commission will be able to respond favourably in due course to the arrangements notified to it.

  Lord Marshall of Goring
  Mr. Colvin
  To ask the Secretary of State for Energy when he last met Lord Marshall of Goring in his capacity as chairman of the CEGB; and what was discussed.

  Mr. Wakeham
  I met Lord Marshall regularly as chairman of the CEGB. The discussions at such meetings are confidential.

  Cornwall Energy Project
  Mr. Matthew Taylor
  To ask the Secretary of State for Energy what support has been given to the Cornwall energy project.

  Mr. Peter Morrison
  My Department has contributed 25 per cent. of the cost—some £80,000—to the Cornwall energy project conducted by Cornwall county council.

  National Grid Company
  Mr. Stern
  To ask the Secretary of State for Energy if he can yet estimate the extent to which industrial energy producers will increase their rates to the National Grid Company after privatisation.

  Mr. Baldry
  Prices will depend on market conditions and the specific details of any relevant contracts.

  Gas and Electricity Prices
  Mr. Teddy Taylor
  To ask the Secretary of State for Energy if he will make a statement on(a) the percentage increase and (b) the real increase in the price of gas and electricity over the past five years.

  Mr. Wakeham
  The increases for domestic and industrial consumers are shown in the following tables:

  Domestic Sector

  Percentage changes between the 4th quarter of 1984 and the 4th quarter of 1989

  Current prices

  Deflated prices1

  Gas

  +11

  -15

  Electricity

  +21

  -8

  1 Deflated using the GDP (market prices) deflator. The GDP deflator for the 4th quarter of 1989 has been estimated using the change in the retail prices index (all items).

  Source: Fuel price indices published in Tables 19 and 20 of Energy Trends.

  Industrial sector

  Percentage changes between the 3rd quarter of 1984 and the 3rd quarter of 1989

  Current prices

  Deflated prices1

  Gas

  -20

  -39

  Electricity

  +18

  - 9

  94
  1 Deflated using the GDP (market prices) deflator. The GDP deflator for the 4th quarter of 1989 has been estimated using the change in the retail prices index (all items).

  Source: Fuel price indices published in tables 19 and 20 of Energy Trends.

  Chemical Spillages (North Sea)
  Mr. Malcolm Bruce
  To ask the Secretary of State for Energy how many complaints there have been regarding spillages or discharges of chemicals from North sea oil and gas installations over the last five years.

  Mr. Peter Morrison
  There have been no complaints concerning spillages or discharges of chemicals from North Sea oil and gas installations over the last five years.

  However, following the Piper Alpha incident, several queries were received concerning the PCBs present in equipment on the installation.

  Mr. Malcolm Bruce
  To ask the Secretary of State for Energy how many prosecutions there have been for the spillage or discharge of chemicals from North sea oil and gas installations over the last five years.

  Mr. Peter Morrison
  There have been no prosecutions for spillage or discharge of chemicals from North sea oil and gas installations over the last five years.

  Nuclear Industry (Work-related Diseases)
  Mr. Vaz
  To ask the Secretary of State for Energy what representations he has received, and from whom, concerning employees in the nuclear industry and work-related diseases; and if he will make a statement.

  Mr. Baldry
  I have received a number of representations from the public and from Members of this House concerning this matter.

  Natural Gas
  Mr. Speller
  To ask the Secretary of State for Energy what is the current production of natural gas from the United Kingdom sector of the North sea in million tonnes of oil equivalnt; and what is the projected use of natural gas by 2005 and 2020 outlined in the range of scenarios produced in the study "An Evaluation of Energy-related Greenhouse Gas Emissions and Measures to Ameliorate Them".

  Mr. Peter Morrison
  Gas production from United Kingdom fields in 1988—the last year for which full data is available—was approximately 39 million tonnes oil equivalent (MTOE). Primary gas demand in the study referred to was estimated to range between 59 and 100 MTOE in 2005 and between 72 and 169 MTOE in 2020. This range of estimates was based on price assumptions provided by the International Energy Agency.

  Greenhouse Effect
  Mr. Speller
  To ask the Secretary of State for Energy to whom the departmental study for the IPCC "An Evaluation of Energy-related Greenhouse Gas Emissions and Measures to Ameliorate Them", has been circulated for peer review external to the Department.

  Mr. Peter Morrison
  The study has not been subject to formal peer review. It was undertaken at the specific request of the energy and industry subgroup of the
  95
  response strategies working group of the IPCC, and given to it at the end of November 1989. In the preparation of the study, a number of groups within and outside Government were consulted, and some provided input. Much of the data used was from published sources.

  The Department's advisory council on R and D for fuel and power (ACORD) will discuss the study shortly.

  Mr. Speller
  To ask the Secretary of State for Energy whether he has any plans to update the departmental study for the IPCC "An Evaluation of Energy-related Greenhouse Gas Emissions and Measures to Ameliorate Them", to include new information and data, and to take account of critical reviews received since its publication.

  Mr. Peter Morrison
  I have no plans to update this study. It was carried out as a response to a specific request from the energy and industry subgroup of the response strategies working group of the IPCC for material to assist the work of that subgroup. The work of the subgroup is expected to be completed before the end of April.

  Sizewell
  Dr. Thomas
  To ask the Secretary of State for Energy what were the original overall costs for the development programme at Sizewell; and what are his latest projected costs figures.

  Mr. Baldry
  The Sizewell B project was sanctioned by the CEGB on 1 April 1987 at a cost of £1,691 million. The board's most recent estimate, derived from evidence given to the Hinkley Point C inquiry in September 1989, is £1,870 million at 1987 prices.

  French Nuclear Power Stations
  Mr. Hardy
  To ask the Secretary of State for Energy (1) if either the French Government or Electricite de France have informed him of any risk or failure at nuclear power stations situated on or near the northern coast of France;

  (2) if he will consult both the French Government and Electricité de France to ensure that arrangements exist for notificaion in case of serious risk or failure at northern nuclear power stations in France;

  (3) what discussions he has had with the French Government or with Electricité de France in regard to the safety of nuclear power stations that are close to the northern coast of France.

  Mr. Baldry
  There are continuing contacts between my officials and those of the Health and Safety Executive's nuclear installations inspectorate and their French counterparts.

  The nuclear installations inspectorate has an exchange of information arrangement with the French nuclear safety regulatory body—Service Central de Sureté des Installations Nucléaires (SCSIN)—which includes the exchange of safety-related information.

  There is no reason to suppose that the standards of safety adopted by the French are any less rigorous than those applied in the United Kingdom.

  Arrangements already exist, under a bilateral treaty with the French Government, for Her Majesty's Government to be notified of any accidental release of radioactivity from a
  96
  French nuclear installation. In addition, the French Government are a party to the early international notification arrangements established by the International Atomic Energy Agency and the European Community.

  An independent means of detecting and monitoring any abnormal increases in environmental radioactivity of the kind which might stem from an overseas nuclear accident is provided by the radioactive incident monitoring network (RIMNET).

  Magnox Fuel
  Dr. Thomas
  To ask the Secretary of State for Energy what is the volume of intermediate-level waste that is generated due to the reprocessing of spent fuel for each of the fuel types Magnox, advanced gas reactor and pressurised water reactor.

  Mr. Baldry
  I understand from British Nuclear Fuels plc that the volumes of intermediate level wastes, conditioned for disposal, generated from the reprocessing of spent fuel are approximately as follows:2·00 cubic metres per tonne of uranium of Magnox fuel reprocessed.
  2·25 cubic metres per tonne of uranium of advanced gas reactor fuel reprocessed.
  1·25 cubic metres per tonne of uranium of pressurised water reactor fuel reprocessed.

  Dr. Thomas
  To ask the Secretary of State for Energy (1) what are the countries of origin for foreign Magnox fuel that has been reprocessed in the United Kingdom;

  (2) what is the tonnage of foreign Magnox fuel which has been reprocessed in this country, for each country of origin, for each of the years from 1965 to 1990, inclusive; and what are the projected tonnages to 1999.

  Mr. Baldry
  For the tonnages of civil spent fuel which have been reprocessed in this country, I refer the hon. Member to the answers given by the hon. Member for Midlothian (Mr. Eadie) to the hon. Member for Livingston (Mr. Cook) on 27 May 1977 at column 626, by my hon. Friend the Member for Eddisbury (Mr. Goodlad) to the hon. Member for Islington, South and Finsbury (Mr. Smith) on 11 December 1985 at columns 638-39 and by my hon. Friend the Member for Worcestershire, South (Mr. Spicer) on 1 February 1988 at columns 473-74. Some 10 per cent. of these quantities have been Magnox spent fuel from Italy or Japan. Quantities for future years are dependent upon reactor life times.

  Estate Agents
  Mr. Dobson
  To ask the Secretary of State for Energy what factors he takes into account in deciding whether to appoint estate agents as advisers in major privatisations.

  Mr. Wakeham
  In any privatisation it is important to ensure that the property portfolios are properly documented and valued. This is the role of the valuers which the hon. Member chooses to describe as estate agents. It is a fundamental step in the process of establishing a realistic valuation of the undertaking as a whole and obtaining value for the assets in proceeds. This is consistent with the advice of the National Audit office to the Public Accounts Committee.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers — Read by the Lord Bishop of Chelmsford.

Rating: UBR and Sports Clubs
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
What effect the uniform business rate will have on amateur and professional sports clubs.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): My Lords, in 1990–91 the average rate bills for sports grounds, sports stadia, playing fields and club houses in England will increase by 2·5 per cent.
Lord Dean of Beswick:My Lords, is the Minister aware that I am rather surprised at the figure of 2–5 per cent.? The Question on the Order Paper is broadly based, and I hope that he and other noble Lords will understand if at this point I restrict myself to the part which refers to amateur sports. If one takes a broad base of amateur sports, including rugby union, association football, bowls, tennis and athletics, is the Minister aware that the increase is a minimum of 200 per cent. and in some cases over 300 per cent.? Bearing in mind that the Government appear to be rethinking some of the sums that must be paid by people under both the unified business rate and the poll tax, will he ask his right honourable friend the Secretary of State whether in reviewing the other areas of concern regarding the new financial arrangements he will take on board some of the discrepancies that appear to have occurred with regard to sporting clubs in general?
Lord Hesketh: My Lords, the most substantial percentage increase on broad groupings— it is difficult to describe a grouping— concerns golf courses, swimming pools and tennis facilities, whose bills will rise on average by 20–5 per cent. For leisure and sports centres, the average increase will be 30 per cert. However, it is important to remember that local authorities will continue to have discretion to grant up to 100 per cent. rate relief on property occupied by non-profit-making bodies.
Lord Mackie of Benshie: My Lords, is the Minister aware that the rates on sports clubs in Scotland have been very much higher than those in England for many years past? In the light of recent developments in government thinking, does he propose to do anything about that now?
Lord Hesketh: My Lords, there are many differences between England and Scotland, which include the rating of sports facilities. In addition, Scotland has a different poundage to that in England,
566
which automatically leads to different levels of rate payable. It is the Government's policy to harmonise the system of rating of sports facilities, bringing Scotland into line with England and Wales. Progress is being made, but it is a complex issue.
Lord Mulley: My Lords, I welcome the fact that the Minister's right honourable friend the Chancellor of the Exchequer is finding money for the improvement of sports grounds. However, does he not think it a little odd that that is being done by way of remitting tax to one body in order that it should give it to another? Will he at least ask his right honourable friend whether should the negotiations with the pools promoters fail, they will find other means of paying the grant that they have in mind to improve football grounds?
Lord Hesketh: My Lords, I am grateful to the noble Lord for pointing out the tremendous contribution that my right honourable friend the Chancellor of the Exchequer will make to the improvement of football grounds due to the changes that he suggested in the Budget. Many of the revaluations have taken place because, as noble Lords will be aware, many football grounds have introduced highly successful commercial boxes. It is only right and proper that that should be reflected in the revaluation.
Lord Stallard: My Lords, given that some clubs will be hard hit by any further increases in expenditure, how long will they have to appeal against those revaluations?
Lord Hesketh: My Lords, clubs are in exactly the same position as any other building which is liable for the UBR.
Lord Graham of Edmonton: My Lords, does the Minister accept that there was a general welcome for the way in which football clubs have been assisted in order to enable them to put their grounds in order following the Taylor Report? However, one does not want to give with one hand and take away with the other. Like my noble friend Lord Dean, I was pleasantly surprised to be told how minimal the addition is likely to be under the unified business rate by comparison with the old rating system. Will the Minister at least inquire of such representative bodies as the CCPR, the Sports Council and the Football Association whether they are as concerned as we are at the likely impact on their ability to improve and extend sport following the introduction of the unified business rate?
Lord Hesketh: My Lords, the noble Lord raises a good question. The average rate bill for football grounds, including inflation but before transition, will fall by 11 per cent., which I am sure, as a keen football follower, he will be pleased about. I thought that the noble Lord might raise that point this afternoon, and I am pleased to report to him that the Spurs will be looking at a reduction from £ 137,000 to £ 87,000 before transitional relief.
Lord Hatch of Lusby: My Lords, the noble Lord has given the figure of 2.5 per cent. However, he no doubt recognises as well as the rest of us that it is an overall figure. Is he aware that there are many amateur sporting clubs of various kinds which will be in grave danger of going out of business because of the difference between the rates which they now pay and the new business rate? Do the Government intend to give any help or relief to such sports clubs?
Lord Hesketh: My Lords, all sports clubs are in exactly the same position as other UBR-payers. They will be in receipt of transitional relief if there is an upward revaluation.
Lord Dean of Beswick: My Lords, does the Minister know that I too am aware that under the new arrangements the local authority can give discretionary grant? However, does he agree that it is only a discretionary grant and the local authority, if it is very hard put to it, may not be able to give any grant at all? Will the Minister ask the Secretary of State, in the general review of the new financial arrangements, to consider the adverse effects that the new financial arrangements are having on sport in general but mainly at this point in time on amateur clubs, which may well go out of existence?
Lord Hesketh: My Lords, I shall be more than happy to receive any information that the noble Lord cares to give me concerning particular cases and draw them to the attention of my right honourable friend.

Independent Television Commission: Pensions
2.43 p.m.
Lord Aylestone Lord Aylestone asked Her Majesty's Government:
Whether the proposed Independent Television Commission is intended to continue to pay retirement pensions in line with public sector pensions as is done at present by the Independent Broadcasting Authority.
The Minister of State, Home Office (Earl Ferrers): My Lords, under the Government's proposals, employees of the Independent Broadcasting Authority and Cable Authority who are transferred to the Independent Television Commission will have their pension rights protected, as will existing pensioners of the authorities.
Lord Aylestone: My Lords, I thank the Minister for his reply. I should like to make it clear that I am not concerned financially with this matter but my former colleagues are. Is the noble Earl quite satisfied that under the proposals of the ITC, which will become the principal employer, present IBA employees will be no worse off financially than they are now; that is to say, that their pensions will be indexed as they are in the private sector?
Earl Ferrers: My Lords, under the IBA's pension scheme, pension increases in line with increases in the retail prices index are guaranteed up to a maximum of 5 per cent. Those guarantees will be transferred. The IBA also has a discretion to make increases in line with increases in the RPI above 5 per cent. That discretion will be preserved in the new arrangements.
Baroness Birk: My Lords, can the Minister placate some of the worries about this question and tell us whether, as the ITC will be a much smaller body than the IBA, it will be able to afford to pay retirement pensions to existing IBA pensioners at the current rate? Would he care to comment on the fact that the pension rights of those employed up to now by the Cable Authority are specifically mentioned in Schedule 8 to the Bill while employees of the IBA and other people, referred to only in Schedule 1, are covered not specifically but simply by the phrase,
"as the Secretary of State may determine"?
Can the Minister confirm that the Government would be prepared to write more information into the Bill rather than leave the wording vague as it is at the moment?
Earl Ferrers: My Lords, in any transfer of personnel it has been made perfectly clear that existing arrangements enjoyed at the IBA will be transferred under the new arrangements. Therefore there should not be any cause for worry. The noble Baroness asked why the Cable Authority is mentioned in particular. The reason is that the ITC will take over the Cable Authority and this does not involve any division of assets. My right honourable friend has agreed to consider including in the Bill a provision to give transferred employees continuity of employment in order to give them greater reassurance. That is in the Bill. But the provisions dealing with pensions must be left to a scheme which will be devised since it involves the division of an existing pension fund. It would not be wise to tackle such a complex matter within the timetable of the Bill.
Baroness Birk: My Lords, I am sorry to press the matter but as it is left in the Bill some present and future pensioners could be worse off than they are at the moment. Does the provision take into account that a number of people— I believe something like 40 per cent. of engineers— will be going to a privatised transmission company?
Earl Ferrers: My Lords, I think not. If they go over to a privatised transmission company they take their pension rights with them. Therefore there should not be any concern about their being worse off. But the Broadcasting Bill gives the Secretary of State power to approve a scheme for the division of assets, which is what the pension fund is concerned with, including a provision to protect the employees' existing rights. The Secretary of State will approve such a scheme. It is quite complicated and the discussions about the scheme are taking place at the moment.

Seafarers' Hours of Work
2.48 p.m.
Earl Attlee Earl Attlee asked Her Majesty's Government:
When they intend to implement the recommendations of Professor Ivan Brown's report on hours of work and fatigue at sea and those of the report by the National Union of Marine, Aviation and Shipping Transport Officers, Seafarers' Hours: Time to act.
Viscount Davidson: My Lords, Professor Brown's report on hours of work and fatigue at sea was forwarded to the National Union of Marine, Aviation and Shipping Transport Officers and other representative organisations on 2nd February for comment by the end of March. The union's report, Seafarers' Hours: Time to act, will be taken into account together with any further comments that it may wish to make on Professor Brown's study before any decision is made on what further action, if any, is appropriate.
Earl Attlee: My Lords, I thank the noble Viscount for that reply. Will he appreciate, since he had the courtesy to discuss my Question with me beforehand, that I am naturally disappointed? Is it not strange that airline pilots, bus drivers and drivers of heavy goods vehicles are restricted by law as to the number of hours they can work without a rest period but this does not apply to Merchant Navy officers? Does he further agree that unless the hours that are being worked at present are substantially reduced, there is the potential for a catastrophic accident with massive loss of life and damage to the environment?
Viscount Davidson: My Lords, I note what the noble Earl says. However, I must remind him that draft regulations which would have established duty and rest periods for watchkeepers for seagoing ships over 1600 grt other than ferries were circulated to the industry in 1982. However, there were union and shipowner objections to some of the detailed proposals and no progress was made with the regulations beyond the draft stage. We hope that the unions will now send in their comments by the end of March— that is, by the end of this week. They will be taken into account in the discussions on Professor Brown's study.
Lord Boyd-Carpenter: My Lords, will my noble friend and the Government watch very carefully and with caution the possibility of imposing on British shipping anything which further weakens its competitive edge against foreign shipping, given the lamentable extent to which that competition has prevailed against it? Will my noble friend bear that very much in mind in considering this matter?
Viscount Davidson: My Lords, yes. I certainly take my noble friend's very important point on board.
Lord Murray of Epping Forest: My Lords, does the Minister agree that the developments in recent years, notably the reduction in crewing levels, the faster
570
turn-round time in ports and the increase in criminal penalties on masters and officers, have all tended to increase the fatigue felt by seamen? Are the Government willing to discuss with the National Union of Marine, Aviation and Shipping Transport Officers ways of alleviating such factors?
Viscount Davidson: My Lords, the research was commissioned by the Department of Transport to help the Government to decide whether regulating hours of work at sea would be justified in the light of the present knowledge about the effects of fatigue. That is the work that Professor Brown has carried out.
Lord Marsh: My Lords, if the Government believe that there is a potential hazard involved in the present lack of regulation of hours, does the noble Viscount consider that a more important matter than awaiting the approval of the TUC and the shipowners? Is it not a matter for the public at large?
Viscount Davidson: My Lords, as the Government commissioned the research by Professor Brown on the problems of fatigue at sea, the Government thought it right, when the report was received, to send it immediately to the unions for their comments. We have asked for comments by the end of March, which is this week.
Lord Molloy: My Lords, does the noble Viscount agree that it must primarily be a matter for the unions and the employers? The public at large are shocked and shattered by terrible accidents but they do not know the cause and they never intend to find it out. What the noble Lord, Lord Marsh, has suggested is quite ludicrous. It is the unions and the employers' organisations which together have to examine what happened in the past and to make sure that it does not happen again.
Viscount Davidson: My Lords, I am not sure whose side I am on. However, I believe that the Government are in the middle and trying to do the right thing.
Lord Underhill: My Lords, is not the view of NUMAST— the officers' organisation— well known? Its report is the result of a two-year study in which it has heard the personal experiences of masters and other officers on all types of vessel. What is needed is consultation not on what should be done but on the nature of regulations that ought to be framed. Will the Government have made their minds up by the joint meeting of the International Maritime Organisation and the ILO on this matter which will be held in September?
Viscount Davidson: My Lords, I hope so. However, I said in my orginal Answer that the report will be taken into account together with further comments that the union may wish to make on Professor Brown's study.
Lord Greenway: My Lords, I appreciate that fatigue at sea has become a serious and possibly dangerous problem. However, does the noble

571
Viscount agree that the International Maritime Organisation is the best forum to deal with the matter rather than taking precipitous unilateral action?
Viscount Davidson: My Lords, I believe that all interested bodies must be seen to be agreed on this.
Baroness White: My Lords, the point made by the noble Viscount's noble friend Lord Boyd-Carpenter is valid. However, we must do our very utmost to obtain international agreement on standards. Therefore, working through the IMO is probably the most effective way forward. Will Her Majesty's Government take full cognizance of the importance of the international element? Otherwise our shipping will be still further disadvantaged by foreign owners who register under other flags.
Viscount Davidson: My Lords, I shall certainly ensure that my right honourable friend is acquainted with the comments that have been made today.
Lord Hatch of Lusby: My Lords, following the question of the noble Lord, Lord Boyd-Carpenter, is there not a deeper issue that is illustrated by his question? The competition that has taken place over the past few years among the members of the maritime community has left many of our ships grossly understaffed in relation to the safety regulations. Has not flagging out caused competition in staffing levels which in itself is increasing hours and therefore increasing the dangers to seafarers?
Viscount Davidson: My Lords, I note what the noble Lord, Lord Hatch, has said. In considering the Question on the Order Paper, his question was a long way from it.

HM Prison, Belfast: Attempted Breakout
2.56 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton asked Her Majesty's Government:
What action they will take following the recommendations made after the attempted breakout from HM Prison, Belfast, in October 1989.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Skelmersdale): My Lords, while details are necessarily confidential, I can confirm to the House that a number of recommendations have already been implemented and others are under consideration.
Lord Graham of Edmonton: My Lords, is the Minister aware that the Prison Officers' Association and prison officers in general have been neither consulted nor informed about the recommendations despite the fact that alleged details of the recommendations have appeared in the media over the past few days? Is the Minister aware that one of the alleged recommendations relates to the need for counselling and advice in countering psychological
572
warfare by prisoners inside prisons? Will the Minister confirm that as long ago as 1984 the Prison Officers' Association urged the Government to give its members treatment in this very difficult situation?
Lord Skelmersdale: My Lords, before answering the supplementary question of the noble Lord perhaps I may congratulate him on his birthday, which I believe is today.
The Prison Officers' Association was advised of the nature and the extent of the inquiry and was given every opportunity to express its views to the reporting officer. Consultation with the POA will take place in the normal way if any of the report's recommendations touch on the interests of its members.
The question of psychological training is a more general matter, as the noble Lord has just confirmed. It has been talked about for some time. As such, it has nothing to do with the report in question, which is about an attempted escape from the Crumlin Road gaol.
Lord Graham of Edmonton: My Lords, will the Minister accept that, in view of the alleged leaks of alleged reports, prison officers who are serving not only in Crumlin Road gaol but also in the Maze and in other prisons are the subject of jokes by prisoners as to their need for psychological treatment? I am sure that the Minister understands that the atmosphere inside prisons in Northern Ireland is quite unique. The prison officers are carrying out a dreadful job on behalf of society. Anything that can be done to give them aid, comfort and weapons in their battle on our behalf ought to be treated seriously.
Lord Skelmersdale: My Lords, my Answer was not intended to, nor indeed did I believe that it did, give any hint that I disapproved of the feelings of the Prison Officers' Association. All responsible sections of the community will be thankful to the Northern Ireland Prison Service and the very men about whom the noble Lord is talking for thwarting this potentially very serious escape attempt.

Business
3 p.m.
Lord Denham: My Lords, it may be for the convenience of the House to know that the Report stage of the Education (Student Loans) Bill will be adjourned at about 7 p.m. for about one hour and that during that adjournment the Second Reading of the British Railways (No. 3) Bill will be taken.
It may be for the convenience of the House if I confirm that, subject to the progress of business, the House will adjourn for the Easter Recess on Thursday, 5th April and return on Wednesday, 18th April. The House will sit at 11 a.m. on Thursday, 5th April.
Lord Cledwyn of Penrhos: My Lords, before we move to the Report stage of the Education (Student

573
Loans) Bill, perhaps I may say a brief word about the amendment to the Bill tabled last Thursday by the noble Earl, Lord Caithness, which can be seen on page 8 of the Marshalled List.
It appears that the Bill as drafted is incompatible with the Consumer Credit Act 1974. The amendment tabled for Report by the noble Earl is intended to correct the defect. It is very wide. It says simply that the documents on the loan scheme shall not be regarded as encouraging minors to take out credit within the meaning of the 1974 Act.
The introduction of minors into the Bill adds a complex new dimension to the whole Bill. The fact that it is unlawful to charge interest to minors was overlooked when the Bill was first drafted. Furthermore, I understand that that omission could affect as many as 100,000 students, most of them in Scotland. That is because in Scotland, as we know, most students enter college at the age of 17. I also understand that there could be some doubt about the accuracy of the amendment tabled by the noble Earl. My noble friend Lord Peston, who leads for us on the Bill, was told of the new amendment on Thursday by my noble friend Lord Ponsonby, who had in turn been informed by the noble Lord, Lord Denham, the Government Chief Whip. My noble friend Lord Peston then asked for more time to consider all the legal and administrative implications of the noble Earl's new amendment, which were very considerable.
Under the circumstances I hope that the noble Lord the Leader of the House will now defer the amendment to enable those who are interested in the Bill and in its proper processing to have more time. All we have had is a very inadequate weekend. It is very important that on Report the House should be given a proper opportunity to consider this new development.
Baroness Seear: My Lords, we too very much regret that the amendment should have been produced at such very short notice. It is not a trivial amendment. It affects a large number of young persons and represents a change to the Consumer Credit Act. We do not consider that it should have been introduced at this stage.
The Lord Privy Seal (Lord Belstead): My Lords, I have been taken somewhat unawares because the noble Lord referred to an amendment which is not on the page of the Marshalled List which he identified. I believe that the noble Lord, Lord Cledwyn, was talking not about Amendment No. 44 on page 8 but about Amendment No. 49 on page 9. I assume that the noble Baroness also referred to that amendment. I am grateful to the noble Lord, Lord Cledwyn, for recording that my noble friend the Government Chief Whip warned the official Opposition and also the Social and Liberal Democrats about the amendment.
Perhaps I may explain what happened. A clutch of amendments was to be put down by the Government on Thursday afternoon. The Government Chief Whip and I were both aware that the amendments would not go down before 3 o'clock that afternoon. Therefore, with my express approval,
574
the Government Chief Whip, my noble friend Lord Denham, sought out the Opposition Chief Whip, Lord Ponsonby, and the noble Lord, Lord Tordoff, for the Social and Liberal Democrats, to tell them that amendments were to be put down that afternoon. That was on Thursday, not on Friday. He advised that in particular one amendment— Amendment No. 49— raised an issue which had not been raised previously under the Bill. We therefore felt that it was our duty to give notice to the two main opposition parties. That we did, and I hope that we shall discuss the matter later this afternoon.
Lord Peston: My Lords, I hope that I shall be forgiven for saying how unsatisfactory I find the answer of the noble Lord the Leader of the House. I was first informed of the matter via my noble friend Lord Ponsonby, who had in turn been informed by the Government Chief Whip, Lord Denham, on Thursday afternoon, as the noble Lord the Leader of the House said. It took me a little time to appreciate the significance of the amendments. I then went immediately to the Government Whips' office and said that the amendments were of fundamental significance and that it was my view that the Government should not proceed with them at the pace they intended. I said that I should need a great deal of time to examine the significance of the amendments. I asked the Whips' office to get in touch with Ministers on the matter. I also said that I was available for whoever wished to speak to me on the subject. I was in your Lordships' House on Thursday afternoon and available on Thursday evening on my home telephone number, which I gave to the Government Whips on Thursday evening. I was in your Lordships' House for most of Friday's business. I discovered today that no message from me appeared to have gone to the Government side on the lines that I have just mentioned.
My noble friends and I have opposed the Bill most vigorously but we have played strictly according to the rules. I believe that the noble Lord the Leader of the House will acknowledge that. My concern now is that we are moving outside reasonable rules of behaviour. Perhaps I may put the point as clearly as I can in asking the noble Lord the Leader of the House to reconsider his answer.
The amendments concern the possible extension of credit to minors. My view on the matter is twofold and I ask the noble Lord the Leader of the House to consider both aspects of that matter. I endeavoured strongly to obtain advice on the matter. I was informed by the only expert advice available that the Consumer Credit Act 1974 is a very complicated piece of legislation. It would be foolhardy beyond belief for me to involve myself in that matter without the fullest advice and briefing.
It is also my view that if noble Lords had been aware of the consequences of the legislation regarding credit and minors the whole tenor of our debates would have been completely different. It is an extremely serious matter. I am still not in a position to debate the amendments today, much as I regard it as my duty, leading for the Opposition, to do the best that I can. I must ask the noble Lord

575
the Leader of the House to reconsider the statement that he has just made and to ask his noble friends to delay the amendments until such time as the Opposition and noble Lords on his side of the House can pursue the full ramifications of the matter. We really cannot proceed with the amendments today.
Lord Belstead: My Lords, there are just two things that I should like to say. I acknowledge that the noble Lord, Lord Peston, has conducted the debates on the Bill from the Opposition Front Bench in a way which has my admiration. The noble Lord is both an expert and a very good parliamentary performer. I should not want to follow procedures which the noble Lord did not like.
Nevertheless, I by no means go along with the interpretation which the noble Lord has put on the amendments that have been put down. It is perfectly true, I am advised, that the Consumer Credit Act 1974 is an untried piece of legislation so far as concerns this particular issue. It is precisely for that reason that the Government have been late in putting down an amendment for the avoidance of doubt. These are matters which it is proper not to debate now but to debate when we come to the amendment.
Secondly, I must repeat to the House that with my express approval and encouragement, as soon as he knew that the particular amendment was to be tabled with other amendments, my noble friend the Government Chief whip immediately sought out the Opposition Chief Whip. That was before one o'clock on Thursday. He tried to seek out the Liberal Democrat Chief Whip, with whom contact was not made until just before two o'clock. That was expressly to warn the two main Opposition parties that this amendment was to be tabled.
I like to think that we have behaved as honourably as we possibly could in tabling an amendment which deals with a matter that has not been raised before. I repeat to your Lordships that it would be right to debate the amendment later this evening.
Lord Beloff: My Lords, I am sorry to intervene and I have no views on the amendment, which I have only just seen. However, I respectfully point out to my noble friend the Leader of the House that a Bill of this kind is not simply a matter for the two main Opposition Parties. It has largely been conducted by noble Lords on this side of the House and on the Cross-Benches. I imagine that most noble Lords, like myself, left the House on Thursday in the late afternoon or early evening not having had the opportunity of seeing this amendment. It had not been brought to our notice and was not so far as I am aware among those which I picked up in the Printed Paper Office. I first heard about the problem this morning when I read a report in The Times. It seems to me that either the whole House is entitled to be informed of government amendments so that there is at least a weekend to consider them or these amendments should not be tabled in a way which makes the position of noble Lords not on the Opposition Front Benches almost untenable.
Lord Belstead: My Lords, my noble friend says that he has not had a weekend to consider these amendments. He has had the weekend to consider this and other amendments which were tabled on Thursday. For the avoidance of doubt, I repeat that this amendment was one of a clutch which were tabled on Thursday afternoon and not on Friday. Because Amendment No. 49 raises an issue which has not previously been raised in the Bill, my noble friend the Government Chief Whip and myself did the very best that we could. We sought out the Chief Whips of the two main Opposition parties and said that there was an amendment which raised a matter which had not been raised before and that they should be aware of that. I like to think that that was as open and honourable a way of going about our business as possible. I suggest to your Lordships that it is right that this amendment should be considered later on today.
Lord Cledwyn of Penrhos: My Lords, the noble Lord is being uncharacteristically unfair. He has the great respect of the House for the courteous and fair way in which he controls our affairs. The point is that an amendment which changes the Bill in a fundamental way, taking account of the 1974 Act, was tabled late on Thursday. The noble Lord knows perfectly well that noble Lords in this House tend to go to their homes on Thursday evening. It is not unreasonable to accept what the noble Lord, Lord Beloff, said. I say this in a totally non-party way but in the interests of the whole House. He said that he was unable to take account of and therefore to study the effect of this amendment. That applies to a large number of noble Lords who have taken part in the Committee stage of this important Bill.
Noble Lords are not asking the noble Lord to withdraw the amendment. They are asking that they should be given a little more time to consider all its implications. If the noble Lord and his noble friends persist in pursuing this amendment today, that opportunity will not be given. With great respect to the noble Lord, that is not fair nor is it good for the way in which this House conducts its legislative processes. I strongly appeal to him to reconsider this and to come back in an hour's time to give us the benefit of his further consideration.
3.15 p.m.
Lord Nugent of Guildford: My Lords, I should like to put another point to my noble friend which is not entirely helpful to him but which I believe is very germane to the view of the House. Noble Lords who wish to take part in this— and they are on all sides of the House— will need to study the Consumer Credit Act 1974 and obtain expert legal advice on it because this amendment seeks to stretch the terms of the Act in order to make this exception. It may be perfectly valid and possible to do that but it seems to me a relevant point that we cannot take the Bill as it is on its merits without considering it in relationship to what is a very complicated piece of legislation; namely, the 1974 Act. I wonder whether my noble friend has taken that into account in the view which he has taken.
Lord Flowers: My Lords, it is perhaps not unreasonable for a noble Lord to speak from the Cross-Benches. I played a fairly active part in the Committee stage of the Bill and I spent part of the weekend in telephonic communication with other Members of the House considering some of the government amendments before us today. This amendment was not mentioned. I had not seen the significance of it and I presume that those to whom I was speaking also had not done so. Therefore, even though I have done my best to follow what is happening over the weekend, I am totally unprepared on this matter. Having heard what has been said about it, it seems to me to be something which deserves a fair amount of thought.
Lord Belstead: My Lords, I believe that it is unreasonable of noble Lords opposite, after the specific warning given to them by my noble friend the Chief Whip on Thursday, to say that the amendment should not be debated at all. I am being asked that the amendment should simply be withdrawn. I cannot agree to that for the reasons which I have given. I suggest that the amendment should be moved and debated. If noble Lords then think, having listened to the debate, that it is wholly unreasonable that it should go on the statute book, we must then listen to the majority voice in the House. Having listened to my noble friend Lord Nugent of Guildford, it may be that there will be a majority voice.
The noble Lord, Lord Cledwyn, is always helpful and courteous and acts in the best interests of the House. However, if he could literally put his hand on his heart and say that from his side of the House amendments have never been tabled, for example, on a Friday and then taken early the following week, I might feel somewhat less sure of my position. However, this amendment was tabled on Thursday and we specifically approached the noble Lord's party and the Liberal Democrats. Therefore, I believe that there is an irrefutable case for the amendment to be moved this evening. We can then see what is the opinion of the House.
Lord Cledwyn of Penrhos: My Lords, I must agree with; he noble Lord that from time to time all governments are guilty of the late tabling of amendments. On those occasions, the House has properly objected. However, on this occasion we are not speaking of a run-of-the-mill amendment but of a basic amendment which raises new issues that have not previously been debated during the passage of the Bill, including its Committee stage. It is on that ground that we ask the noble Lord to think again.
As his noble friend Lord Nugent said, this refers to the Consumer Credit Act 1974, which is, as he knows, very complex in itself. Therefore, it will take time— and it is not unreasonable to take further time— to look at the student loans Bill side by side with the Consumer Credit Act to see what will be the effect. Today is too soon. Will the noble Lord think again and give us more time?
Lord Monkswell: My Lords, perhaps I may pose a slightly different question to the Leader of the
578
House. So far, the discussion has concentrated on the short time available between the tabling of the amendment and the possible consideration of it on Report this afternoon. My concern is with regard to the different types of debate and consideration given to the Bill at different stages. At Committee stage it is possible to have a much freer to and fro of debate which is very beneficial. This amendment appears to be making a significant change. Perhaps the Leader of the House could advise us whether there might be some procedural mechanism whereby it could be considered on its own as an amendment at Committee stage. That would allow the to and fro of debate and further consideration at subsequent Report stage and Third Reading. The House could then go through the full debating procedure on an amendment which, as everybody will agree, significantly changes the Bill.
Lord Belstead: My Lords, it will mean repeating myself but I shall answer the noble Lord. As I have already said, let us move the amendment, let us debate it and if there is then a majority feeling in the House that it should be withdrawn and decided on Third Reading, that is what we should do. I am not speaking of forcing a vote through. If there is clearly a majority feeling when the amendment is moved, then the Government should withdraw it.
However, it is unreasonable to come to me in my dual capacity as Leader of the House and leader of my party and say that an amendment tabled on Thursday, about which opposition parties were specifically warned— not that it is a difficult amendment, but it is a new issue— should not be moved at all.
Baroness David: My Lords, the Government may have tabled the amendment on Thursday but it was not printed until Friday, when many noble Lords were not in the House. Surely it is possible— there is a precedent for this— for these amendments concerning the Consumer Credit Act to be recommitted and taken at a later stage when we have had a chance to study them. If the amendment were recommitted we could continue with the other amendments today at Report stage. As my noble friend said, we shall then have the chance of a much freer discussion.
Lord Belstead: My Lords, perhaps I may say that the noble Baroness, uncharacteristically, is being less than fair. It was precisely so that noble Lords and noble Baronesses opposite were aware that an amendment which raised a new issue was being tabled that my noble friend the Chief Whip contacted the Opposition Chief Whip. Let that be quite clear.
Baroness White: My Lords, does not the Leader of the House recognise that that applies to the Front Bench but not to the rest of us who have taken an interest in the Bill? I was in the wilds of North Wales and would not expect my Front Bench to try to contact me on the three or four different telephones which I passed, so to speak, over the weekend.
Earl Russell: My Lords, no one has suggested that the noble Lord the Lord Privy Seal is guilty of any dishonourable conduct. He has behaved with impeccable honour. Our concern is not with honour; it is with having sufficient time for business. Most noble Lords specialise in a particular field. I am not a specialist in consumer credit. I should therefore want to take advice on that subject. I should have hoped my noble friends who are expert in consumer credit might be here. The House might consider the amendment more effectively if the noble Lord were to accede, however reluctantly, to what the noble Lord, Lord Cledwyn, asked.
Lord Belstead: My Lords, once again the noble Earl has been an extremely good performer on this Bill, but he was not, perhaps, up to his usual high standard in making that intervention, kindly though his words were to start off with. Even though his Chief Whip knew about this amendment very early on Thursday afternoon, he makes it sound as though there was no communication with one of the main spokesmen on the Bill on the Liberal Democrat Benches. It was precisely in order to achieve that communication that my noble friend the Chief Whip contacted the noble Lord, Lord Tordoff.
We cannot extend this exchange any further. I suggest, perfectly reasonably, that when we come to the amendment it should be moved; it should be debated. If there is clearly a majority wish in the House that it should not be proceeded with, I assure your Lordships that the Government will not under those circumstances attempt to bulldoze it through.
Lord Stoddart of Swindon: My Lords, I hope the noble Lord the Leader of the House will not close this discussion. A very reasonable point was raised by my noble friends Lady David and Lord Monkswell as to whether this part of the Bill could be recommitted so that the amendment could have proper and due consideration. As my noble friend said, there is a great difference in the quality of discussion at Committee stage, when Ministers can be questioned closely on a number of occasions by the same noble Lord, and the procedure at Report stage, when noble Lords are allowed to speak only once.
That is the important point; that on such an important amendment, bearing in mind the complexity of the Consumer Credit Act 1974, noble Lords should be able to probe the Minister and obtain proper replies to relevant questions before a vote is taken. Nobody is accusing the noble Lord the Leader of the House of bad faith or anything like that; indeed we respect his integrity. Under those circumstances, and bearing in mind that he has the respect of this House, I hope that he will closely and reasonably consider the suggestion made by my two noble friends.
Lord Nugent of Guildford: My Lords, before my noble friend replies once again, I have already intervened but perhaps I may add one thought. He said that we should debate this amendment and see what happens. If the consensus is that debate on Report is inadequate to deal with it, he is prepared
580
to take further action; in other words, to refer this subsection to a postponed Committee stage. My noble friend has given that undertaking. Surely the point has now been reached when noble Lords might accept that and continue with the debate. When we debate this amendment we can see what happens. If the House feels that there has been inadequate time, my noble friend has given a satisfactory answer. That will perhaps allow us to proceed to debate through Report stage.
Lord Belstead: My Lords, I am grateful to my noble friend. Once again I am placed in some difficulty by noble Lords opposite. The noble Lord the Leader of the Opposition asks that this amendment be postponed to Third Reading. The noble Lord, Lord Stoddart of Swindon, says that it needs to be recommitted. Those suggestions are very different. If I may say so, the answer is somewhere in the middle. I gave an undertaking that if the amendment is moved— which I think it should be— and debated, and if there is consensus that it should not be decided tonight, the expression I used was that the Government will not bulldoze it through. I promise that I shall be true to that undertaking.

Business of the House
Lord Belstead: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That in the event of the Consolidated Fund (No. 2) Bill being brought from the Commons that Standing Order 37 (Order of Business) and Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with to enable the Bill to be taken through all its stages on Wednesday next before the Motion standing in the name of the noble Baroness, Lady Stedman.— (Lord Belstead.)
On Question, Motion agreed to.

Education (Student Loans) Bill
3.29 p.m.
Report received.
Clause 1 [Loans for students]:
Baroness Young Baroness Young moved Amendment No. 1:
Page 1, line 5, after ("may") insert ("by Order under subsection (7) below").
The noble Baroness said: My Lords, the procedure on this series of amendments may be slightly complex. I should like to move Amendment No. 1 and speak to Amendments Nos. 15, 17 and 38. I assume that my noble friend Lord Caithness will move and speak to Amendment No. 16, which is clearly linked to the others.
On the first day of Committee stage two weeks ago I moved a similar series of amendments. My noble friend helpfully undertook to consider my amendments and either to accept them or redraft them to obtain the correct wording. I therefore withdrew them and was very grateful for what he said.
I make it absolutely clear from the outset that I am grateful for his support on Amendment No. 15, to which he has attached his name, and for his Amendment No. 16 which meets the undertakings. The amendments go a long way towards making plain that all the regulations under the Bill will be subject to affirmative resolution instead of negative resolution. That is what I asked for and I am grateful for acceptance of those points.
Arising from my noble friend's amendment it is now clear that two other matters were not covered. It is on those points that I hope very much my noble friend will be able to give me the assurances I seek. The first point concerns Clause 1 (1) which refers to the arrangements under the Bill. My understanding is that the arrangements mean, in effect, the establishment of the Student Loans Company. During the past few days I have discovered what the Government intend with this procedure, but it would be helpful to have confirmation from my noble friend.
The Student Loans Company is to be established effectively as a company under the Companies Act. That being the case, it would not be suitable to write it either into primary legislation or into regulations under the Bill. I understand that, and those who are concerned with this matter also understand the point. However, there are a number of aspects about the Student Loans Company which are of concern because of a change from the original proposal that the scheme was to be run by the banks. It would be helpful if my noble friend could say, for example, what is to happen if at some time in the future the Student Loans Company were to be privatised.
My assumption— of course, I do not know— is that such an event would be unusual because the Student Loans Company is not going to make a profit. It is not that kind of an organisation. Therefore, the circumstances we are talking about are clearly very different. However, it would be helpful to have the Government's view on certain aspects. It would act as an assurance on those matters. We are entering new territory and people asking; these questions are not doing so in any sense of going against the principle of the Bill. They wish simply to clarify points that have not yet been explained. To have answers would be of great assistance.
The second point I hope my noble friend can clarify arises under Clause 1 (4). I note that the noble Baroness, Lady David, has tabled Amendment No. 13 which I assume meets the point she raised in Committee and to which my noble friend said he would agree. I am sure the noble Baroness agrees, as I do, that the amendment is helpful because, as I understand it, there will be consultation in regard to Schedule 1. If I may say so to my noble friend, the amendment is extremely helpful and certainly goes a long way towards meeting my own anxieties.
I realise that there is a technical reason why Clause 1 (4) is not covered. It is not a regulation but an order; therefore it cannot come under the affirmative procedure. I have also discovered that Schedule 1 is, to a large extent, taken from the Education Reform Act 1988 which itself is subject to negative resolution. That being the case, perhaps my noble
582
friend can go one step further and say that for one year only it could be subject to the affirmative resolution procedure. He has already gone a very long way. We know that there will be consultations. I have no doubt that the noble and learned Lord, Lord Simon of Glaisdale, will wish to comment from the legal point of view. Perhaps my noble friend can give us some added assurance on the matter. Everyone has accepted that the affirmative resolution procedure would apply for only one year and thereafter that the negative resolution procedure would apply.
My understanding is that my noble friend has already accepted the proposal put forward in Committee by the noble Baroness, Lady David, and we are not, therefore, going very much further. However, perhaps my noble friend would set out fully his views on the matter because it would be of assistance to have a full explanation. I recognise that we are asking for a change in something under the Education Reform Act which is currently by negative resolution to something similar under the affirmative resolution, but it is for one year only. Thereafter it will be under the negative resolution procedure.
In view of the concern expressed in all parts of the Chamber I hope very much that my noble friend will be able to give a positive response. I am conscious that we are on Report. I hope that I have set out fully how grateful I am for what my noble friend has done to give effect to his undertakings given in Committee to make changes so that regulations in the Bill currently subject to the negative resolution procedure will be under the affirmative resolution procedure. I should be grateful if he could set out fully his understanding of how the Student Loans Company is to work because that is a separate issue. I should also be grateful to have his view on my final point relating to Clause 1 (4). I beg to move.
Lord Simon of Glaisdale: My Lords, the noble Baroness has set out clearly what is involved. It is singularly unfortunate that there was a misunderstanding that persisted right up to the end of last week. It supervenes on the discussion that your Lordships had earlier this afternoon. In my view, the trouble orginates from the great speed at which we are endeavouring to legislate. That is almost a certain recipe for misunderstanding.
I refer to Amendments Nos. 16 and 17. I presume that the black scoring on Amendment No. 17 as it appears on the Marshalled List obliterates the name of the noble Earl. Amendment No. 16 is a starred amendment. When I went into the Printed Paper Office on Friday no such amendment had been tabled. I do not know when it was tabled, but it should be starred. The position is unsatisfactory.
Two points were raised in Committee in regard to the amendment tabled by the noble Baroness. The first was that your Lordships should be able to see the whole of the scheme when it is initially brought into being during the first year. I refer to Clause 1 and Schedules 1 and 2— the whole lot.
The noble Baroness was good enough to leave the second point to me; namely, that the Henry VIII

583
provision in Clause 1 (4) should specifically always be by affirmative resolution. At the moment it is subject to the negative resolution procedure. That is a fundamental and constitutional point. The Executive is taking power to amend primary legislation: indeed, the very Act in which this power is taken. That should at least be subject to affirmative resolution. The point was conceded by my noble and learned friend the Lord Chancellor during discussion of the Courts and Legal Services Bill. I certainly understood the noble Earl to be conceding both points in Committee; namely, that your Lordships will able able to see the initial scheme in its entirety and to see it as explained by the Minister.
I also believe that it was conceded that Clause 1 (4) should be subject to the affirmative resolution procedure. The noble Earl said at the beginning of his speech that, having listened to the debate, if he had been on the Back Benches he would have supported his noble friend Lady Young but being on the Front Bench he felt that he should take no different attitude. At the end of the speech, I understood him to say that he would either accept the amendment as it stood or have it redrafted to carry out what it was intended to do. It was on that basis that the noble Baroness withdrew our amendment.
I wish to say a few words about the position of the noble Earl the Paymaster General. During a number of Sessions he has been acting very much as a legislative trouble-shooter. He has had to pilot a number of different Acts through your Lordships' House; many were complicated and some were highly technical. Your Lordships willl agree that he has done that to general admiration. He is in a difficult position. He is a Treasury Minister and not a Minister of the department which has sponsored this Bill. He has a heavy duty as a Treasury Minister, not least at this time of the year. It is essential that the department should not put him in a false position. I cannot help feeling that he is in somewhat of a false position because, as the noble Baroness has said, his starred amendment does not fully carry out what the noble Baroness and I understood he was undertaking to do.
I ask the noble Earl this question: can he assure us that the whole of the scheme, whether by rule or by regulation, will be laid before your Lordships by the affirmative resolution procedure for the first year? Can he also assure us that the arrangements will be explained at the same time so that your Lordships can view the whole matter as a complete scheme and judge it as such? Fortunately, we have amendments tabled for Third Reading to be discussed. I hope that the noble Earl will undertake that Clause 1 (4) will be subject to the affirmative resolution procedure throughout. As I read it at the moment, it is not subject to that procedure because the subsection refers to orders. The noble Earl's amendments refer to regulations. The point may be crucial. Unless the noble Earl can assure your Lordships that the intention and the result are that Clause 1 (4) will be throughout— not merely for the first year— subject to the affirmative resolution procedure, I ask that
584
he give an undertaking that that will be put right at Third Reading.
That being so, I agree with the noble Baroness. It is better at this stage that our amendments should be withdrawn and that we should proceed on the noble Earl's amendments, but recognising that something still remains to be done on them. If the amendments are to be withdrawn, that is always subject to the approval of your Lordships. For my part I support the attitude of the noble Baroness.
3.45 p.m.
The Paymaster General (The Earl of Caithness): My Lords, it might be helpful if I say a few words at this stage before I comment on the amendments in the name of my noble friend Lady Young. I wish to make some general remarks about the Bill which might be helpful to your Lordships. As noble Lords will be fully aware, there were a number of agreements and concessions made at Committee stage which I hope that your Lordships found helpful. There were also a number of points which my noble friend Lady Blatch and I agreed that we should take away for consultation with my right honourable friend the Secretary of State for Education, Mr. MacGregor. I hope that your Lordships will not be disappointed by what happens today.
We have before us an agreement in the form of an amendment. It was the first amendment we discussed at Committee stage. I know that your Lordships will look forward anxiously to hearing what I have to say concerning Amendments Nos. 2, 6, 13, 27, 35 and 51, all of which concern points that were raised at Committee stage. We have consulted on all of them and all of them bring your Lordships good news.
I turn now specifically to the amendments before the House. This is an important group of amendments dealing with parliamentary scrutiny of the details of the loans scheme. It may be for the convenience of the House if I say something first about the amendments in my name to which my noble friend Lady Young has already referred— namely, Amendments Nos. 15 and 16— which apply the affirmative procedure to the regulations establishing the loans scheme. The noble and learned Lord, Lord Simon of Glaisdale, is right because my name is not down to Amendment No. 17.
The amendment in my name discharges the commitment I gave in our first Committee debate on the Bill. I spelt out very fairly what the Government will do. I can only blame myself entirely if there was a misunderstanding with the noble and learned Lord and my noble friends. I hope that that misunderstanding is now clarified. That is the reason why Amendment No. 16 is starred. I was in discussion with my noble friend Lady Young concerning the wording of that amendment late into Thursday. Though the amendment was drafted and was ready to be tabled in my name, because of the discussion we thought it appropriate to wait and see if we could resolve the problem. I hope I am able to convince your Lordships that the position is now

585
pretty clear. The amendment was tabled on Friday and it is starred.
I apologise to the House if your Lordships felt that that was a little late, but we thought it was the right way to proceed. As the House knows, the Bill as drafted provides for orders and regulations to be made by the negative resolution procedure. The amendments apply the affirmative procedure to the regulations made to establish the scheme, with negative resolution applying thereafter.
The regulations that would thus be subject to affirmative resolution cover the three principal aspects of the scheme. First, they include the regulations to be made under Clause 1 establishing conditions of eligibility. As the House knows, we intend these to reflect the residence and other conditions of the mandatory awards scheme. Secondly, the regulations will cover the terms of the loan in accordance with paragraph 1 of Schedule 2. These in particular will specify that the loan is to be indexed to inflation and provide deferment for graduates with low incomes. Thirdly, the regulations will cover the requirement to be placed on the higher education institutions to certify their students' status as eligible for the loan. All these matters will be subject to affirmative resolution when the scheme is introduced. We have debated these key features of the leans scheme extensively, but concern has been expressed here and in another place about Parliament's opportunity to scrutinise the key features further when they are settled in the regulations. These amendments meet those concerns.
The amendments in the names of my noble friends Lady Young and Lord Rippon of Hexham and the noble and learned Lord, Lord Simon of Glaisdale, would have a similar effect, but with two important differences. These amendments would make any amendment to Schedule 1 subject to affirmative procedure if it was made for the 1990–91 academic year; for later years, negative procedure would apply. Schedule 1 lists the types of course for which loans are to be available. In fact the list amounts to a definition of higher education. It reflects the definition of higher education established in the Education Reform Act 1988, though the wording is different as it has to include Scottish courses in this Bill and post-graduate courses are excluded.
The definition of what constitutes higher education does not change fast or frequently. But when it does change we need to be able to keep the legislation up to date. We shall consult the relevant parties before doing so. That is the subject of Amendment No. 13, in the name of the noble Baroness, Lady David. The definition in the Education Reform Act can be amended by order, subject to negative resolution, and a parallel power is proposed for this Bill in Clause 1 (4). But it is not, as I have indicated, a power that we expect to need to use in 1990–91. For that reason, the amendment on this point is not needed for establishing the loans scheme.
These amendments also differ from the government amendment in requiring the arrangements for the loans scheme to be expressed as a statutory instrument and making that, too,
586
subject to affirmative resolution. I put it to the House that that would be quite inappropriate.
The Bill provides for all the terms of the scheme as they affect students and graduates to be spelt out in regulations. The eligibility conditions, the size of the loan, indexation, the arrangements for repayment, deferment and cancellation are all subject to parliamentary scrutiny as they must be in the regulations, and those regulations this year will be subject to the affirmative procedure. It is right that the terms as they affect individuals should be subject to such thorough scrutiny.
The administrative detail— which is what the term "arrangement" covers— will also be subject to parliamentary scrutiny, through a different route. My right honourable friend the Secretary of State is responsible for ensuring that the administration of the scheme is carried out cost-effectively. He has to secure Parliament's approval for administrative expenditure on the scheme through the Estimates, and is accountable for the use made of the money voted. The Public Accounts Committee will be able to inquire into the administrative efficiency of the scheme, and the company's annual report and accounts will be published. There will be no lack of parliamentary scrutiny.
The Bill deliberately makes the terms of the scheme as they affect individuals subject to one form of parliamentary scrutiny, and leaves the administration subject to existing mechanisms. I hope that the noble and learned Lord, Lord Simon of Glaisdale, will now agree that there is no need to make the administrative arrangements subject to a further layer of scrutiny or regulation.
It is worth dwelling on the status of the company. It is a company limited by shares, and a Companies Act company. It was initially owned by the banks, but the shares are now all owned by the Secretaries of State for Education and Science and for Scotland. Its directors are presently civil servants. After Royal Assent we have it in mind to add other kinds of expertise to the board, though with no change in ownership. If at a later stage it were to become clear that the most cost-effective administration could be secured by a change of ownership, it would be open to the shareholders of a Companies Act company to effect the change. But such a change is not our present policy.
There will be nothing secretive about the company. It will observe all the requirements of the Companies Act, submitting accounts to Companies House. In that way its affairs will be governed by the appropriate primary legislation. It will also submit its annual report and accounts to the Secretary of State and through him to Parliament. It will follow the best commercial practice and will seek at all times to operate with the utmost probity. It will not wish to operate in the shadows but rather will wish to demonstrate to all concerned that it is discharging its functions to the benefit of both students and taxpayers.
In the circumstances, to require that the relations between the Government— who own the company— and the Student Loans Company itself should be subject to an order itself subject to

587
parliamentary scrutiny is not only unnecessary but inappropriate.
Moreover, I remind your Lordships that I have already made available a wealth of information about how the scheme will work. That has been published in the rules and procedures documents. They have formed the basis of many of our debates. We are not hiding our administrative plans from the House: on the contrary. But we do not think it right to make the supply of this service subject to scrutiny beyond the normal accountability requirements.
We have accepted that the terms of the scheme as they affect students and graduates should require the approval of this House and another place. We do not believe that it would be right to go further. I believe that the amendments in my name fully meet the proper concern for parliamentary scrutiny of the implementation of the scheme. I commend those amendments to the House.
Perhaps I may summarise. My noble friend Lady Young and the noble and learned Lord, Lord Simon of Glaisdale, raised three points in Committee. We have met the great bulk of those points. One point concerned the minor detail of the scheme, what I call the administrative detail. That is already covered by the Companies Act and so is already there in primary legislation and is already there through my right honourable friend the Secretary of State's accountability to Parliament. The second point is that specifically mentioned by the noble and learned Lord, Lord Simon of Glaisdale. It concerns Clause 1 (4) under which the Secretary of State may by order amend Schedule 1 to the Act. As noble Lords will know, Schedule 1 to the Act does not need any resolution to bring it into effect. It is there in front of us but might be amended at some date in the future. I should like to hear if noble Lords have any further thoughts on whether the matter should be left as it is— in line with the Education Reform Act 1988— or whether we should look at the point again.
Lord Grimond: My Lords, I wonder whether the Minister would be good enough to enlighten me a little further on the company's responsibilities to the Secretary of State and to Parliament. I have noticed since joining your Lordships' House that a rather wider view is taken here of the questions which Ministers will answer. Am I right in thinking that as this is an independent limited company the Minister in another place will not answer for it? He will say that he is not responsible for the company's day-to-day proceedings. Therefore a student who has a grievance about his treatment will not be able to go to his Member of Parliament and have the matter raised in Parliament.
The Earl of Caithness: My Lords, with the leave of the House, I am not proficient in the ways of another place. Before I continue perhaps I may say that it is nice to see the noble Lord back in his place. I hope that he was fit enough to watch the great occasion at Murrayfield which so many of us enjoyed. If not, he was certainly there in spirit, I am sure.
I am not an expert in the procedures of another place. The company will be a Companies Act company, but my right honourable friend will of course have responsibility for the finances of the company. The Public Accounts Committee will observe the scrutiny, but we should like to keep the day-to-day running at arm's length. That will be the most cost-effective and appropriate way of doing it, in line with a Companies Act company.
Baroness Phillips: My Lords, I have a straightforward question. Is this a precedent for a government to establish a company which is said to be a private company and to operate it with civil servants and a Minister? I cannot recall this happening before. It seems a dangerous principle to introduce.
The Earl of Caithness: My Lords, I am not sure whether it is a precedent. It was orginally a private company. The Government then took it over. We will bring in outside directors; and the question of the shareholding is a matter in the future.
Lord Flowers: My Lords, I also have a question about the company. It has been set up in order to give loans to students at a zero real rate of interest. That is all well and good. It is set up under the Companies Act to do that. The only shareholders are the Government, so the shareholders can insist upon that. But if, as the noble Baroness suggested, it is privatised at some time in the future, and if the Government agreed on that course because they wanted to for some reason, I presume that the company would be free to do what it liked about the rate of interest and could charge real interest at real rates. Would that not run somewhat counter to the whole idea of the student loans scheme? It seems to me that, in the event of privatisation, the whole concept of student loans as introduced into this House, with all the assurances we have received from the Minister, could be totally frustrated.
4 p.m.
The Earl of Caithness: My Lords, I fully understand the noble Lord's concern. However, I do not think that his concern is valid on this occasion. If he would care to look at Schedule 2 (2), he will see that it reads:
"Loans shall bear interest at such rates as may from time to time be prescribed by regulations made by the Secretary of State but so that"—
and this is the important point—
" (a) the interest (which shall accrue from day to day) shall be added to the outstanding amount of the loan; and
(b) the rates shall be such as appear to the Secretary of State to be requisite for maintaining the value of that amount in real terms".
That section covers the noble Lord's concern and I am sure that the provision would be taken forward by whoever owned the company. I hope that that explanation will satisfy the noble Lord.
Lord Flowers: My Lords, would not the company be governed by the Companies Act and not by this legislation if it were privatised?
The Earl of Caithness: Yes, my Lords; it will be governed by the Companies Act but it will also be covered by primary legislation and this legislation in particular.
Lord Jay: My Lords, can the Minister answer one other question arising from this issue? If there were a proposal to privatise this company, would it require primary legislation or could the Government effect this in some other way?
The Earl of Caithness: My Lords, as I understand the situation, it would not require primary legislation because the Companies Act does not require legislation in order to transfer the ownership of a company.
Baroness Seear: My Lords, in the wording of Schedule 2 (2) (b) it says,
"The rates shall be such as appear to the Secretary of State to be requisite for maintaining the value of that amount in real terms".
However, it does not say that the amount could not be more. It says that is has to be as much as would maintain it in real terms. But that could be interpreted to mean that that is the minimum, because there is nothing in the wording of the subparagraph, as I see it, to prevent the rate being put above that amount. It may have been the intention that that should be the maximum, but it does not say so. Can the noble Earl comment on the matter?
The Earl of Caithness: My Lords, I am not a lawyer but as I understand it the Bill limits the amount to the rate of inflation, the principle being that the undergraduate who receives a loan repays to the taxpayer via the Government the same amount in real terms as he borrowed. However, perhaps the noble Baroness will allow me to look further into the matter.
Lord Havers: My Lords, in my opinion the noble Earl's view is right; it should be the Secretary of State who decides the amount.
Earl Russell: My Lords, the noble Earl has said much for which we can be grateful, and indeed I am grateful to him. However, I share the misgivings of the noble and learned Lord, Lord Simon of Glaisdale, about Clause 1 (4). That is the clause which gives the Minister power to amend primary legislation. This is not a particularly heinous case in that respect. However, I believe that this is not something which should be undertaken lightly.
Lord Belstead: My Lords, I trust that the noble Earl will forgive my intervention at this point. Having; risen to my feet on many occasions today, I feel slightly hesitant in doing so again. However, a short while ago we were a little out of order, but now we are totally out of order. The rules for the Report stage are quite clear: no one may speak— save for the mover of the amendment— after the Minister has replied, except in the case of questions for elucidation or when the Minister has spoke early in order to assist the House. The Minister has not
590
spoken early in order to assist the House, but he has been answering many questions for elucidation. If the noble Earl now embarks upon a speech, we shall be totally and completely out of order.
Lord Peston: My Lords, I hope that what I have to say will not count as my speech on this particular matter. I am terribly worried now about the rules. I have been sitting here quietly because I thought the noble Earl was introducing his own amendments and that he was not replying. I certainly have a great deal to say on this issue and I intend to do so. We ought to get the position straight. I have no desire on this occasion, or indeed on any other, to break the rules. I am currently on my feet in regard to a point of order.
I understood that the noble Earl was introducing his amendments. I have been waiting for him to finish doing so before rising to begin my speech. Moreover, for all I know, that is also what the noble Earl, Lord Russell, is trying to do. As someone who is not an expert on rules, it would certainly help me if someone were to outline just what are the rules so that I shall know on future occasions when I may speak. I have been waiting my turn to speak in my normal courteous way, as I am sure has the noble Earl.
Lord Belstead: My Lords, we are currently dealing with Amendment No. 1, with which other amendments are grouped, and therefore the rules flow from that situation. However, perhaps I may make a suggestion which I made only the other day. I think that it would be for the convenience of the House if the two Front Bench spokesmen of the Opposition parties were to make their interventions. On this occasion I think that we should proceed in that way. Of course that means that other noble Lords will be able to break the rules which apply to the Report stage of a Bill. However, when we have finished with this particular group of amendments, I ask your Lordships to revert to normal Report stage procedure.
Lord Peston: My Lords, I would hate to be thought of as a nuisance but would the noble Lord the Leader of the House at least tell me exactly what are the rules in this connection? Do the rules state that the moment the noble Earl rises to speak the rest of us would be out of order if were we to do so? If that is the case, could the noble Earl in future kindly look over to this side of the House before he rises to his feet to see whether any noble Lord is about to rise to speak? I have no desire whatever on this, or indeed on any other occasion, to be out of order.
Lord Belstead: My Lords, we travelled around this course only a week and a half ago. On that occasion my noble and learned friend the Lord Chancellor was dealing with a Bill and it was suggested that he might look around to see if any noble Lord wished to speak before he replied to the debate. The Report stage rules in the Companion to the Standing Orders are quite clear: if the Minister dealing with the amendment wishes to speak early in order to assist the House, that is one matter and noble Lords are entitled to speak thereafter because clearly that is a

591
particular situation. However, if the Minister rises to answer the debate in the normal way then no noble Lord is permitted to speak afterwards.
I think that I am right in saying that in this particular case my noble friend was by no means the second speaker; indeed, he followed a fairly full speech made by the noble and learned Lord, Lord Simon of Glaisdale. Moreover, I think that my noble friend on the Front Bench quickly looked to see whether other noble Lords were rising in order to speak. Therefore, I believe that we should deal with this amendment by allowing all noble Lords to speak. In my view we should be foolish not to bend the rules on this occasion. However, after that— and this is the second time in only 10 days that I have had to do this— I appeal to your Lordships to have cognizance of the rules which apply to Report stage amendments. They are pretty simple. We do not have very many rules as regards the Report stage.
Baroness White: My Lords, the situation is made more difficult when the Minister has tabled an amendment which is grouped with others, one of which has been moved by another Member of your Lordships' House. I was under the same impression as my noble friend on the Front Bench. I thought that we were really listening to the noble Earl introducing his own amendments, as opposed to the precise line taken by the noble Baroness, Lady Young. It puts the House in a very difficult position when the Minister is trying to introduce his amendment and, at the same time, referring to another.
If we did not wait for the Minister to say something about his own amendment that would make the situation difficult and unsatisfactory. However, if he does so and then we are not allowed to speak, that too is unsatisfactory.
Lord Belstead: My Lords, in order to accommodate the House I think that we should proceed as I suggested. It seemed to me that the noble Lord, Lord Peston, was suggesting that all this procedure came as a great surprise. I do not think that the rules pertaining to the Report stage of a Bill should come as a great surprise to anyone. One must try to be ready for them.
Lord Grimond: My Lords, I hope that the noble Lord the Leader of the House will forgive me for saying that this has come as something of a surprise to me. I thought that I heard the noble Earl say very courteously that he was deliberately speaking earlier with a view to assisting the House. I understood that the rule in such a case is that other people are permitted to speak after him.
Lord Belstead: My Lords, I am afraid that the noble Lord, Lord Grimond, has bowled me out. I have just consulted my noble friend Lord Caithness and he has told me that he did just that. Therefore I must apologise to the House because if the noble Lord is correct— and I gather that he is— then that is indeed the case. Nonetheless, let us proceed as before. We shall be in order if we do so. Your Lordships have every reason to berate me.
Earl Russell: My Lords, I think that I made clear my basic point. I shall not pursue it any further.
Lord Peston: My Lords, would it help the noble Earl if I made my speech? Then he could reply on behalf of the Government. There are only a couple of points that I wish to underline. I preface them with the remark that it is already obvious that I am totally incompetent when it comes to procedure at any time.
There are two or three matters on which I should like clarification. First, the noble Earl is quite right, Schedule 1 is a kind of extensive definition of higher education. Does the noble Earl agree that this is precisely where the point raised by the noble and learned Lord, Lord Simon of Glaisdale, applies? I have no major concerns at the moment over Schedule 1 but obviously if the Government extend the loans scheme or were interested in extending what came under the general heading of higher education, I should like a reassurance that it would be done in such a way that noble Lords could make a proper contribution. The Government would respond to that contribution, or set of contributions, by saying, "Yes, we shall take it away and think further about it". That is what we are looking for— not ways of defeating the Government on regulations or amendments, but of making our impact felt.
I take it that in saying that he felt that the affirmative procedure ought to apply indefinitely the noble and learned Lord, Lord Simon of Glaisdale, was trying to get over the problem in practice. As a tyro, I do not care about the precise practice so long as I have the assurance from the noble Earl that if something happens here, noble Lords will be given the chance to participate in an important matter; namely, the definition of higher education.
I am not clear how my second question is affected by the affirmative versus the negative procedure problem. It refers to the Student Loans Company. As the noble Earl is aware, we labour under the difficulty that the Student Loans Company does not appear on the face of the Bill. However, every time we meet, the noble Earl tells us a little more that is useful about the Student Loans Company. To anticipate a remark I shall make later, if we were to spend longer on this we should eventually learn even more about the Student Loans Company. Although our knowledge has led us to a better understanding of the position with respect to the Companies Act, two other matters have become rather confused.
The noble Lord, Lord Grimond, asked whether questions about the behaviour of the Student Loans Company would be ruled out of order both in your Lordships' House and in the other place due to the manner in which we are dealing with the Bill. I then asked whether that problem would be solved if we had the affirmative versus the negative resolution procedure. I do not know the answer, but it is important.
More significant was the point made by one or two noble Lords, notably my noble friend Lord Jay, about how privatisation would proceed if it were to take place. To say the least, that is a little worrying. As I read the Bill— and I ask the noble Earl to confirm this— if the company were privatised, surely

593
all that would happen is that the Minister would make the Statement that he was privatising it. Our only method of discussing it would be to debate the Statement. That is worth thinking about.
Lastly, I can perhaps help the noble Earl. He may recall that I raised with him in Committee the point made by the noble Baroness, Lady Seear, about the real value of the loan. I could have sworn that he reassured me, and we agreed, that the Bill as drafted means— as the noble and learned Lord, Lord Havers, said— that the real value will be maintained and no more. I think I used those exact words myself. The noble Earl may have forgotten, but I think that he said yes, that was correct. I am not certain that he necessarily needs any further briefing; he answered the question a week or two ago. I remind him of that in case he has forgotten. I read the Bill to mean precisely what he has just suggested.
The Earl of Caithness: My Lords, with the leave of the House, perhaps I may say a word. I am still of the opinion that that is the meaning. The noble Baroness raised the matter and I was trying to be helpful when I said that I would look at it. Now that my noble and learned friend has given full support to my understanding of the Bill, I have even more confidence that I am right.
I turn to the two points on which we differ. As concerns administrative detail, I do not think, with respect, that I can help your Lordships any more. The matter is already covered by other legislation and other means.
I should like to discuss Clause 1 (4) further with my right honourable friend. I sense that the mood of the House is that your Lordships would like me to examine the point. I can assure your Lordships that I shall do so. I am not sure what the result will be. I have had one discussion with my right honourable friend. I know that he would like to read what your Lordships have said this afternoon.
Baroness Young: My Lords, I wish to thank my noble friend very much for his helpfulness. No one knows better than I how much work he himself has put into the Bill. As one who in your Lordships' House has from time to time had to take through legislation for a department in which I was not a Minister, I know how difficult it is to pick up the detail of a Bill in your Lordships' House when there are so many experts sitting around. I wish to place on record my gratitude to my noble friend for his helpfulness and for the immense amount of work he has put into the Bill. I also thank his colleagues who have been helpful. I am grateful for what my noble friend has said.
There are two points which worry, me. The first concerns arrangements. I concluded over the weekend, after I had considered the matter further and had learnt a little more, that this was something which could be difficult to put on to the face of the Bill. Everyone would acknowledge that it is extremely helpful to have obtained more information about the Students Loans Company. It will be useful to read in Hansard what has been said.
A far more important point concerns Clause 1 (4) and Schedule 1. I am grateful to my noble friend for
594
saying that he will take this away and examine it. It is a matter of great concern to all parts of the House. Although my noble friend has done so much, it would be helpful if he could do that as well. With the assurances that I have received, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
4.15 p.m.
Baroness Blackstone Baroness Blackstone moved Amendment No. 2:
Page 1, line 6, after ("loans") insert ("amounting to no more than 50 per cent. of public support").
The noble Baroness said: My Lords, we had some discussion of this amendment on the second day of the Committee stage. There was a great deal of support from all sides of the Chamber for the amendment. At the end of the debate, the noble Baroness, Lady Blatch, reassured us that she would be able to go back to her right honourable friend and let him know how much concern there was on the matter and how much support existed for the amendment. I am therefore a little disappointed not to see a government amendment on the Marshalled List. However, I have put my own amendment down a second time in the hope that there will be no difficulty for the Government in accepting it following the discussions that I assume have taken place with the Secretary of State for Education.
The reason so many people feel strongly about the amendment is that, were we to go above the 50 per cent.— and the Government have said quite clearly that they have no intention of doing so— we should undermine the very nature of the Bill. The legislation is based on the principle of top-up loans. The White Paper was entitled Top-up Loans for Students. All the consultation that took place in relation to the White Paper was based on that principle
To go above that amount would be undesirable because it would start to have an effect on access. As I said in Committee, in countries like the United States where a loans system is in place and has been for some years the vast majority of loans form a proportion lower than half of the total student maintenance. Further, because the debt would be so much larger, we would have far more cases of default. It seems right that we should have written on the face of the Bill that the proportion of total student maintenance made up of loans should be no higher than 50 per cent. That is what the Government say they intend. If that is their intention, it can be written on the face of the Bill without any difficulty. I beg to move.
Baroness Elles: My Lords, I wish to support the principle underlying this amendment. It was an undertaking given by the Government in the White Paper that at the end of the day the maximum top-up loan would be equivalent to 50 per cent. of the grant. There has obviously been a great deal of concern among students and academics as regards the way the top-up loans will work. In view of the fact that this measure is declared government policy, it would be a great advantage to have it written into the Bill so that it becomes part of the statute.
Lord Addington: My Lords, I wish to add my support and that of these Benches to the amendment. If we are to have top-up loans, it is only right that we should say that they will reach a finite level, as was originally set out in the White Paper. We are still discussing the ideas in the White Paper, or at least we are under that impression, so it is only reasonable that this measure should be written into the Bill.
Baroness Blatch: My Lords, we debated a similar amendment a week ago. I have, as I promised, reported the views expressed then to my right honourable friend the Secretary of State. I ought first to say that limiting the eventual value of the loan, in the way proposed in the amendment, is not as straightforward as noble Lords have suggested. In particular, we intend the loan to be available more widely than the mandatory grant. Therefore, if a student receives no grant, and we are to limit his or her loan to the 50 per cent. of public support referred to in the amendment, such a student would receive no loan at all. It is a statement of the obvious that 50 per cent. of nothing is nothing.
Nevertheless, let me assure your Lordships that we have no hidden agenda. We have said that we intend to increase progressively the amount of student support provided as a loan until it is in general terms equal to the grant. When that point is reached, probably early in the next century, our present intention is to keep that proportion constant, with the grant and loan each being uprated in parallel. But what should be done at that point will be a matter to be decided by the government of the day.
I therefore undertake to bring forward for Third Reading an amendment which will write our present intentions, as I have described them, into the Bill while providing also a mechanism for a successor government to bring some variation, should they so wish, before both Houses of Parliament. In the light of those remarks, I hope that the noble Baroness will feel able to withdraw the amendment.
Baroness Blackstone: My Lords, I am grateful to the noble Baroness who is speaking for the Government for that reply. I am particularly glad to hear that there is no hidden agenda. I had hoped she would tell us today that this amendment was acceptable. I was also interested to hear her say that the 50 per cent. point would be reached early in the next century. The noble Baroness was a little more precise in Committee, when the year 2007 was mentioned. A number of estimates have been made which suggest that the loan portion will be equal to the grant by about 1999 to 2000. Perhaps the Government too have reached a similar conclusion. If we are to reach that point considerably earlier, the need to have statutory control over the loan portion is all the more important.
However, in the light of the promise of the noble Baroness to table an amendment on Third Reading, I am willing not to press this amendment any further today. On the other hand, I wish to make it absolutely clear that, unless a satisfactory amendment is tabled with respect to the principle that lies behind the amendment that I have moved today, I shall have
596
no hesitation in pressing the point on Third Reading and shall probably wish to divide the House on it. In the circumstances, however, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
Baroness David Baroness David moved Amendment No. 4:
Page 1, line 7, at end insert ("and shall within twelve months of the making of such arrangements, and annually thereafter, lay before Parliament the information specified in section (Monitoring of scheme: participation in higher education) below.").
The noble Baroness said: My Lords, in moving Amendment No. 4, I wish to speak also to Amendment No. 53. Amendment No. 4 is a paving amendment for the new clause contained in Amendment No. 53 which I moved in the early hours of 20th March last week. This is a very important pair of amendments because, although we have received constant assurances that the scheme will be monitored, there is nothing in the Bill to say that that will be so. These amendments therefore seek to ensure that there will be full and proper monitoring of the loans scheme and its effects, particularly on participation and particularly as regards the groups which seem most threatened by the student loan scheme.
Ministers in both Houses have stated that there will be monitoring, both of financial costs and of participation. The Secretary of State stated on Report in the House of Commons:
"I assure my honourable Friend the Member for Leeds, North-West (Dr. Hampson) that we shall be monitoring the scheme".— [Official Report, Commons, 15.2.90; col. 448.)
Unfortunately, the mechanisms cited as examples for such monitoring present no new initiatives specific to the loans scheme, particularly concerning its effects on participation. Answers to parliamentary Questions on the current situation and likely effects on disabled students have shown a gap in knowledge within the DES. Similarly, parliamentary Answers to Questions concerning the withdrawal of benefits from students have shown that the information available is too limited for such policies to be confidently implemented.
The Secretary of State has said that the Select Committee on Education and Science may consider such information, but that is not the function of that committee. Reference is also made to the possibility of income and expenditure surveys. Again those are vague references and will only provide limited ad hoc information. Annual reports and accounts of the Student Loans Company Limited have been promised although the level of scrutiny to be undertaken in Parliament is minimal.
In several debates on the final day of the Committee stage in this Chamber the noble Earl, Lord Caithness, gave assurances that the effects of the scheme on various groups such as people with dependants, women and certain other kinds of students, would be carefully monitored. The noble Baroness, Lady Blatch, stated in a similar response on behalf of the Government,
"I return to the basic assumption that we make and repeat the caveat that the scheme will be monitored".
However, the Government have still not specified how the monitoring will take place, especially in relation to participation. The loans scheme is controversial and new and it deserves to have full and proper monitoring. The experience of loans schemes abroad shows that, regardless of overall rates of participation, any problems resulting from participation are felt most acutely by certain groups of the population, as identified in the list in Amendment No. 53. While no one can know the precise likely effect of the scheme until it is in operation, clear mechanisms must be set up to ensure that information that is needed to make a meaningful assessment of the positive or negative effects of the scheme will be collated.
The noble Baroness stated on 19th March:
"It appears to me that throughout the first day of the Committee stage and, indeed, today I have given a number of assurances that monitoring of the scheme will take place. We regard monitoring as extremely important. The details of the scheme are not set in stone, and the Bill is designed to permit a swift response through regulations if changes are required. The effect of loans on participation is one of the major areas in which the monitoring effort will be concentrated". — [Official Report, 19.3.90; col. 180]
The noble Baroness then proceeded to talk about general monitoring on participation, which is supposedly to be undertaken by the Government. However, what she had to say had little to do with the amendment and gave no details about how the monitoring of the loans scheme will take place. Research on schemes abroad and on the intentions of people considering entering higher education in Britain suggests that, regardless of overall rates of participation, any problems with the scheme are felt most acutely by certain groups in the population, as identified in the amendment. I hope that after all those promises about monitoring the Minister will be able to accept that the new clause should go into the Bill so that there is a provision on the face of the Bill. I beg to move.
4.30 p.m.
Lord Kilmarnock: My Lords, this seems to me to be an important amendment and I think that the noble Baroness has made an almost overwhelming case for it. There are two bodies of opinion about this Bill. There is the opinion of the Government, who bold that the scheme which they are proposing will not impede greater access or deter wider participation in higher education. There is another equally well-informed— some would perhaps say better-informed— body of opinion which harbours severe doubts about this and feels that there is likely to be a deterrent effect upon the expansion of higher education.
However, in relation to both these views at the moment we are simply in the realm of assertion; in the realm of opinion. We do not know. As the Government profess exactly the same ambition as the rest of us— namely, to increase participation in higher education— surely we need to know exactly how the scheme is working, what effect it is having, what new types of student are coming forward and details; of that sort which are specified in this new clause, and no doubt others could be added. This information would be forthcoming and on the table for everybody to see if the new clause were accepted.
598
Answering the noble Baroness, Lady David, in Committee when she proposed almost the identical amendment, the noble Baroness, Lady Blatch, made some extremely interesting observations on the Companies Acts. The noble Earl has also referred to these matters and to company law this afternoon. Naturally the Student Loans Company will have to observe company law but the information to be filed with Companies House is not remotely comparable to the information sought in this amendment. I happen to be the secretary and director of a small company. I have to file information with Companies House and it certainly does not embrace any of the types of information that are specified here. It is to do with entirely different matters which are required for the observation of company law.
Even if the annual report and accounts are sent by the Student Loans Company to the Secretary of State, as the noble Earl, Lord Caithness, said they would be, the Secretary of State will in fact be none the wiser about the matters mentioned in this new clause. This means that, as the Bill is written, those of us who are interested in this information will have to tease it out through a whole series of Parliamentary Questions for Written Answer which the department's civil servants will have to answer.
As this information will have to be provided for that purpose and as the noble Baroness acknowledged at col. 180 of the Official Report in Committee that monitoring would take place, and the noble Baroness, Lady David, has already referred to this, I can see no reason why the fruits of such monitoring should not be made available openly to Parliament. It would not even require any more work because the noble Baroness, Lady Blatch, has told us that it is already going to take place; but it would be an earnest of the Government's genuine concern with widening access and increasing participation.
It amazes me that there should be— perhaps there will not be— any objection to the acceptance of this amendment. I can see absolutely no reason why the Government should not accept it. I think it would be thoroughly in the spirit of what they say they want to do— which is to widen access and to increase numbers in higher education— to put this information annually on the table, which they will be collecting in any case so there will be no additional public expense involved. I should be amazed to hear that the Government are not going to accept the amendment.
4.30 p.m.
Baroness Elles: My Lords, I accept the desirability of monitoring such a scheme but I wonder whether I could speak against both the first amendment and the one setting out the detailed form of monitoring. Where there is government money involved over a period of time, where there are going to be loans coming from the Treasury, it is automatic that there will be monitoring of what expenditure the Government are going to have to face in the form of loans over the coming year. It therefore seems to me that it is a work of supererogation to put into a Bill of this kind, where public money is involved, that the Government should monitor the future

599
expenditure. It seem to me totally unreasonable and unnecessary. Clearly it will be done, and I am sure that we shall be able to hear my noble friend Lady Blatch or my noble friend Lord Caithness spelling out what kind of monitoring they intend to do.
Secondly, with regard to the details which are laid down in Amendment No. 53, I must say that my heart failed me when I saw once again that only under paragraph (e) are there "women students". What we always heard in the European Parliament was "handicapped, disabled, young" and "women" at the end. It became a sort of litany that I tried to stop. Clearly women can be from any socio-economic background, they can belong to an ethnic minority, regrettably they can have disabilities, and many of us, alas, can be over 25 years of age. It therefore seems to me that his kind of list is again a work of supererogation.
The Government will be monitoring the type of students who will be going and the type of people who will be able to benefit from the new opportunities in higher education, and they should not be classified in paragraphs labelled (a) to (0, with, if I may say so specifically, "women students" as paragraph (e). Although my noble friends will no doubt take on board the kind of information that will be required and obviously the necessity of monitoring the process of the top-up student loans, I hope that they will not accept these specific amendments.
Lord Dormand of Easington: My Lords, I intervene briefly because I am puzzled and I wish genuinely to seek information about the question of monitoring. I remember very well the noble Baroness, Lady Blatch, saying the words quoted by my noble friend Lady David. I was under the impression that monitoring was to take a specific form that we would all know about. I have to say that I do not get that impression from what has been said in this debate so far.
If I may refer to two specific categories of person, if I can so describe them, perhaps it will illustrate my ignorance on the situation. I do so because I hope that I can get the information that I requested at first. If we look at the position concerning disabled people— presuming that the Government are as concerned about disabled people as they always say they are in other legislation that we have in your Lordships' House— I understand that the surveys (if surveys have taken place) concerning attitudes to loans have not been specifically directed to disabled people.
I think all of your Lordships know that those with disabilities have greater difficulties in finding full-time work. I happen to know— I am sure that all your Lordships do— that it is a matter raised frequently in another place, and some of us think with very unsatisfactory replies from the Government. Those who have earnings receive on average up to 19 per cent. less than their able-bodied counterparts.
I am associated with organisations for the disabled in my area. I know that they approach these matters with great trepidation. I spoke to one group recently about the Bill before your Lordships' House today, and I found a considerable fear— I put it as strongly
600
as that— not only among disabled people but among parents who have disabled families who perhaps would have no choice but to take the provisions of this Bill. That is one group, but one could go on beyond that.
I turn now to the other group of mature students, and I do so because, if I may so describe it, during the second part of my education I was a mature student. It is something I maintain a great interest in, and there is no doubt whatever that for older students finance is a crucial factor in deciding whether to study. May I just inject a personal note. I said that I was a mature student at one period of my life. I found that to complete my course I had to borrow money from my brother. There is perhaps nothing startling about that except that he was a coalminer and I was much better qualified than he was; he did not exactly have money to throw away. Had it not been for that I should not have been able to complete what was generally considered to be an important university course.
I know that there have been studies in other countries— I hope that the Government have looked at these— concerning mature students. On other Bills that have come before this House we have discussed the need for mature students in education— if I may say so, in almost any form of education these days— where the benefit of their experience, maturity and so on is more necessary now than ever, particularly having regard to what is said in your Lordships' House about the value of education and training, whether for business, industry and so on or for its own sake, and all the inadequacies at the moment. I hope that we shall hear something more specific about how the monitoring is to be carried out and that the Government will give specific example as to how it is to be done.
Lord Grimond: My Lords, perhaps I may make one brief point with regard to Amendment No. 53. It refers to gathering,
"information relating to the effects of the loans system on the participation of students".
Throughout subsection (2) there are references to students. That might be all right so far as it goes, but the important statistic about the loans system will be to find out how many people are deterred from becoming students by the prospect of having to take out loans. I wonder whether, if we accept the amendment, we can be assured that information will also be gathered from school-leavers and others who do not become students to find out whether the imposition of loans was a serious factor in their decision.
Baroness Phillips: My Lords, I should like to make a slightly different point. Bearing in mind our earlier discussion, whichever way the government reply one has the impression that they are forcing the legislation through the House. There is a new habit, introduced by the Government, of tabling important amendments on Report. It has even happened once or twice on Third Reading. Knowing the rules of the House, the Government then try to resist any discussion. I do not have to tell the Government that they are in a vulnerable position. People are discovering all kinds of strange anomalies in the

601
operation of the community charge which were not on the face of the Bill and which we questioned. All sorts of strange things are now coming up with which we shall deal on another occasion.
The idea of a company operated by a government is an important new idea. The company will have 170 staff who must be adequately paid. Offices must be provided. Presumably the cost will have to be met by the interest imposed on students. My noble friends on the Front Bench tell me that that is not so. In that case it will be a cost to the Government. The statement in the Bill that there will be no increased cost is therefore wrong. The Government cannot have it both ways.
I appeal to the Government: this important proposal should be included in the Bill. If it is resisted and pushed to the vote, the Government will once again rightly be held up as forcing through legislation which has not been thought out. I do not think that that is a good idea. They are in a vulnerable position.
Baroness Lockwood: My Lords, I should like to support these two amendments. I was rather disappointed at the intervention of the noble Baroness, Lady Elles, who opposed the amendment. In our discussion in Committee, there was nothing to indicate that the Government would automatically monitor the scheme. As I read the amendments, they are not concerned with accounts and the auditing of accounts. They refer to the participation of students in higher education. We must therefore monitor the trends.
The trends about which we are concerned are those involving the groups mentioned in subsection (2) of Amendment No. 53. Those groups of students will be particularly at risk under the students loan scheme. They are the groups from which we must recruit more students if we are to maintain and increase the total output of graduates in years to come.
In defence of subsection (2) (e), which concerns women students, I must point out to the noble Baroness that although we find women mentioned in the other categories, their work patterns are still vastly different from those of men whom we find in all the groups. It is because of that difference that we are particularly concerned about women. If they retire from the labour market for a few years shortly after taking their degrees they will retire with a loan on their hands. We know that on average women do not earn as much as men. So the problem of repaying the loan will be a greater deterrent to women than it is to men. We have still not achieved the goal of equal participation of women in higher education even before the introduction of the students loans scheme. That group must be monitored and assisted in every way. I hope that the Minister will be able to give a much more positive response to the amendment than she did to the amendment proposed in Committee.
4.45 p.m.
Baroness Young: My Lords, I am not anticipating what my noble friend Lady Blatch will say in response to the amendment. Like everyone else, I have reread what was said in Committee. Perhaps
602
I may take the House back to the White Paper which stated:
"The Department of Education and Science will monitor the introduction of the new regime, so as to measure its effects on such matters as participation by social class or gender".
I shall not quote the rest of the paragraph: what I have read sets out the intention clearly.
It would be helpful if my noble friend could tell the House whether we have any further news on the statement that,
"preparations [are in hand] for a further survey of students' income and expenditure to be undertaken before the introduction of the new regime, so as to provide a base-line".
That seems to answer the point clearly, although I agree entirely with my noble friend Lady Elles when she says that the Government will monitor the scheme, will have an agreed base line from which to monitor it and will take into account the points raised in the amendment.
Baroness Darcy (de Knayth): My Lords, perhaps I may offer a brief but warm word of support for the amendments. Predictably, it is the mention of students with disabilities which has drawn me into the discussion. As the noble Baroness, Lady David, said, there is little information available on the problems and circumstances faced by students with disabilities. It is important to have specific information. It is particularly important that we should know exactly what will be the impact of the loans scheme on people who, as the noble Lord, Lord Dormand of Easington said, might well have difficulty finding jobs, might be in lower paid jobs and, especially relevant, might have less disposable income to pay off what might be slightly larger loans than their able-bodied peers.
Baroness Blatch: My Lords, I hope that the House will forgive me if my response is somewhat repetitious of the answer I gave in Committee.
The substantive amendment has been tabled and discussed twice before, once in this House and once in another place. I recognise the concern which prompted the amendments and I want to emphasise that we regard monitoring as vitally important. As I said, the details of the scheme are not set in stone and the Bill is designed to permit a swift response through regulations if our monitoring shows that changes are required. The effect of loans on participation is one of the major areas in which the monitoring effort will be concentrated.
As my noble friend, Lady Young said, the White Paper said that the Department of Education and Science would monitor the scheme,
"so as to measure its effects on such matters as participation by social class or gender".
The monitoring strategy is being developed in parallel with the detailed definition of the operational methods of the scheme which are outlined in the rules and procedures documents published before Second Reading and today. We shall no doubt need to include further income and expenditure surveys. In reply to my noble friend Lady Young, I must point out that a further survey of income and expenditure of students has been undertaken since the publication of the White Paper. I believe that the results have been published.

603
I can assure noble Lords that, in considering the development of student support— by that I mean annual upratings and revisions as well as the long-term direction— we shall consider information on participation overall and by specific groups such as those identified in the amendment and in particular the disabled.
As we indicated at Committee stage, monitoring will take place alongside our more general monitoring and evaluation of higher education policies, including the promotion of improved participation and access for groups which are traditionally under-represented.
If changes to the scheme prove necessary, the Government will seek to implement them through the regulations. We expect to make available to Parliament information arising from DES monitoring, such as future income and expenditure surveys. I can assure noble Lords that Parliament will have no lack of information. My right honourable friend is accountable to Parliament for all education policy and the other place and its select committee will be able to probe in the usual way.
There is no need for an elaborate statutory framework for monitoring. The Government are alive to the importance of monitoring the effects of the loans scheme and in particular the effect on participation by under-represented groups.
I cannot emphasise enough that a major objective of the loans scheme is to increase access. In reply to the point made by the noble Lord, Lord Grimond who was concerned about those young people who do not come into the system, if the survey shows that access is not increasing, looking at specific groups in particular, one will want to know why. In looking to see why, one must identify those young people who do not make decisions to come in. If the loans scheme is a deterrent, clearly modifications will have to be made.
With regard to particular groups, I note what my noble friend Baroness Elles said about women. At the moment considerable monitoring takes place and we know that many women are taking out loans at a very high cost to themselves. One hopes that the loans scheme will at least provide some access to cheaper money for those who require it in order to complete their courses.
The noble Baroness, Lady David, made her case very well. It is an important point and I hope that I have emphasised sufficiently that the Government take very seriously the issue of monitoring. Given that assurance and those I previously gave, I hope that she will feel able to withdraw the amendment.
Baroness David: My Lords, first, I should like to thank all those who supported the amendment. I was glad that the noble Baroness, Lady Young, quoted the passage from the White Paper on monitoring and that the noble Baroness, Lady Blatch, responded to the very good point made by the noble Lord, Lord Grimond. However, I am sorry that the noble Baroness, Lady Elles, objected to women coming in in fifth position.
604
I should like to say a few more words about women. In his Lancaster speech, Kenneth Baker predicted that in 25 years' time women would be in a majority in higher education. But surveys still show that women have objections to taking out loans to pay for their higher education. I have received a copy of a letter which the principal of my old college, Newnham in Cambridge (which is a college entirely for women), wrote to the Secretary of State after its governing body had expressed a great deal of misgiving about the scheme. She speaks for the governing body and writes:
"our experience tells us that the inevitability of indebtedness after graduation … and the size of the debt will, at least in the short term, deter some women from entering higher education."
"There is still a surprising reluctance in some families right across the social structure to support daughters in higher education or even in aspiring to it. The idea of being in debt, even for the best of purposes, is still seen as less acceptable for women than for men; and the unhelpful notion of 'negative dowry' is still alive and well in the minds of both men and women, parents and their children. Perhaps even more important, the understanding that higher education is a good and necessary thing is not yet widespread or strong enough to overcome the attraction of immediate earning power, let alone incur debt to acquire it".
I believe that there is a problem about women and the other groups mentioned in the amendment. As there are such strong intentions regarding monitoring, I am very disappointed that we cannot have it on the face of the Bill. This is very important. With the support that I have had for the amendment, I feel that I should test the opinion of the House.
4.55 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 95; Not-Contents, 111.

DIVISION NO. 1

CONTENTS

Addington, L.

Grimond, L.

Adrian, L.

Hampton, L.

Allen of Abbeydale, L.

Hanworth, V.

Alport, L.

Harris of Greenwich, L.

Aylestone, L.

Hatch of Lusby, L.

Beloff, L.

Hirshfield, L.

Birk, B.

Houghton of Sowerby, L.

Blackstone, B.

Howie of Troon, L.

Blease, L.

Hunt, L.

Blyth, L.

Hylton-Foster, B.

Bonham-Carter, L.

Jay, L.

Bottomley, L.

Jenkins of Hillhead, L.

Broadbridge, L.

Jenkins of Putney, L.

Bruce of Donington, L.

John-Mackie, L.

Carmichael of Kelvingrove, L.

Kearton, L.

Kennet, L.

Cledwyn of Penrhos, L.

Kilbracken, L.

Cocks of Hartcliffe, L.

Kilmarnock, L. [Teller.]

Dacre of Glanton, L.

Kinloss, Ly.

Darcy (de Knayth), B.

Kirkwood, L.

David, B.

Llewelyn-Davies of Hastoe, B.

Davies of Penrhys, L.

Dormand of Easington, L.

Lockwood, B.

Ennals, L.

Longford, E.

Falkland, V.

Mackie of Benshie, L.

Flowers, L.

Mais, L.

Gallacher, L. [Teller.]

Mayhew, L.

Galpern, L.

Milner of Leeds, L.

Gladwyn, L.

Monkswell, L.

Graham of Edmonton, L.

Murray of Epping Forest, L.

Gregson, L.

Nicol, B.

Grey, E.

Ogmore, L.

605

Peston, L.

Stoddart of Swindon, L.

Phillips, B.

Strabolgi, L.

Ponsonby of Shulbrede, L.

Taylor of Blackburn, L.

Porritt, L.

Tonypandy, V.

Rea, L.

Tordoff, L.

Ritchie of Dundee, L.

Turner of Camden, B.

Robson of Kiddington, B.

Underhill, L.

Rochester, L.

Wallace of Coslany. L.

Russell, E.

Walston, L.

Russell of Liverpool, L.

Warnock, B.

Sainsbury, L.

Wedderburn of Charlton, L.

Seear B.

White, B.

Seebohm, L.

Wigoder, L.

Serota, B.

Williams of Elvel, L.

Shaughnessy, L.

Winstanley, L.

Simon of Glaisdale, L.

Winterbottom, L.

Stedman, B.

NOT-CONTENTS

Airey of Abingdon, B.

Kinnaird, L.

Aldington, L.

Kinnoull, E.

Alexander of Tunis, E.

Lauderdale, E.

Allerton, L.

Layton, L.

Annaly, L.

Liverpool, E.

Balfour, E.

Long, V.

Belhaven and Stenton, L.

Lyell, L.

Belstead, L.

McColl of Dulwich, L.

Blatch, B.

Mackay of Clashfern, L.

Borthwick, L.

Manton, L.

Boyd-Carpenter, L.

Margadale, L.

Brougham and Vaux, L.

Marshall of Leeds. L.

Butterworth, L.

Merrivale, L.

Caithness, E.

Mersey, V.

Campbell of Alloway, L.

Milverton, L.

Campbell of Croy, L.

Mountevans, L.

Carnegy of Lour, B.

Mountgarret, V.

Carnock, L.

Mowbray and Stourton, L.

Carr of Hadley, L.

Munster, E.

Clanwilliam, E.

Napier and Ettrick, L.

Coleraine, L.

Nelson, E.

Colnbrook, L.

Newall, L.

Constantine of Stanmore, L.

Norrie, L.

Cottesloe, L.

Nugent of Guildford, L.

Cox, B.

O'Brien of Lothbury, L.

Cullen of Ashbourne, L.

Onslow, E.

Davidson, V. [Teller.]

Oppenheim-Barnes. B.

Denham, L. [Teller.]

Orkney, E.

Derwent, L.

Prior, L.

Eccles, V.

Rankeillour, L.

Eden of Winton, L.

Reay, L.

Ellenborough, L.

Renton, L.

Elles, B.

Renwick, L.

Elliot of Harwood, B.

St. Davids, V.

Ferrers. E.

Sanderson of Bowden, L.

Fraser of Carmyllie, L.

Selkirk, E.

Fraser of Kilmorack, L.

Sempill, Ly.

Gainford, L.

Skelmersdale, L.

Gardner of Parkes, B.

Strange, B.

Geddes, L.

Strathclyde, L.

Gibson Watt, L.

Strathcona and Mount

Goold, L.

Royal, L.

Gray of Contin, L.

Strathmore and Kinghorne, E.

Gridley. L.

Haddington, E.

Swansea, L.

Harmar-Nicholls, L.

Terrington, L.

Harris of High Cross, L.

Teviot, L.

Havers, L.

Thomas of Gwydir, L.

Henley, L.

Thorneycroft, L.

Hesketh, L.

Trumpington, B.

Hives, L.

Ullswater, V.

Holderness, L.

Vaux of Harrowden, L.

Hooper, B.

Westbury, L.

Johnston of Rockport, L.

Wise, L.

Joseph, L.

Wynford, L.

Killearn, L.

Young, B.

Kimball, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.2 p.m.
Lord Peston Lord Peston moved Amendment No. 5:
Page 1, line 15, at end insert ("and such conditions may include a provision that only students commencing their courses in or after the academic year 1990–91 shall be eligible students."
The noble Lord said: My Lords, we have debated this matter already. I would not normally come back to your Lordships with such an amendment again except that I have been reflecting on the matter since we last debated it. I believe that it is an amendment of such seriousness that we ought at least to have one more chance to consider whether we are doing the right thing.
As noble Lords will recall, when we debated the amendment as to whether the scheme should apply to all students currently in higher education plus the new students who will be coming up in 1990–91— assuming that the Bill becomes an Act— noble Lords from all sides of the House admitted that there was at least a genuine question of whether it would be equitable for the Bill to apply to those who are already students.
In referring this matter yet again for your Lordships' consideration, I have this point in mind. If the loans scheme did not apply to students who are already there, any enhancement of their awards would be solely in the form of an increase in maintenance grant corresponding precisely to the uprating that the Government are bringing in plus the loan. The loans scheme would apply only to new students.
Let me remind noble Lords of the arguments. There are two aspects to the case. I shall deal with them as briefly as I can. It is solely because I believe that we need one last chance on this aspect that I bring it before your Lordships. On the equity argument, it seems wrong to say that students who went to university one year or two years ago did so in the knowledge that a loans scheme would be coming into existence in time to affect them. My view is that that is not the case. I have asked my students about it. I do not think that they are particularly backward but some of them do not seem to believe that the loans scheme will apply to them next year. I have made that plain to them. They assure me that they were totally unaware that the scheme would affect them.
If one looks at the further evidence gathered by the National Union of Students, I believe that it fairly reflects the position of students. The union feels that the scheme is inequitable. It did not expect the scheme to apply to those students. There remains the residual element of uncertainty. The Bill may not yet become an Act of Parliament in time for the coming academic year. However, I leave that issue to one side. The union feels that on the grounds of equity your Lordships ought at least to consider the matter yet again.
On the practical argument, I have no intention of crowing over the consequences of the poll tax or community charge legislation on which the Government have impaled themselves. However, there is no doubt that all governments might learn from that that there are good, practical reasons for proceeding rather cautiously when one enters into such new areas.
If the Government wish to go ahead (and I have certainly learnt by now that the Government are very keen to go ahead; it is not apparent to me why) one of the roles of your Lordships' House is to suggest to the Government on this virtually last occasion that perhaps they ought to go ahead more slowly. I do not refer to delaying the Bill. We have discussed that matter. I cannot remember whether we were defeated or withdrew the amendment, but we could not persuade the Government on such an amendment. I refer to limiting the Bill to those who will be students in the coming year. I repeat the point and apologise for going in part over old ground again. The matter is serious enough to warrant a few moments yet again of your Lordships' time. If enough noble Lords on reflection change their minds, perhaps between us we can persuade the Government to change their mind.
Lord Addington: My Lords, I should like to add my own support and the support of these Benches for the measure. The noble Lord has given a fair summing up of the reasons why I feel that students who are attending an institution of higher education under the grant system— and this scheme will predominantly affect those who are on full grants or in receipt of the higher proportion of grant— should continue to receive their funding in that way as those are the terms on which they entered their course.
The equity case cannot be too heavily emphasised. The average 18 year-old who is worried about going to university is not worried about legislation in Parliament. He is not concerned. Most parents are not concerned about it either. Those are the terms on which the students enter the course. Surely they should be allowed to finish the course on those terms.
The Earl of Caithness: My Lords, as the noble Lord, Lord Peston, has reminded us, the amendment is similar to an amendment that we debated in Committee. It seeks to give the Secretary of State the option of making ineligible for loans all students beginning their courses before the academic year 1990–91. The amendment therefore drives a coach and horses through what the Government intend.
The amendment is unnecessary. The Bill as drafted would allow the Secretary of State to exclude students part-way through their courses if he saw fit. However, as your Lordships know, we do not intend to exclude the majority of students from the increase in resources from this autumn. It is our intention that loans should be available to all eligible students in the autumn of 1990, not just new entrants in that year. That is a much more forceful argument than the one put forward by the noble Lord, Lord Peston, on the grounds of equity.
As the noble Lord will know, the grant is means-tested. It is not available to all students. If one happens to be a student at the moment and does not qualify for grant, the noble Lord says that one cannot have a loan, either. I do not believe that it is fair to deny existing undergraduates top-up loans. Those who have grants would also like to benefit from the increased resources which the Government
608
are providing. To deny them that would be very wrong.
When I read the Official Report, I noted the words of the noble Baroness, Lady Blackstone. She suggested that she could accept more easily that students already in higher education should receive loans if the access funds were higher. As noble Lords know, we have been looking at the question of the access funds. Your Lordships will be delighted to know that my right honourable friend the Secretary of State has this afternoon announced that there will be a doubling (from £ 10 million to £ 20 million) of the access funds for higher education. We shall be going into that matter in a great deal more detail.
My noble friend Lady Blatch has also answered a Question in this House, but I thought that your Lordships would like to have that information at an early opportunity. It will go a long way towards meeting the anxieties behind the amendment and some other amendments such as that concerning housing which the noble Lord, Lord Addington, has pursued with vigour and which no doubt the noble Lord, Lord Peston, will pursue later this evening.
I remind the House that eligibility for the loan will be governed by regulations to be made under Clause 1 (2) (b). When they are first made they will now be subject to an affirmative resolution. Therefore your Lordships will have an opportunity to debate them.
Lord Peston: My Lords, I thank the noble Earl for his answer. I am delighted to hear what he had to say about the access funds. I look forward to hearing more details when we have an opportunity to discuss the matter. All of us who are concerned with higher education, whether or not we like the Bill, will regard as highly desirable any measure to provide more funds to help students.
I am not clear whether or not the access fund meets my problem with respect to students who are already in situ. I shall have to reflect on that matter. We shall have ample opportunity later this afternoon or this evening to consider how the access funds relate to housing benefit.
Perhaps I may also thank the noble Earl for yet again clarifying the Bill. The Secretary of State, when he makes the regulations, could meet my amendment by excluding second and third-year students. I take it that the Secretary of State reads every word that we say in your Lordships' House, and he might regard our contribution as suggesting that that would be a more appropriate set of regulations.
Although I had given some thought to dividing the House, in the circumstances I do not believe that it would be appropriate at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Lord Addington Lord Addington moved Amendment No. 6:
Page 1, line 15, at end insert ("and such conditions may include a provision in respect of students attending courses of higher education of longer than three academic years' duration that they shall incur no liability in respect of any loan given for a fourth year or subsequent period").
The noble Lord said: My Lords, the amendment deals with the problem of students who are taking courses longer than the standard three-year course with which the White Paper was solely concerned. As the noble Earl said, I have been ploughing this furrow for a considerable time. I am becoming rather tired of doing so because it is a problem which has not been addressed so far.
I have raised the issue on behalf of students in Scotland. Virtually every Scottish institution appears to have raised the point. Their students on honours courses are taking four-year courses. That means one extra year of debt as a result of requiring funds for that additional year. It means an additional year in which interest accrues on that debt at the rate of inflation becuse students do not earn and so cannot pay back the loan
Dozens of other groups of students are affected. Those taking B. Ed. courses are affected for the same reason. Many medical practitioners— doctors and dentists— are affected. So are architectural students who study for five years. Although that includes two years, of vocational work outwith the course, that is generally for very low salaries. Therefore there are many groups of students who are affected by the general approach of the White Paper and of the Bill.
Many noble Lords have raised the point. Three amendments were tabled in Committee, including those in the names of the noble Earl, Lord Haig, and the noble Lord, Lord Colwyn. The Minister made many helpful sounding remarks. However, I should very much like to hear what he proposes to do. There is obviously a very big hole in the Bill. Unless we plug it, we shall effectively exclude certain people from certain courses. Scottish students will be encouraged to attend courses in England. However, as I have pointed out during the passage of the Bill, Scottish students who have taken Highers are not well equipped to take courses in England because those courses are designed for students who have taken A-levels. It is also the case that Scottish institutions which offer four-year courses and take 25 per cent. of their students from outwith Scotland will probably lose those students. That is especially so if the students are dependent on state funding and come from the lower income bracket, for the simple reason that it will cost them more money.
In view of all those factors, which seem to roll around like a ball in a pinball machine, I hope that the Government will say exactly what they propose and how they intend to deal with the problem of those students who do not come within the scope of the three-year course. I beg to move.
Lord Adrian: My Lords, I support the amendment particularly from the point of view of medical students, of whom I was one a good many years ago. It is my understanding that a principle behind the Bill is that a university education gives a greater chance of earning a reasonable salary in later life. However, are doctors or dentists, or others whose courses are longer than the standard three-year course, conspicuously higher earners than those on three-year courses?
In about 10 years' time, if inflation continues at its present rate— I hope it will not but it may do so, or even be higher— a doctor will qualify with a debt
610
of about £ 14,000. That is a considerable sum of money. It appears to be a substantially higher debt in proportion to the greater earnings of a doctor in comparison with, for example, a banker who has taken only a three-year degree. I therefore have a great deal of sympathy for the amendment, which would limit the liability of students on courses of longer than three years to the three-year debt of the student on the normal course. I support the amendment.
Lord Grimond: My Lords, I also support the amendment, both from the point of view of students such as medical students, who not only have a longer period of training but are put to some considerable extra expense, and from the point of view of Scottish students.
My noble friend and others have argued their case very cogently. I should like to emphasise the question of inflation which has just been mentioned. The loans are said to be interest-free but they are repayable with real money. That might be a very large and open-ended liability. Students may be well advised to take out a loan at a fixed rate of 5 per cent. I only mention that, however, to show that the loans are not quite the splendid gift which they are sometimes made out to be.
As regards the Scottish students, the Scottish system of education is different from that in England. One way in which it differs is that some of the matters— and I must tread rather delicately because this is a generalisation and is not always true— which are dealt with in England in the higher forms at school are dealt with in Scotland at the universities. No doubt they are better dealt with, but to some extent the same ground may be covered. That means that very often Scottish students go earlier to university and look upon their first year as part of their general education.
On Second Reading I argued that there is a great public interest in sending students to universities, apart from their private gain. It is a great advantage to the country as a whole that students should gain what they can from universities as citizens quite apart from increasing their earning capacity.
In my view, Scottish students have a right to look forward to the same amount of public support up to the time that they go on to their honours courses— that is, the second, third and fourth years. I do not believe that it would be contrary to the spirit of the Bill— whether or not noble Lords agree with that— that the Scottish students should be supported by grant during their first year at university or, at any rate, some provision should be made so that they do not have to take on repayment of a loan the consequences of which, as previous speakers have said, may be extremely serious. As I say, there is clearly a similar case for those in the professions who require more than three years to qualify.
Therefore, I hope that the Government have listened to the arguments and will give them further consideration. I hope that they can assure the Scottish universities, which are very worried about this matter, that their position is understood and that the Government have some proposals for meeting their anxieties.
Baroness Elliot of Harwood: My Lords, I support what the noble Lord, Lord Grimond, said. On returning to the House this morning I found a very moving letter from the president of the students' union at Glasgow University. That laid out very clearly what this Bill will mean to them since so many Glasgow students study for four years, and if they are on a professional course— for example, a medical course— they may stay on for five or six years. It will make an enormous difference to them if they can have some relief for at least one year whether it is the first or fourth year, so that they do not have to pay so much. That it is extremely important. I hope that the Government— because they do consider Scotland on these occasions— will think again and make some gesture towards the Scottish students.
Baroness Carnegy of Lour: My Lords, I do not believe that the Government are likely to forget Scotland on any subject at present. I regard this as a rather difficult problem. I have discussed it with a group of students whom I happened to meet. Some were just leaving Aberdeen University, and some were still studying there. We tried to sort out the justice in all this. They recognise that if they are on a four-year course— and I am sure that students on four-year courses elsewhere recognise this— they are receiving from the public their fees and their proportion of maintenance for four years instead of three. Therefore, they are receiving more from the taxpayer than those students on a three-year course.
Those students said that they practically all leave with some debt, and because they are on a four year course they often take out quite a large loan from the bank. Those students are extremely interested in this scheme. In trying to sort out whether they should have one year of grant paid, one point which arose was that in England students are at school during the equivalent of the first year at university in Scotland. The noble Lord, Lord Grimond, who knows a great deal about this, mentioned that point. They said that English students are supported by the public while at school, but if you leave school earlier and go to a university such as Aberdeen, then you are not so supported. Therefore, the question of the loan arises.
This aspect is extremely difficult. It would be a great help if something could be done. However, I do not believe that the argument that a student should have a loan for only three years instead of four holds water. I do not know what my noble friend has in mind— or if he has anything in mind. However, he is writing away on his brief, and I hope that he is writing something helpful.
If something helpful can be done on this matter, that will be greatly welcomed. I do not believe that Scottish students see the problem as being straightforward. They recognise that they are receiving more public support on a four-year course than is the case on a three year course.
Lord Rea: My Lords, I support this amendment. It echoes some of the remarks made by the noble Lord, Lord Butterfield, on Second Reading, by other noble Lords during the Committee stage and by the
612
noble Lord, Lord Adrian, a few moments ago. It particularly applies to medical students but is not exclusive to them.
This relates to my experience while I was a co-opted Member of your Lordships' Select Committee on Science and Technology. In 1987 I was lucky enough to be invited to visit the United States to look at the medical research situation. There medical students are often in considerable debt by the time they qualify. Therefore, they are under very great pressure to join the most lucrative branches of the profession so as to service and repay the debt as quickly as possible. The result of that is that the less well paid branches of the profession suffer in recruitment, and those may well be the most useful in terms of the health and well-being of the community. I am talking particularly about doctors who consider going into medical research who, even if they eventually make a break-through and take out a patent and earn some money— and that will be the minority in medical research— they will spend at least 10 years in a fairly low paid job. The same applies to people who go into public health specialties or epidemiology. Those people never become rich although their work may have the greatest effect in reducing death rates and sickness in the community.
Another point which was drawn to our attention on that committee is the need for what is called the intercalated year to become standard in British medical education. That is where all students will get a B.Sc. degree before going on to the clinical part of their training in a hospital. It was thought that that would not only make a good source of recruits for medical science, but would also improve the standard of all medical practice in this country. I am aware that that would add another year to the training. If people have to borrow the money for that, that will be a disincentive to them. I am also aware that initially in this country debts will not reach the same astronomical height as those of students in the United States. However, there are branches of the profession in this country which people might well choose not to enter if it means a big debt hanging over their head. Any measure to decrease— that is a nasty way of putting it— this disincentive is very welcome, and therefore I support the amendment.
Lord Renton: My Lords, I assume that this is a probing amendment because, quite frankly, it adds nothing to the Bill. The Government already have power to decide on other conditions that they may prescribe by regulations. However sympathetic one may feel, one should bear in mind that whether or not the amendment is accepted, the Government have power to enact the provisions anyway. They also have power to ignore the provision in the amendment if they so choose.
Lord Mackie of Benshie: My Lords, I rise briefly to support my noble friend. The anxieties of the Scottish case are quite clear, but there is a general principle— touched on by many noble Lords— that the harder one works and the longer one trains, then the bigger disadvantage one starts with. There is no shadow of doubt that at the present time too many

613
people are entering the City of London— to do I know not what, but whether or not it is valuable is doubtful— and not enough people are entering the hard professions, be it medicine, engineering, physics or chemistry. This particular enactment of the idea that the longer one trains, the more one must borrow must be harmful to industry and to the country as a whole.
If, as was suggested, the Minister already has power to do something, I trust that he will tell us that he intends to do something about it.
Baroness Blackstone: My Lords, from these Benches I should like to support the amendment. There are a number of courses of undergraduate study which entail students studying for longer than three years. We heard a great deal about medicine, and at Committee stage I supported an amendment with particular reference to both dentistry and medicine.
I should like to add a small point on the subject of medical students. I do not want to be alarmist, but an interesting letter appeared in the current issue of the British Medical Journal, which suggests that medical students sometimes take part in drugs trials. There is concern that this will become an increasingly important source of tax-free income with very undesirable effects. Far too many students may take part in far too many drugs trials, which could be damaging to their health and their studies.
There are a number of other areas which have perhaps received rather less attention; for example, modern languages. Many students studying modern languages now take a four-year course; enhanced engineering courses also involve a four-year course of study. Where teacher education is undertaken as a Bachelor of Education it involves four years of study. Then there are paramedical areas such as speech therapy. My noble friend Baroness David wants to contribute to the debate on that subject. As a number of noble Lords said, virtually all honours degree courses in Scotland fall into these categories.
It is essential that by introducing the loans system these students are not deterred from studying longer courses. I shall give an example of why I believe they may be deterred. If we compare a student in Scotland and a student in England starting a course at the next academic year, and assuming an annual rate of inflation of 6 per cent. per annum, the loan differentials very quickly become quite large. Calculations suggest that the effect of extending a course by one year considerably increases the size of the debt, possibly by as much as 60 per cent. That could have a devastating effect on recruitment to longer courses. The consequences of having fewer language graduates in the years beyond 1992, or fewer teachers or paramedics, are quite incalculable.
I do not normally speak on Scottish matters. The noble Earl might like to know that I was supporting the losing side at Murrayfield the week before last and was very upset by the result. However, on this occasion I should like to say that the effect of the loan scheme on the Scottish university system could be carastrophic. The noble Baroness, Lady Carnegy of Lour, shakes her head. She made reference to the feelings of Scottish students on this matter. Perhaps
614
I may say that in response to the White Paper on top-up loans there was an extremely broad array of not only Scottish universities, but also Scottish colleges which said that they opposed the scheme because of the damage it could do to Scottish institutions of higher education. I do not believe there was a single Scottish university that did not criticise the scheme on those grounds. Many of the centrally funded colleges were also very critical.
We must also not forget that around 25 per cent. of Scottish university students are from outside Scotland. Something we should welcome is that students from the north or the south of England choose to study in Scotland. However, faced with the prospect of higher debt levels, an English student may not consider taking a Scottish degree. Even more undesirable is that students from Scotland may start drifting south in order to avoid paying back higher loans. If either or both of those effects were to take place, we should have the prospect of spare places, lower prestige, declining funding and possibly eventual closure of some Scottish higher education institutions. We are not only talking of universities, but also of centrally-funded colleges.
This amendment seeks to protect both the Scottish higher education system and preserve the number of applicants to longer courses. I very much hope that it will be accepted.
Earl Russell: My Lords, I should like to add one more name to the list of those who support these amendments, but I shall be brief. The amendments concern a considerable number of people. I noted the point made in Committee by the noble Baroness, Lady Young, regarding Oxford chemists. However, there is a general theme here. The Government have introduced a differential price tag for different courses. If the Government believe in their own principles, they must believe that by making some courses more expensive than others they are creating a market in which there is an incentive to choose some courses rather than others.
I take the point made by the noble Baroness, Lady Carnegy, that somebody has to pay anyway, and the longer course has the higher price. I shall listen to an argument which says that students should be made aware of that fact; but the Government should also consider the effect on other policies that may be in hand.
I have not yet heard anything to indicate that the Government have thought through the social consequences of this differential price tag. This Government have never been particularly strong on what the noble Lord, Lord Wilson of Rievaulx, used to call his "half-back line". There does not seem to be anyone who thinks through the effect of one policy on another.
Perhaps I can ask the Government to consider, as an interim measure, deferring the introduction of the extra loan charge for the fourth year until they have considered the sort of damage it will do either to Scotland, medicine, architecture or any of the other things which the Government want to encourage. Are the Government perhaps not letting their left hand know what their right hand is doing?
Baroness David: My Lords, I should like to say a word about speech therapists, who have hardly been mentioned. They are very necessary and are in very short supply; they are also low paid. The courses run to four years. The starting pay has just gone up to £ 9,487.
I received a letter from a senior speech therapist in Newcastle from which I should like to quote. It reads:
"There is big demand for places e.g. approx. 250 for 20 places at Newcastle University. Only those with the highest academic standards are accepted. Under the loan scheme we will not be able to recruit these students either at undergraduate level or after qualifying because they will be attracted to courses which guarantee a good income (e.g. medicine, dentistry, law, etc.).
The existing problems of retention will be greatly exacerbated. More experienced speech therapists will leave to enter better paid jobs … if there is the additional burden of loan repayment. (Current retention problems are due to low status, difficult conditions, excessive case loads making it almost impossible to apply skills and knowledge effectively).
In summary, the effect of the loan scheme would be to greatly exacerbate existing problems of retention and add problems of recruitment. Students of the calibre needed to do the job will not enter long courses for low paid jobs".
I feel strongly about speech therapists. They are a necessary part of training. We are already short of them. To accept this amendment to the Bill does not force the Government to do anything but I hope it at least shows that this House feels strongly about the difficulties of those going into low paid jobs such as teachers and nurses. There is a real problem and I hope that we shall hear a satisfactory reply from the Minister.
Lord Kearton: My Lords, I also add my voice in support of the amendment. I very much agree with the points made by the noble Lord, Lord Adrian, in regard to medical students and also the points made by the noble Lord, Lord Rea. With the noble Lord, Lord Rea, I was a member of your Lordships' Select Committee which visited America during its inquiry into medical research. In company with the noble Lord, Lord Flowers, I am currently on the committee dealing with the future of heart research in this country.
One point that has emerged clearly is that post-graduates, whom we want to encourage into research, are incredibly badly paid. In fact, unless something is done about their pay we run a serious risk of having no advanced medical research in this country at all in the next few years. To compound the difficulties by adding loan repayments over several years, as the noble Lord, Lord Adrian, said, would make it absolutely impossible in future to recruit people into advanced medical research. For that reason, I support the amendment.
5.45 p.m.
The Earl of Caithness: My Lords, first, I pay tribute to the noble Lord, Lord Addington, who has persisted in bringing this matter to the attention of the House. He has done the House a service by doing so. The noble Lord and the Government are at one in recognising that students on longer courses will have built up larger loan liabilities on completing their courses than will students on the shorter three-year courses. As I have said before, we intend
616
that annual repayments should be kept manageable for students on all courses. The House knows that we have been considering just how to do that.
I am pleased to tell the House that my right honourable friend the Secretary of State has announced today in answer to a Written Question— as has my noble friend Baroness Blatch— what we now propose. We now propose that students who borrow under the scheme for more than four years will be expected to repay their loans initially over seven years rather than the standard five years. I hope that will be welcomed by the whole House, not least the noble Lord, Lord Adrian, who referred to medical students. That will significantly reduce the size of the annual repayments that graduates will be expected to make if their income is above the 85 per cent. threshold.
The noble Lord, Lord Adrian, referred to the cost of the loan if inflation continues at its present level. I agree that the value of the loan will rise, but so too will the value of wages if inflation remains at its present level, so one will be balanced by the other.
The terms of this provision will be set out in regulations which your Lordships will have the opportunity to debate. I also assure the House that as the scheme develops and the maximum loan increases in real terms, the standard five-year repayment period will be increased so that repayments remain manageable. The extended repayment period for students on courses longer than four years will be similarly increased.
I can assure my noble friend Lady Carnegy of Lour that I never forget the Scots. With my noble friend Lord Sanderson of Bowden sitting beside me I am not allowed to. Nor, indeed would my right honourable friend the Secretary of State for Education and Science who benefited from the advantage of having a Scottish education. The issue of four-year courses in Scotland was specifically referred to by the noble Lord, Lord Addington, from his own experience. It was also referred to by the noble Lord, Lord Grimond, and my noble friend Lady Elliot of Harwood. We have considered, as I said we would, the whole matter of the Scottish four-year courses.
We have concluded, as I have told the House, that a top-up loan facility for each year of a course, irrespective of length or subject, is the right approach. The popularity of some longer courses— at present 25 per cent. of students come from outside Scotland— is evidence of their value in students' eyes. I do not believe there is any reason why that should change. An additional debt of about £ 400, rising eventually to about £ 1,500 in current prices, repayable over several years at nil real interest out of a graduate's salary, is hardly going to be a deterrent to an extra year's study. There is no doubt that the student's own perception of the nature and the content of the course, together with the value of the final qualification, will continue to be the most influential factors in the choice of institution and course.
Some noble Lords raised what is obviously a serious concern— whether this would deter the people who wish to go on longer courses. Students

617
undertaking longer courses already take account of the cost of the extra year of study in terms of the earnings that they forgo. The extra year's loans are much smaller by comparison. In addition, the extended repayment period will reduce the size of the annual repayments for those with courses longer than four years. My noble friend Lady Carnegy of Lour was absolutely right to remind the House that students on longer courses already receive more assistance by way of maintenance and tuition fees than their counterparts on three-year courses.
The noble Lord, Lord Rea, was concerned about the intercalated year for medical students. It is true that the intercalated year is not always supported by grants, but the loan will be available in every case and that can only be helpful to those undertaking such courses.
The noble Baroness, Lady David, refered to speech therapists. I too pay tribute to their work. The noble Baroness mentioned the starting salary for speech therapists, but I am sure she realises that that salary is well below the repayment criteria of 85 per cent. of the national average wage which we are introducing.
The noble Lord, Lord Kearton, referred to medical researchers. I hope he will be reassured by what I have said today which I believe has gone a long way towards meeting his concerns.
I conclude by saying that of course we will monitor the scheme. We are particularly anxious to make sure that students on four-year courses are not disadvantaged. If we feel that there is a need to alter the repayment period in addition to the major alterations announced today by my right honourable friend the Secretary of State, we can do so under the Bill as it stands, as my noble friend Lord Renton reminded the House.
Lord Addington: My Lords, I am glad to note that I have not been wasting my breath and that noble Lords have been listening to me. I can only welcome the extended repayment period, though the fact remains that the money still has to be repaid.
The noble Earl said that the access funds are to be increased. I take it that the £ 20 million to which he referred is to cover the same broad spectrum; that is, housing benefit and so on for the rest of the country. Does this come into the same concoction? Are the Scottish students on their four-year courses and students on other four-year courses which do not have an extended period, as opposed to the courses of over four years, all to be receiving help from the access funds? If so this extra funding will be stretched extremely thinly.
The Earl of Caithness: My Lords, as I said, the access funds for higher education will be doubled as a result of the announcement by my right honourable friend. They will cover Scottish students.
Lord Addington: My Lords, the funds, therefore, will cover other funding that has been previously mentioned such as housing benefit. The same funding will also be covering Scotland.
I am reaching the conclusion that the increased figure, though totally welcome, seems to be spread
618
extremely thin. I find myself in difficulty here. The noble Earl has gone as far as he can and I wonder whether it is far enough. Once again there will be some funding for everything but not quite enough. The Scottish four-year course was a very good example of the basic flaw because there are other four-year courses. The noble Earl has dealt to a very large degree with the problem of medical training and he has also considered the position of people such as architects. At least we can now guarantee that we shall have enough people being trained to construct buildings properly and, even if they do fall down, there will be doctors available to patch the people up again.
We have not dealt with the problem of students on a four-year course such as teachers. I do not know how thinly spread we shall find ourselves with the level of funding. I cannot remember the exact figures for the number of students in Scotland. Can the noble Earl tell us exactly how many people will be seeking assistance, at least initially, from this extra funding?
The Earl of Caithness: My Lords, with the leave of the House, I must say to the noble Lord that I cannot give him the answer because I do not have the figures. The answer as to who will benefit from the access funds is very tricky to work out. It depends on the students who are receiving housing benefit at the moment. Not all students are receiving it, as the noble Lord knows. The grants are being uprated for the forthcoming year. Those students who have been taking four-year courses in Scotland, which the noble Lord has assured us are still popular, will be aware that the value of the grant has declined ever since 1962. That is one of the problems that we are seeking to rectify as regards the loan.
I have been able to announce today two major concessions, both of which have been asked for by your Lordships. I fully understand the concern expressed by the noble Lord, Lord Addington, that every extra bit of money we are able to give is never enough to meet the ultimate concerns. That is an argument that can always be made. However, I am sure the House will recognise that the Government have responded very favourably to the concerns expressed by your Lordships both as regards the size of the access funds and for those students on longer courses.
As I said to the noble Lord, we shall continue to monitor students on four-year courses. We can make alterations if they are needed. I can assure the noble Lord that we considered most carefully the situation of Scottish students. On this occasion we thought it right that the students on longer courses merited the change, but we shall continue to monitor the whole scheme.
Lord Addington: My Lords, as always, the noble Earl has been most courteous and very precise. I appreciate that the Scottish students taking the standard four-year course will not be under anywhere near as much financial pressure as those on longer courses. I do not believe anyone would argue that. The answer given by the noble Earl is probably as good as it can be. I have been reassured by the fact

619
that he said the scheme will be kept under review. He has dealt with some of the arguments I have raised and he has gone as far as we are likely to proceed at present. In answering my question, the noble Earl has raised more questions for later on today. However, I am prepared to withdraw this amendment.
Amendment, by leave, withdrawn.
Earl Russell Earl Russell moved Amendment No. 7:
Page 1, line 15, at end insert:
(" (2A) Notwithstanding the provisions of subsection (2) above as to eligibility, the Secretary of State shall by regulations made under Schedule 2 below secure that no person who has one or more dependants during a period of not less than five years at any time after the date for the commencement of repayments and who does not in any one of those years receive a personal disposable income above the level of any threshold for repayment applicable by virtue of regulations under paragraph 1 (1) (i) of that Schedule, shall continue to be liable for interest outstanding at the end of that period and for interest that would otherwise accrue thereafter.").
The noble Earl said: My Lords, in moving this amendment I shall also speak to Amendment No. 8 with which it is grouped. These two amendments concern students with dependants. Inevitably some of them, but by no means all, come into the category of single parents who for a period of five years do not earn enough money to reach the repayment threshold.
The first amendment provides for the pardoning of interest; the second allows for the cancellation of debt. I believe it is generally agreed that single parents are liable to find themselves under a good deal of financial pressure. It might also be agreed that some effort to repay a loan could take place at the expense of the children, which would be to the discomfort of the parent and not necessarily in the interests of the public.
It is also relevant to these amendments that as yet there is not any child care disregard for social security benefits. If those concerned attempt to get full-time employment which would bring them within the repayment threshold, they would be facing both the loss of benefit and also the loan repayment. That might create a double disincentive effect to work. The noble Earl has taken me to task once for using the phrase "poverty trap" in this context. To a degree it was perhaps a figure of speech. Nevertheless, the point it was getting at was a perfectly valid one which I hope will receive some attention. I beg to move.
Lord Renton: My Lords, these two amendments present a dilemma. On the one hand, as the noble Earl has said, we want to legislate in a way which avoids family hardship. In that connection we have to bear in mind that there are various allowances under the social security system. On the other hand, each of the amendments will have the effect of providing an incentive to young people to marry in haste and to have a child as soon as possible or even to do so without marrying. On balance, the Government should not accept these amendments because they present real difficulties.
The Earl of Caithness: My Lords, these amendments were tabled at Committee stage. As I
620
recall it, Amendment No. 7 was not moved and, after discussion, Amendment No. 8 was withdrawn. I understand the concern that motivates them. They seek to provide more favourable loan terms for graduates with families. But I have two objections. First, the loan terms will be favourable for graduates in any case and I do not believe that they need to be made more favourable for graduates with families. Secondly, if experience shows that special terms are needed, they should be provided in the regulations and not in the Bill. Then we shall be able to look at what is the right and best thing to do.
I think noble Lords are by now aware that repayments will not be required from graduates whose income is below 85 per cent. of national average earnings at the time. If the scheme were in operation now, that would mean deferment on incomes below £ 11,500. The repayments will be of the order of £ 400 a year in current prices. I do not accept that repayments on that scale are unmanageable out of that kind of income, even if the graduate takes on family responsibilities.
Here I believe that my noble friend Lord Renton was absolutely right to remind us all of the enormous responsibilities people have when they marry and have a family. We would not wish to encourage people to rush into it for the sake of an amendment here. We want to support families and to encourage the family way of life. However, to encourage people to rush into marriage would be folly.
I accept that some of your Lordships see the future rather differently. If your Lordships are right— which I do not believe— the opportunity to make adjustments is there. We shall monitor the scheme's effect, as the House knows. If necessary, we can make amendments to the regulations, subject of course to parliamentary scrutiny, so as to adjust the terms of the loan for this and any other group. On this matter the noble Earl took my attention forward to Amendment No. 10 when he mentioned child care. Perhaps we can deal with that matter separately.
It would be quite wrong to fix now in the Bill special provision for one group before there is any basis for knowing that it is needed or whether the particular arrangements proposed would meet the hypothetical case.
Earl Russell: My Lords, before the noble Earl sits down and before I reply, can he clarify one matter? Does the expression "average earnings" mean £ 10,000 as shown in the Department of Education and Science leaflet or £ 11,500 as he has just said? Is the discrepancy between these figures caused by an uprating from one year to another or by something else?
The Earl of Caithness: My Lords, I should like to look carefully at what the noble Earl's figures have revealed. My latest information is that 85 per cent. of national average earnings amounts to £ 11,500. Those are the latest available figures. The figures were revised upwards as a result of the work we undertook in order to give your Lordships the most up-to-date figures available.
Earl Russell: My Lords, I thank the noble Earl for that helpful reply. We have here a clash of opinions which we have met a good many times since the beginning of our discussions on the Bill. The Minister is perfectly convinced that above 85 per cent. of average earnings the disincentive effect of repaying the loan does not operate. A good many nobis Lords think that there could be a considerable disincentive effect of having to repay the loan in the area between 85 per cent. and 100 per cent. It seems to be an area on which there is not a meeting of minds. I do not think it is worth pursuing the point on this amendment. For the time being, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 8 not moved.]
6 p.m.
Baroness David Baroness David moved Amendment No. 9:
Page 1, line 15, at end insert:
(" (2A) The Secretary of State shall by regulations made under subsection (2) (b) above secure that any scheme operable under arrangements made in accordance with this section and Schedule 2 below shall make such provision for the maintenance support of mature students as appears to him to be necessary to promote access by such persons to higher education.
(2B) In this section, "mature student" means a person otherwise eligible for a loan who is at or above the age of 25 years.").
The noble Baroness said: My Lords, in moving Amendment No. 9 I should like to speak also to Amendment No. 11. The first amendment requires the Secretary of State to monitor and regularly review maintenance support for mature students in the interests of safeguarding and encouraging access to higher education. The second amendment allows all mature students to be eligible for a loan regardless of age. At the moment the limit is 50. With numbers in the 18 age group declining mature students will be a large and important element in higher education. They already form 25 per cent. of students. It is essential both to attract and to keep them.
The needs of mature students were partly recognised in Committee in another place. It can be seen that, in principle at least, the Government recognise that mature students are a group requiring special attention. The main evidence of this is the maintenance of the mature student allowance— a special allowance for certain students over 26 at the beginning of their course. The Minister gave reassurances that this allowance will be continued and uprated as are other allowances. However, despite several pleas from Members on all sides of the House there seems to be no recognition of the existing problems of mature students and of the possible disincentive loans would have on them or of the exclusion of students over 50 from the loans scheme.
The Equal Opportunities Commission in an otherwise neutral response to the White Paper stated:
"Whilst we consider that the proposed scheme will treat women and men equally in respect of availability, access and repayment, we are nevertheless concerned that people over 50 will be excluded. Our experience of the financial needs of mature women returning to education after a period of domesticity or seeking a new direction leads us to doubt the White Paper's assumption
622
that people over 50 will be better able to rely on other resources during their studies. We would therefore welcome the removal of this age related eligibility criterion, so reflecting the new regime's ultimate aim of widening access to higher education".
At an earlier stage, the noble Earl, Lord Caithness, rejected the need for these amendments. He argued that those with families would not in general lose access to benefit and that for them the loan would be a net increase in resources. He said that in many cases mature students already incur substantial debts at commercial rates and that for them the opportunity to substitute borrowing under the very favourable terms of the scheme would be a major help. He said that for all the 25 per cent. increase in the new package compared with this year's grant would be welcome. However, the noble Earl failed to point out the fact that, as students with dependants have access to a loan (irrespective of whether they actually make use of it) it will be classified as income when assessing their entitlement to benefits from September-October 1990. Thus any benefit due will be reduced by the available loan facility for that academic year. It is therefore misleading for the Government to refer to this as a net increase in resources.
As a consequence of this there will be little opportunity for mature students to substitute borrowing at commercial rates with a government loan. Instead mature students, like younger students, will have two debts— one to the bank and one to the Government. The noble Lord, Lord Renton, and the noble Earl, Lord Caithness, both argued that it would be inappropriate for mature students over 50 to take on a repayment obligation when their remaining years of earnings will be limited. However, this is not necessarily true given that many people continue to work until they are 65 and even longer. As I pointed out, women too are staying in work longer and so will not have great problems in repaying the loan before they are 65. As evidence of this I showed that the retiring age for men has gone down but for women has risen: 51 per cent. aged 55 to 59 were economically active in 1971. That figure increased to 53 per cent. in 1988. Therefore there will not be real problems with repayment.
The Government seem to think— and the leaflet Top-Up Loans for Students published in February put this point— that most mature students will have savings which they can spend on their courses. As there are proportionately fewer mature students from social classes 1 or 2 than in the rest of the student population, this is highly unlikely.
Will the Minister give guarantees to the House that the mature student allowance will be continued and will be uprated? Will he also give a guarantee that the two homes allowance will be maintained and uprated annually? I hope very much that the Government can be more sympathetic to the cause of mature students than they were when I moved similar amendments in Committee. I beg to move.
Lord Renton: My Lords, I have reflected on this matter since the Committee stage and I am glad that the noble Baroness has raised it again through these amendments. I am reminded of the case of my own father who had a most unfortunate illness between the ages of 15 and 17. His entry to university was

623
delayed although he eventually did very well there. There were no loans of this kind in those days. I do not know how he managed. He was one out of six children who all managed to have a university education. Their parents did not have much money.
We need to think of those who are over 25. This is a serious matter for them. I am not quite sure what the age limit should be but there should be such a limit. I question the value of the contribution that can be made to society by those who obtain university degrees in middle age. I am very unwilling that the Government should be tied down to anything definite about students of any age being able to benefit from the scheme. Those who are a few years over 25 may need special consideration. But I think it is far better that the scheme should be kept flexible. A good deal of public money will be involved. We need a scheme which commends itself to the public who are providing that money, and which does justice.
Baroness Lockwood: My Lords, the first amendment is concerned with maintenance. My noble friend made a strong point when she said that maintenance available to mature students for dependants would be affected by the amount of the student loan. These two matters should be separated. I hope that the noble Earl can give an assurance that student loans will be discounted when assessments are made for maintenance.
The point in the second amendment is quite different. I have some reservations about the difficulties which may be involved in students taking out loans. I am thinking especially of women. In my view the majority of students over the age of 50 who embark upon a degree are likely to be women. As I said before in regard to another amendment, I accept that women will experience more difficulty than men in meeting the repayment of student loans. Nevertheless, I feel that if the Government are to introduce a system of student loans it should be available to all students and it should be up to the individual student to decide whether or not he or she can take on the responsibility of repayment. Therefore I hope that the exclusion of students above the age of 50 which has been put forward in the Bill can be amended and that the Minister will take note of my noble friend's amendment.
Baroness Blatch: My Lords, this is a most important issue. Almost every speaker has stressed the value of having mature students in the system and, more particularly, women mature students.
When these amendments were moved in Committee, I argued that mature students have everything to gain from the loans scheme. I pointed out that mature students with families will not in general lose access to benefits: for them the loan will be a net increase in resources.
The noble Baroness, Lady David, pointed out that mature students already in many cases incur debt, and asked how the prospect of more borrowing could be attractive to them. The fact is that mature students in many cases take on substantial debt on
624
commercial terms. The top-up loans will offer them the opportunity to substitute borrowing— not to increase borrowing— under the very favourable terms of this scheme: loan indexed to inflation, a generous repayment period and deferment for those on low income. The debt that mature students incur now is commonly at a commercial interest rate, repayable in a short term, and allows no deferment or cancellation.
Since 1979 the increase in participation in higher education by mature students has been very encouraging. Up to 1988— the last year for which figures are available— there was a 30 per cent. increase at universities and more than a 60 per cent. increase at polytechnics and colleges, in the number of mature students entering full-time education. This was during a period when the grant decreased in real terms.
With the loan added to the grant next year there will be a 25 per cent. increase in students' resources generally. This will restore student support to its level of 10 years ago. In addition, mature students will be eligible for the older students allowance, the level of which is presently under review. Increasing resources in this way will hardly act as a deterrent to enter higher education: on the contrary, I think that the converse will be true.
The second amendment would prevent an age limit being placed on students eligible for loans in the regulations. As noble Lords are aware, we are proposing that the loan should not be available to students aged 50 or more at the start of their course. As I have already said, this age limit is generous compared to other countries which operate loan schemes, where the age limit is commonly 30 years of age.
The age restriction would be imposed as a condition of eligibility by regulations made under Clause 1 (2) (b), which, as we now intend, will be debated by your Lordships under the affirmative resolution procedure. It is also important to note that students over the age of 50 years excluded from the loan will still have access to the grant.
Your Lordships will have heard how we intend to monitor the effect of the introduction of the scheme. Monitoring the scheme on this particular issue will be very important. If it becomes clear that some adjustment is needed to its terms for mature students, the Government will be able, as I pointed out previously, to seek to amend the regulations and, because of the way in which the system is set up, we can respond very quickly. I believe that that is the right approach. It would be quite wrong to fix now on the face of the Bill special arrangements for one group, which are based at this stage upon speculation.
The noble Baroness, Lady David, was concerned about the two homes allowance and about uprating. The former is one of a range of additional allowances. We have already made clear that these allowances will continue. Their value will continue to be considered year by year; indeed, we have just announced substantial uprating of the disabled students allowance for 1990–91. I think that it would be a brave government— or, indeed, a brave government in opposition— who guaranteed

625
upratings. However, I can promise that these will be considered for uprating annually in the normal way.
I assure the House that we shall keep the position of mature students very much in mind as we monitor the scheme. Moreover, if Parliament agrees, we shall be able to adjust the regulations on the basis of that assurance. I hope that with that assurance the noble Baroness will feel able to withdraw the amendment.
6.15 p.m.
Baroness David: My Lords, I should like to thank those noble Lords who supported my amendment. I am glad that the noble Lord, Lord Renton, decided to think again about his attitude towards mature students. I am also grateful for his concern for students over the age of 25 years. Of course, the Government's response is not as satisfactory as I would have hoped. However, I am glad for the reassurance about the uprating of the allowance and about the two homes allowance. I believe I understood the noble Baroness correctly on that point?
Baroness Blatch: My Lords, yes.
Baroness David: My Lords, I am most grateful to the noble Baroness.
The noble Lord, Lord Renton, asked for flexibility. That is what the amendment seeks to achieve. However, I am not so happy about the attitude towards mature students over the age of 50 years. There seems to be no give in that direction. In my view that group of people should be given special consideration. I should point out that many of us in this House over the age of 50— not all of us, but many of us— think that we are quite capable of doing a decent job. Therefore, I had hoped for more support in that respect.
We should also remember that the over 50s are those who missed out on the post-war improvements in educational opportunities. I think that it was one in 10 of that group who stayed on at school after the age of 1.6; these days the figure is one in two. In my view these people deserve rather special treatment.
As regards the value of a degree to the person qualifying over the age of 50 years, such people may be able to obtain a better job as a result and improve their take-home pay. I also think that there is a value in the degree itself. I am thinking especially of the satisfaction and the quality of life which it gives. I do not see why these people should be deprived of that opportunity. Admittedly such people could obtain a grant if they have not had one before, but as the giant is not as large as it used to be they would probably need the extra money provided by a loan. However, in the circumstances I shall withdraw Amendment No. 9 but I shall most likely divide the House on Amendment No. 11. Accordingly, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Russell Earl Russell moved Amendment No. 10:
Page 2, line 10, at end insert:
(" (3A) The Secretary of State shall in respect of any eligible student who is a parent at the date on which a loan will be payable
626
in any year make available adequate additional provision to such a person in respect of child care costs.").
The noble Earl said: My Lords, I should like to offer apologies to the House on behalf of my noble friend Lady Seear for her absence. She has been summoned to an emergency meeting which she was unable to avoid— something which happens to all of us from time to time. The purpose of the amendment is to enable the Secretary of State to provide additional funds to those with dependants for purposes of child care.
The first reason for the amendment is that child care costs a considerable amount of money. Such sums of money are not normally very easy to find within the limits of student finances. Let us take, for example, some of the figures which are available. The very excellent University of London Union Nursery has a minimum charge for students of £ 20 a week; Imperial College charges £ 52 a week; and, the London School of Economics, just about splitting the difference between the other two, imposes a minimum charge for students of £ 40.35 a week.
Your Lordships have heard a little about the kind of sums of money which are available to live on in London. However, those sums of money do not allow for such additional costs as are incurred for child care facilities. The possibility that the costs of child care may deter people from entering a university education is a real one. Therefore we must consider whether that is in the public interest and whether it is in the long-term interests of the Treasury.
I recall a most excellent debate in this House initiated by the noble Baroness, Lady Turner of Camden, on 21st June last year about the case for encouraging more married women to enter the labour force if they should wish to do so. It was pretty well the unanimous sense of the House that it is important in the interests of the national economy not to put obstacles in the way of married women who wish to work and to acquire qualifications for work better commensurate with their abilities.
However, this is not only a question of married women but also of single parents who are not all women. It needs repeating from time to time that 9 per cent. of single parents are men. They are entitled to the same consideration as all other single parents. There the question of benefit arises. I shall not repeat what I said about the absence of a child care disregard for benefits. However, it goes some way to refute the claim that all money made available in the form of a loan is new money. In these cases it is not.
It is not in the public interest to obstruct routes out from dependency on benefit if by way of a qualification it is possible to escape and to obtain a more highly paid job with better qualifications. In the end the Treasury will benefit as much as everbody else because the people concerned will pay taxes. They will pay National Insurance; they will pay VAT. The country should also benefit from the effects of their labour. The Minister might possibly consider whether accepting this amendment would not only be a humanitarian act but also a worthwhile investment. I beg to move.
Lord Renton: My Lords, before the noble Earl sits down I think he would wish to be accurate, as he always is. He stated at the start of his speech that the amendment would enable the Secretary of State to do what is suggested. However, the word "shall" is used so that he would be required to do it.
Earl Russell: My Lords, I beg the noble Lord's pardon.
Baroness Blatch: My Lords, we debated this amendment at Committee stage. It is one of those that would insert into the Bill special provision for a particular group— in this case students with children. We understand the concern of the noble Baroness, Lady Seear, that family responsibilities should be no bar to studying. That is why we make special provision for students with dependants in the existing student support arrangements. But we do not think it appropriate to write further special terms into this Bill.
I explained last week that the mandatory award is accompanied by a range of additional allowances payable to students with dependants. The House also knows that when the main rates of grant are frozen, the additional allowances will not automatically cease to be uprated. That uprating has been carried out year by year hitherto, and we expect to continue to consider annually the need to uprate the additional allowances in the future. As with all decisions involving public expenditure, that consideration will have to take account both of students' needs and of what the taxpayer can afford.
The uprating of the allowances has been carried out without there being any requirement in the 1962 Act to undertake it. There is no need for a statute to require the Government— and that is the point which my noble friend Lord Renton made on this amendment— to take particular account of one kind of cost that some students face. We review annually the public support provided for students in the light of all the circumstances.
The level of the allowances for students' dependants is an instance of what is becoming a familiar point. It is not appropriate to write into this Bill detailed provision for particular circumstances, any more than such provisions are written into the 1962 Act. It is the regulations under the 1962 Act which cover the special position of students with dependants. The regulations to be made under this Bill are similarly the right place to make any special arrangements in the loan scheme for this particular group.
The noble Earl, Lord Russell, expressed a concern about additional allowances and child care in particular. I have said that in addition to the dependants' allowance, eligible students will continue to receive the mature students' allowance, worth up to £ 840 in 1989–90, for students aged 26 or over. The level of the 1990–91 alowances will be announced shortly. On top of the allowances, both single parents and students' dependants will retain their entitlement to social security benefits. For single parents, the entire top-up loan will be an additional resource. Student parents will also be candidates for assistance from the access funds.
628
At the risk of repeating myself, I should emphasise that child care provision is not just a matter of giving resources to the individual. The need to provide child care facilities such as creches for working mothers and single parents is now high on the agenda and it will impinge on the higher education institutions. Students will demand such facilities and will vote with their feet if they are not available. I am sure that institutions anxious to recruit mature women students in particular will recognise this as a priority. But this is a matter for the institutions and is again outside the scope of the Bill.
We intend to retain for the foreseeable future a system of supplementary allowances for defined purposes in addition to the basic rates of mandatory student grants. The way in which particular allowances are handled after 1990–91, when the basic grant rates will be frozen at that year's levels as loans are introduced, will be considered in the light of all the circumstances, including the availability of resources prevailing at the time.
Although the rates of dependants' allowance are determined in part on an assessment of need, individual circumstances vary widely and it would be impossible to ensure that in each case the allowance exactly reflects the cost of looking after a child. In practice, students may use money from any or all of the sources available to them to meet child care costs. The combination of resources available is generous and should not be a barrier to participation. Under our proposals the access funds will also be available to assist those in difficulties.
I hope that in the light of what I have said the noble Earl, on behalf of the noble Baroness, will feel able to withdraw the amendment.
Earl Russell: My Lords, I wish to thank the noble Baroness for that long and careful reply. It makes a number of points of substance for which I am grateful. I do not feel that it goes all the way to meet the situation. I take, for example, the point about social security benefits continuing to be available to single parents. Without the child care disregard this concession is not of as much value as perhaps otherwise it might have been.
I also take the point about the need for universities to do something of this themselves, and they are very well aware of the need. However, I am continually amazed that the Government seem to be entirely unaware quite how hard up universities are. This is the kind of activity for which one requires additional premises. University space is under tight pressure and acquiring additional premises is quite expensive. If universities are expected to undertake these projects themselves, as in a better world would have happened already, it would mean a level of basic provision very different from that with which we live at the moment. While we live with that level of basic provision, we shall continue to come back and ask the Government for things which under other circumstances we might have been happy to do ourselves.
Nevertheless, many of the issues here will be better addressed under the general heading of child care when we come to the Social Security Bill after the

629
Recess. Under those circumstances, for the time being, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness David Baroness David moved Amendment No. 11:
Page 2, line 10, at end insert:
(" (3A) NO scheme made under arrangements in accordance with this section or regulations made under Schedule 2 below shall exclude any person from eligibility for a loan on grounds of age.").
The noble Baroness said: My Lords, we have already discussed this amendment. I beg to move it and I wish to test the opinion of the House.
6.30 p.m.
On Question, Whether the said amendment (No. 11) shall be agreed to?
Their Lordships divided: Contents, 69; Not-Contents, 91.

DIVISION NO. 2

CONTENTS

Addington, L.

Macaulay of Bragar, L.

Adrian, L.

McCarthy, L.

Ardwick, L.

McIntosh of Haringey, L.

Aylestone, L.

Mais, L.

Birk, B.

Mason of Barnsley, L.

Blackstone, B.

Milner of Leeds, L.

Blease, L.

Monkswell, L.

Carmichael of Kelvingrove, L.

Morton of Shuna, L.

Northfield,. L.

Cledwyn of Penrhos, L.

Ogmore, L.

Crook, L.

Peston, L.

Darcy (de Knayth), B.

Pitt of Hampstead, L.

David, B.

Ponsonby of Shulbrede, L.

Davies of Penrhys, L.

[Teller.]

Dean of Beswick, L.

Rochester, L.

Dormand of Easington, L.

Russell, E. [Teller.]

Flowers, L.

Seear, B.

Gallacher, L.

Seebohm, L.

Galpern. L.

Serota, B.

Gladwyn, L.

Shackleton, L.

Graham of Edmonton, L.

Sherfield, L.

Grey, E.

Simon of Glaisdale, L.

Grimond, L.

Stedman, B.

Hacking. L.

Stoddart of Swindon, L.

Hampton, L.

Strabolgi, L.

Howie of Troon, L.

Taylor of Blackburn, L.

Hylton-Foster, B.

Thurlow, L.

Jay, L.

Tonypandy, V.

John-Mackie, L.

Tordoff, L.

Kagan, L,

Turner of Camden, B.

Kilbracken, L.

Underhill, L.

Kilmarnock, L.

Wedderburn of Charlton, L.

Kirkwood, L.

White, B.

Llewelyn-Davies of Hastoe, B.

Wilberforce, L.

Williams of Elvel, L.

Lockwood, B.

Winterbottom, L.

NOT-CONTENTS

Alexander of Tunis, E.

Constantine of Stanmore, L

Allerton, L.

Cox, B.

Balfour, E.

Craigavon, V.

Bellwin, L.

Cullen of Ashbourne, L.

Belstead, L.

Davidson, V. [Teller.]

Blatch, B.

Denham, L.

Borthwick, L.

Eccles, V.

Brougham and Vaux, L.

Eden of Winton, L.

Butterworth, L.

Elles, B.

Caithness, E.

Elliot of Harwood, B.

Carnegy of Lour, B.

Erroll, E.

Carnock, L.

Ferrers, E.

Clanwilliam, E.

Fraser of Carmyllie, L.

Coleraine. L.

Gibson-Watt, L.

630

Glenarthur, L.

Mowbray and Stourton, L.

Goold, L.

Munster, E.

Gray of Contin, L.

Napier and Ettrick, L.

Gridley, L.

Nelson, E.

Haddington, E.

Newall, L.

Harmar-Nicholls, L.

Norrie, L.

Henley, L.

Nugent of Guildford, L.

Hesketh, L.

Orkney, E.

Hives, L.

Orr-Ewing, L.

Holderness, L.

Peyton of Yeovil, L.

Hooper, B.

Rankeillour, L.

Johnston of Rockport, L.

Reay, L.

Kaberry of Adel, L.

Redesdale, L.

Kenilworth, L.

Rees, L.

Killearn, L.

Renton, L.

Kimball, L.

Renwick, L.

Lauderdale, E.

Rodney, L.

Layton, L.

Sanderson of Bowden, L.

Lindsey and Abingdon, E.

Selkirk, E.

Long, V. [Teller.]

Skelmersdale, L.

Lucas of Chilworth, L.

Strathmore and Kinghorne, E.

Lyell, L.

McColl of Dulwich, L.

Swinfen, L.

Mackay of Clashfern, L.

Thomas of Gwydir, L.

Margadale, L.

Trefgarne, L.

Marshall of Leeds, L.

Trumpington, B.

Massereene and Ferrard, V.

Ullswater, V.

Merrivale, L.

Vaux of Harrowden, L.

Monson, L.

Whitelaw, V.

Mottistone, L.

Wise, L.

Mountevans, L.

Wynford, L.

Mountgarret, V.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
6.36 p.m.
[Amendment No. 12 not moved.]
Baroness David Baroness David moved Amendment No. 13:
Page 2, line 11, at end insert ("but before doing so shall consult any persons with whom consultation appears to him to be desirable").
The noble Baroness said: My Lords, in Committee I moved an amendment which would have made Clause 1 (4) read, "The Secretary of State may, after consultation with such persons as appear to him to be concerned, by order amend Schedule 1 to the Act". The Minister said that he accepted the spirit of the amendment and that he would rewrite it and table a similar amendment on Report. He has done that. I daresay the language is slightly tidier than my original amendment. I am grateful for that. The Minister suggested that I should table the amendment and I am pleased to do so. I beg to move.
On Question, amendment agreed to.
Baroness David Baroness David moved Amendment No. 14:
Page 2, line 11, at end insert ("and shall within one year of the passing of this Act give consideration to the inclusion by Order within that Schedule of similar courses undertaken on a part-time basis").
The noble Baroness said: My Lords, this amendment seeks to extend the availability of loans to part-time students. Extending the loans scheme to part-time students is clearly possible within the terms of the Bill. In reply to the debate in the Standing Committee, the Minister, Mr. Jackson, said:
"The Bill will allow loans to be provided to part-time students later, if the Government so decide using the regulation-making power".
On Second Reading in this Chamber there was a great deal of support for part-time students. The noble Baronesses, Lady Young, Lady Cox and Lady Carnegy, as well as myself, the noble Baroness, Lady Blackstone, and I believe the noble Viscount, Lord Eccles, all supported the principle of treating part-time students better than at present. Part-time students are not mentioned in the Bill at all.
It is clear that there is the ability and the desire to include part-time students in the loans scheme within the existing Bill. However, that needs to be specified on the face of the Bill due to the ambiguity over whether part-time students will ever become eligible for loans, and, if so, when this may occur. During the debate on 12th March on including part-time students within the provisions of the Bill, a number of noble Lords, again from both sides of the House, expressed concern about the issue. The noble Lord, Lord Dainton, stated (at col. 1358 of Hansard):
"On the whole, however, this country has neglected its part-time students and is paying a heavy price for it. This is now an opportunity to redress that situation and for the Government to get an extremely good bargain if they will consider applying this Bill pro rata as suggested in these two amendments to the part-time and mature students".
The contribution of the noble Lord, Lord Carr of Hadley, included the following (at col. 1363 of Hansard]:
"I feel that it would be a great disaster if we put it to bed without the power in it to enable the Government to help part-time students even if they could not do so immediately".
This amendment does not ask the Government to do that immediately. It says:
"and shall within one year of the passing of this Act give consideration to the inclusion by Order within that Schedule of similar courses undertaken on a part-time basis."
I think that I have said enough. There has been great enthusiasm for part-time students being included on the face of the Bill. This does not ask the Government to do anything immediately. I hope that the Minister will agree. I beg to move.
Viscount Eccles: My Lords, I am in favour of part-time students, as I said at Committee stage. I should like the Minister to tell me one thing. Are the Government against them because they cost money, or because they do not think much of part-time courses?
Baroness Young: My Lords, I raised the question of part-time students at Second Reading because I thought that was important. I am sure that everyone who has taken part in this debate recognises the importance of part-time students, and I do not intend to rehearse all the arguments this evening because they have been gone over so clearly.
In Committee, I did not speak to the amendment moved by the noble Baroness, Lady David, because it was couched in rather different terms from this. When my noble friend comes to reply, I think he will tell us what the cost would be of including part-time students. I think I am right in saying that this would be between some £ 70 million and £ 80 million. Speaking as someone who has been a former Leader of your Lordships' House, one has to consider
632
carefully the constitutional point about your Lordships' House committing the Government to an enormous increase in expenditure. This was the point made slightly differently over the graduate tax.
I take the point made by the noble Baroness, Lady David, that this is a different amendment. It is a permissive power. When we discussed this matter at Committee, my recollection of it was that my noble friend said that by no means were the Government unsympathetic to part-time students, but that they hoped that at a later stage they could be included. Of course it almost certainly means a commitment of money, and I suspect that this is what is preventing something being written into the Bill now. It would be helpful to the House to have this point clarified.
I quite take the point about putting something in which would add considerably to the cost. What I am not sure about is how much further the noble Baroness's amendment would go from what my noble friend said at Committee stage. It would be helpful if he could clarify this point.
Baroness Elles: My Lords, I wonder whether my noble friend can also clarify how far part-time students can fit into this particular Bill. It is obvious that everybody in your Lordships' Chamber will be in favour of supporting those who follow part-time courses. It is clearly for their own personal benefit, for the good of the country, and indeed in general it is good. Anybody who wants to pursue a part-time course should of course be encouraged, whatever age and whatever stage of career they are in.
However, I wonder about the structure of this Bill. It seems to me first that it has to be based on grants from local authorities, and I was not aware that part-time students received grants. Perhaps this point can be clarified. Secondly, since the top-up loan is for maintenance, and maintenance only, how far are part-time students eligible for maintenance in this form at all? Do they now get any maintenance from colleges where they follow part-time courses?
I am in ignorance of the kind of financial resources available to part-time students. It will be helpful if my noble friend can clarify this particular point, and whether this is the right Bill for this kind of amendment to be included.
6.45 p.m.
Baroness Blackstone: My Lords, I had not intended to intervene. However, there are a couple of points that I should like to make in the light of comments made by the noble Baroness, Lady Young. Perhaps I can help clarify the question raised by the noble Baroness, Lady Elles. I agree with what the noble Baroness, Lady Young, said: that this does not commit the Government to anything. On the contrary, it is designed to help those Members of the Government who believe that it would be desirable to consider bringing in part-time students at some later date, and to do it relatively soon.
There is quite a lot of support on the Government Benches for including part-time students, and indeed in the Government itself; but because there is additional expenditure required, it may well be that Treasury Ministers may be less enthusiastic than some other Members of the Government. This is

633
really designed to be helpful to spending Ministers in the Department of Education.
The £ 70 million sum, which sounds about right to me, could not be better spent than on part-time students. Part-time students are a growing proportion of students in higher education. They are the most highly motivated and highly committed of all students because they combine their studies with a job, give up a great deal to do so, and make many sacrifices. Many of them find it extremely hard to cover the costs of their higher education, and we should find some way of helping them and supporting them. We have not done so in the past, and more is the pity.
To come back to what the noble Baroness, Lady Elles, said, she is quite right that at the moment students who study part-time are not eligible for maintenance grants, yet at the same time they have additional costs which are incurred as a result of taking a decision to study, whether it be travel costs, child care costs, the cost of field courses, the cost of purchasing books, and possibly some income forgone because they do not take on extra work or overtime, over and above their basic wages or salaries.
Therefore, it seems to me that the fact that they are not currently part of the maintenance grant system ought to be no reason for excluding them from the provisions of this Bill. I hope that the noble Earl is; able to respond positively to this amendment.
Lord Dormand of Easington: My Lords, when the Minister replies, would he make it clear that a sandwich course, whatever form it might take, is not a part-time course?
The Earl of Caithness: My Lords, the noble Baroness, Lady David, in support of her argument quoted from my noble friend Lord Carr of Hadley with words to the effect that it would be sad to put this Bill to bed without there being the power to be able to extend the Bill to part-time students. Let me make it clear to the House that the Bill, as it stands, provides for students in higher education generally to have access to loans. There is no need to amend it to bring part-time students into the scope of the loan scheme. The argument that the noble Baroness used in support of her amendment is already catered for because in the Bill as it stands part-time students can be taken into account.
I would say to my noble friend Lady Elles that all students who obtain a mandatory award and therefore a grant will be eligible for a loan, but the loan will go further than that as well, so there will be people who do not get grants who will be able to benefit from the loan. However, we made it clear in the White Paper that part-time students will be excluded at this stage.
The Bill empowers the Secretary of State to set eligibility conditions. One condition that my right honourable friend intends to make when the scheme is introduced is that the loan will be available only to full-time students. The exclusion of part-time students is to be effected by regulation. In later years if part-time students were to be included it would be a matter of amending the regulations. There would be no need to amend Schedule 1.
634
The intention of the amendment is clear, and that is to ask the Secretary of State next year to consider bringing part-time students into the scope of loans. Let me assure the noble Baroness, Lady David, that the Secretary of State will be looking at this issue most carefully. My noble friend Lord Eccles wanted clarification on that point. Let me give it unhesitatingly. We recognise the extremely valuable role that part-time education plays in higher education in the United Kingdom. Our priority is to introduce loans for full-time students, but, as I said, there is nothing in the Bill to exclude part-time students. If we were to decide to extend the loans scheme to part-time students, new regulations would have to be made subject to parliamentary approval, but there would be no need for primary legislation.
The noble Baroness, Lady Blackstone, reminded the House of the rapid growth in the numbers of part-time students, even though they do not have access to mandatory awards. That point confirms that extending loans to them should not be our first priority at the moment when we are in the process of establishing the loans scheme. I fully understand and sympathise with the arguments for thinking about them at a later stage, but, when one is establishing a new scheme such as this, one must have one's priorities right, and out first priority is to full-time students.
Let me reassure the House that we shall consider the position of part-time students most carefully once the loans scheme is established. My noble friend Lady Young was right to remind the House of the cost which will be between £ 70 million and £ 80 million on current estimates. Perhaps I may also answer the point raised by the noble Lord, Lord Dormand of Easington. He was quite correct; a sandwich course is not considered to be a part-time course.
Baroness David: My Lords, the questions asked by the noble Baroness, Lady Elles, have been answered by my noble friend Lady Blackstone and by the Minister to the effect that it is all right to have part-time students in the Bill. There is no commitment to expenditure in my amendment. It simply asks that part-time students be mentioned in the Bill and that consideration be given to them in a year's time. The Minister said that there is nothing to stop consideration being given, but we should like it to be a positive demand that part-time students should be considered in a year's time. A figure of between £ 70 million and £ 80 million was mentioned as the amount that would be needed if a loan of £ 300 was given, but it does not seem to be such a colossal sum when one considers some government expenditure. In view of the support for part-time students, I believe that I should test the opinion of the House.
6.52 p.m.
On Question, Whether the said amendment (No. 14) shall be agreed to:
Their Lordships divided: Contents, 57; Not-Contents, 90.

DIVISION NO. 3

CONTENTS

Addington, L. [Teller.]

Llewelyn-Davies of Hastoe, B.

Adrian, L.

Ardwick, L.

Lockwood, B.

Barnett, L.

Macaulay of Bragar, L.

Beloff, L.

McIntosh of Haringey, L.

Blackstone, B.

Mais, L.

Carmichael of Kelvingrove, L.

Mason of Barnsley, L.

Mishcon, L.

Cledwyn of Penrhos, L.

Monkswell, L.

Dacre of Glanton, L.

Monson, L.

Darcy (de Knayth), B.

Northfield,. L.

David, B.

Ogmore, L.

Davies of Penrhys, L.

Peston, L.

Dormand of Easington, L.

Pitt of Hampstead, L.

Flowers, L.

Rochester, L.

Foot, L.

Russell, E.

Gallacher, L.

Seear, B.

Graham of Edmonton, L. [Teller.]

Serota, B.

Shackleton, L.

Grey, E.

Simon of Glaisdale, L.

Grimond, L.

Stedman, B.

Hampton, L.

Stoddart of Swindon, L.

Henderson of Brompton, L.

Taylor of Blackburn, L.

Howie of Troon, L.

Turner of Camden, B.

Jay, L.

Underhill, L.

John-Mackie, L.

Walston, L.

Kagan, L.

Wedderburn of Charlton, L.

Kilbracken, L.

White, B.

Kilmarnock, L.

Williams of Elvel, L.

Kirkwood, L.

Young of Dartington, L.

NOT-CONTENTS

Alexander of Tunis, E.

Long, V.

Ashbourne, L.

Lucas of Chilworth, L.

Astor of Hever, L.

Lyell, L.

Balfour, E.

McColl of Dulwich, L.

Bellwin, L.

Mackay of Clashfern, L.

Belstead, L.

Margadale, L.

Blatch, B.

Marshall of Leeds, L.

Borthwick, L.

Massereene and Ferrard, V.

Brougham and Vaux, L.

Merrivale, L.

Butterworth, L.

Mersey, V.

Caithness, E.

Mottistone, L.

Carnegy of Lour, B.

Mountevans, L.

Carnock, L.

Mountgarret, V.

Clanwilliam, E.

Mowbray and Stourton, L.

Constantine of Stanmore, L.

Munster, E.

Cox, B.

Napier and Ettrick, L.

Craigavon, V.

Nelson, E.

Cullen of Ashbourne, L.

Newall, L.

Davidson, V. [Teller.]

Nugent of Guildford, L.

Denham, L. [Teller.]

Orkney, E.

Eccles, V.

Rankeillour, L.

Elles, B.

Reay, L.

Elliot of Harwood, B.

Redesdale, L.

Elton, L.

Renton, L.

Erroll, E.

Renwick, L.

Fraser of Carmyllie, L.

Rodney, L.

Gibson-Watt, L.

Sanderson of Bowden, L.

Glenarthur, L.

Selkirk, E.

Goold, L.

Skelmersdale, L.

Gridley, L.

Strange, B.

Hacking, L.

Strathmore and Kinghorne, E.

Haddington, E.

Harmar-Nicholls, L.

Swinfen, L.

Henley, L.

Swinton, E.

Hesketh, L.

Thomas of Gwydir, L.

Hives, L.

Thurlow, L.

Holderness, L.

Trefgarne, L.

Hooper, B.

Trumpington, B.

Hylton-Foster, B.

Ullswater, V.

Johnston of Rockport, L.

Vaux of Harrowden, L.

Joseph, L.

Whitelaw, V.

Kaberry of Adel, L.

Wise, L.

Kenilworth, L.

Wyatt of Weeford, L.

Kimball, L.

Wynford, L.

Lindsey and Abingdon, E.

Young, B.

Liverpool, E.

Resolved in the negative, and amendment disagreed to accordingly.
6.59 p.m.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 15 and 16:
Page 2, line 16, after ("instrument") insert ("which, subject to subsection (7) below, shall be")
Page 2, line 18, at end insert—
(" (7) A draft of the first regulations to be made under this section or Schedule 2 to this Act shall be laid before each House of Parliament and those regulations shall not be made unless the draft has been approved by a resolution of each House.").
The noble Earl said: My Lords, with the leave of the House I should like to move Amendments Nos. 15 and 16 together. Both of them have been discussed already. I beg to move.
On Question, amendments agreed to.
[Amendment No. 17 not moved.]
Baroness Blatch: My Lords, I think that this might be an appropriate moment to break for dinner. I beg to move that further consideration on Report be now adjourned. I suggest that we do not reconvene before 8 o'clock.
Moved accordingly, and, on Question, Motion agreed to.

British Railways (No. 3) Bill [H.L.]
7 p.m.
Lord Marshall of Leeds: My Lords, I beg to move that this Bill be now read a second time.
The opening of the Channel Tunnel coinciding with the completion of the single European market and the progressive dismantling of economic frontiers will inevitably trigger a surge in demand for travel. To meet that challenge British Rail has embarked on an investment programme of over £ 1 billion to ensure that the rail system, which is an energy efficient, economical and technically advanced transport mode, assumes a leading role in reshaping the transport scene and relieving the worsening congestion problem in air and road travel.
The Channel Tunnel Act of 1987 established Waterloo as the site of the first international rail terminal in London and in the period before the opening of the Channel Tunnel a programme of major maintenance and renewal is planned on the railway lines from the Channel Tunnel. This is intended to ensure that British Rail can carry the predicted volumes of traffic during the opening years of the operation of the tunnel without curtailing existing domestic services. That is a commitment which was given during the passage of the Channel Tunnel Bill. The Bill now before your Lordships seeks to continue that work, providing for a new station at Ashford, three new freight loops, a railway chord linking lines north of London and an improvement to Bickley rail junction.
Works Nos. 1A and 1B referred to in Clause 5 of the Bill will provide railway access to a new international passenger station at Ashford for which

637
planning permission will be sought. That station will be sited to allow trains using existing running lines to serve it even before the proposed new high speed rail link between King's Cross and the Channel Tunnel is constructed. It has also been designed with a view to being compatible with plans for that link in the future. It will provide passengers travelling to and from Kent with direct access to international services to Paris and Brussels throughout the day and possibly to destinations further afield at night, reducing journey times and unnecessary travel via London. Facilities will be provided for easy interchange between international and Network SouthEast services subject to necessary security controls.
In the future the new high speed rail link will enable Ashford to become a focus for Kent Express services— a commuter service for East Kent, with journey times reduced by almost half between London, Ashford and destinations beyond, such as Canterbury, Folkestone and Ramsgate. Ashford international station is planned to be part of a major development and, with its close proximity and easy access to mainland Europe, the station will act as a considerable magnet for major investment in one of Kent's key development areas.
Powers are also sought by this Bill for the construction of three freight loops in the county of Kent— at Headcorn, Borough Green and Otford. Other freight loops which are required have been already authorised by powers of the Channel Tunnel Act 1987 and the British Railways Act 1989 or are authorised by virtue of the board's general powers under previous legislation.
Noble Lords will perhaps forgive me if I explain that a freight loop is a short line, a little under a mile in the; se cases, connected at both ends to the main running line. They are necessary to ensure that relatively slow freight trains do not delay faster Network SouthEast services and the new international passenger trains. They allow the freight train to be diverted away from the main running track to permit a faster passenger service to overtake it.
At Otford and Borough Green the freight loops are in rural areas sheltered from local housing and the loop at Headcorn will run alongside the existing station. All, however, have been strategically placed in locations where passenger and freight services might otherwise conflict.
I am aware that there is some concern over the level of environmental impact caused by increased freight services to the Channel Tunnel and I think it is appropriate at Second Reading to address some of the issues raised. With European trade growing rapidly and the impact of the 1992 single market initiative just around the corner, freight traffic through Kent and the South-East will continue to expand. Each and every year's increase in trade is equivalent to at least an additional 100,000 lorry movements on the roads, creating extra congestion and the need for more highway investment. The introduction of the Channel Tunnel rail freight services in 1993 will provide an attractive alternative to trunk road haulage, and bring reductions in congestion and the consequent environmental
638
pollution. In the first years of operation, the rail freight services will offer the equivalent of up to 400,000 trunk lorry movements a year over the roads to Kent and the South-East.
British Rail plans to initiate Channel Tunnel services with up to 27 freight trains a day each way and then to build up the level in line with traffic growth. North of Ashford, freight will be divided equally between two routes: half via Tonbridge and Redhill and the remainder via Maidstone and Bromley. Fewer freight trains are expected to run at weekends and during peak commuting periods. In addition, the new locomotives planned for use on Channel Tunnel services will be electrically powered and therefore much quieter than the present trains which use diesel engines. These measures, together with new wagon disc brake design and £ 10 million investment in replacing existing jointed track with much smoother, longer, welded rails will make a major contribution to noise reduction for residents living alongside or near the line.
Nevertheless, there will be those who may press for compensation for residents in respect of noise arising from the increased use of existing railway lines. Current legislation makes no provision for that. I remind your Lordships that this principle was considered by the Select Committee in this House and in another place during the passage of the Channel Tunnel Bill. The committees were asked by a number of petitioners to amend the Bill to require compensation for the effects of noise arising from the intensified use of existing lines, but neither committee accepted the arguments for any departure from the existing law of compensation. The imposition of expensive additional compensation responsibilities and the provision of noise mitigation measures would seriously restrict the operation of the rail freight business in a highly competitive market with road hauliers, who face no such obligations, and would undoubtedly lead to further road congestion and pollution.
Another work authorised by the Bill is for a link line known as the West Hampstead chord. The King's Cross Railways Bill, which is now before a Select Committee in another place, provides for the construction of major works at King's Cross, including a new low level station designed to serve as London's second international terminal. The link line proposed in the present Bill will provide the connection between the Midland main line and the North London line from which trains can then access the West Coast main line. Thus on completion of the new low level station, this short link, 645 metres long, will allow through services from the Continent to the West Midlands and the North West to be routed via King's Cross with its unrivalled interchange facilities.
The fourth matter to which I wish to draw your Lordships' attention involves another link between existing railway lines in the London Borough of Bromley. The link provides an additional route between Petts Wood Junction and Bickley Junction, where several routes currently converge and where trains crossing the junction may delay trains on other lines. This new link will ensure that the increase in international passenger traffic following the opening

639
of the Channel Tunnel need not adversely affect existing commuter services. It is a track alteration that is more easily revealed by diagram than explained in words. But I assure your Lordships that this link will be of great benefit to domestic and international passengers alike.
No powers for the compulsory purchase of residential properties are sought by the Bill. Most of the works take place on land already owned by British Railways Board. Nevertheless the works provided for by the Bill are important elements in the programme for improvement of rail services to which I have already referred.
Your Lordships will see that the Bill contains various measures but all have a single purpose: to maximise the benefits of the single European market and the opening of the Channel Tunnel, not only for passenger and freight travel but for both Kent and the remainder of Britain. I commend the Bill to the House.
Moved, That the Bill be now read a second time.— (Lord Marshall of Leeds.)
7.11 p.m.
Viscount Massereene and Ferrard: My Lords, I was very interested to hear what my noble friend Lord Marshall of Leeds said about the railways with regard to the Channel Tunnel. However, I shall not follow that theme because I chiefly wish to speak for my friends in the county of Kent. I have a place in Kent. Many people are very worried about the noise aspect. I speak on that matter for only a short time.
The funny aspect about noise is that, although we all have ears, when we hear a noise some may like it and others will detest it. Some people may like certain pop music and others will detest it. I find it rather aggravating. As a young boy I was extremely fond of trains. I remember as a child the old Calendonia Railway in the Western Highlands. The trains had the most beautiful hooter which used to moan through the hills. It fascinated me but annoyed others. One often finds that with noise. I do not think anybody likes the noise of a pneumatic drill. That factor applies also to express trains. They make a considerable noise.
Kent County Council has calmed people's fears about noise to a great extent. It has undertaken great work to explain to people how it will demand that British Rail keeps down the noise level. It has undertaken research on the subject. At night time one does not wish to wake people. People are asleep and therefore one must try to keep the noise level down as low as possible so that it does not wake residents. The subject of noise is an extremely involved issue. I have probably spoken enough on the matter.
When the Channel Tunnel is in action— we hope that that will be in about three years' time— the lines on which the trains will travel through Kent will be so designed that noise will not cause great annoyance. It is unfair that the existing lines do not afford the protection that the new lines for the tunnel will have. That matter will have to be amended. The existing
640
lines which will be carrying the same trains will have to afford the same protection against noise levels as will the new lines.
I am concerned that British Rail is not being very imaginative. The tunnel does not appear to be keen on attracting freight traffic. But it could be of tremendous service to traffic generally by taking many of the heavy lorries off the roads, and British Rail should do all that it can to capture that freight when the time comes. It does not seem to be doing so at the moment.
The other issue is whether the station should be at Ashford, as my noble friend mentioned, or at Swanley which is the other station that has been mentioned. I do not believe that Swanley would be as satisfactory as Ashford because it is not easily accessible from the M25 and also has other drawbacks. I have always understood that under the 1987 Act Ashford would be the main station on the route to London. I hope that that will be adhered to.
I do not wish to say any more because it has all been said by my noble friend Lord Marshall of Leeds. I have always been pro-tunnel, although I should have preferred a bridge. The people of Kent have been anti-tunnel, but I hope that they will soon grow out of that. I must not take up any more time because there are three more speakers. I shall just say that I hope that all goes well with the road works in Kent and the new lines.
7.22 p.m.
Lord Crook: My Lords, I must first admit to 20 years' involvement with the Channel Tunnel. For a good deal of that period I have been engaged professionally with the project and from time to time I am still involved in its construction. Therefore I welcome the Bill as a means of improving the communications between the tunnel and the rest of the United Kingdom.
We are already used to a considerable amount of international freight traffic in this country, courtesy of the ferry system. However, in future the amount of freight that we shall see in this country will be vastly in excess of anything that we have seen hitherto. Most of it will travel through Ashford, at least initially.
British Rail produced a report in December 1989 entitled International Rail Services for the United Kingdom which goes some way to outline the strategy which it proposes to follow. However, the report does not make clear one essential problem which we have in this country. That problem is that our trains can run on the Continental railways but Continental trains have fatter and higher bodies than ours and therefore cannot run on our tracks. It is for that reason that special wagons have been used hitherto in the ferry system.
The British Rail report is a little cagey as to the future. However, it comments that the cost of upgrading the railways in this country to full Continental standards would be very great. Undoubtedly it would be so. Nevertheless, I ask that henceforth any new railway works carried out on any route likely to carry Channel Tunnel traffic should be constructed to the standards of

641
Continental electrification and not to the normal British Rail loading standards. I hope that we may have some enlightenment on that point. The Bill is totally silent on the subject.
Although for the time being we may run the special "swap" wagons to carry freight containers, ultimately Europe will get very tired of Britain needing to run special wagons on the European system in order to connect with this country. We must accept that ultimately we shall have to spend a great deal of money upgrading our railways to Continental standards. Hence I believe that new works should be built to those standards now rather than having to be thrown away in a few years time.
I have one final point, which is perhaps splitting hairs. We have been told of the new station at Ashford by the noble Lord, Lord Marshall. I have one technical quibble. The gradients shown on the plans for that part of the railway are most extraordinarly steep. I wonder whether we shall have the old British Rail problem— a little frost, a few wet leaves and, lo and behold, the locomotives lose their grip and the system stalls. Perhaps we could know whether matters could be improved to avoid such problems.
Those are small points. We in this House ought to welcome any improvement in the rail system to take the vast quantities of freight which we may expect from the Channel Tunnel.
7.27 p.m.
Lord Mountevans: My Lords, in common with all Back Bench speakers, I should like to support my noble friend Lord Marshall of Leeds in asking that the Bill be given a Second Reading. In doing so I declare an interest.
My noble friend argued that the Bill's importance lies in the fact that if it receives Royal Assent it authorises a number of works which are essential to British Rail's ability to exploit the Channel Tunnel, the opening of which is little more than three years away. However, I should like to suggest that apart from Works Nos. 1A and 1B— Ashford international— the works are equally important to enable British Rail to cope with increased demand for its services.
On the passenger side we can expect that commuter demand, and domestic demand in general, will continue to grow. I believe that the single European market on the one hand and the ongoing reconsideration of Section 8 on the other will contribute additional freight opportunities for British Rail.
Work No. 2— the West Hampstead chord— opens up new opportunities between South and North London by means of the Thameslink services which have already been established. It enables those services to serve Willesden, Harrow, Watford, Bletchley, Milton Keynes and points north on the West Coast main line. South of the river there are already Thameslink services to Sevenoaks, Brighton, Gatwick and at Wimbledon. Soon we shall have them at Guildford.
Given the problems that our road system faces, which have been debated on many occasions in your
642
Lordships' House in recent memory, I believe that the proposed chord will make railway journeys across the Thames much more attractive. On the one hand there is a better service without the need to change or to use the Underground. I believe that the through service will generally be faster than the journey by road. Either way, the Network SouthEast commuter or the South-Eastern commuter will benefit. Works 3 to 5 serve to increase capacity in Kent. My noble friend explained that they were envisaged as preventing conflict between Channel Tunnel freight and domestic passenger traffic. However, again I feel that they will benefit passenger traffic regardless of Channel Tunnel traffic.
British Rail is committed to accelerating its commuter trains. I feel that there will be conflict between that and the freight traffic. Problems may develop simply because of the single European market and because of Section 8. If that conflict can be avoided, that will inevitably benefit the commuter.
Works 6 likewise is of benefit because it expands both capacity and operational flexibility, whether or not there are international trains.
All those works will be funded by British Rail from its own resources with the commuter potentially standing to benefit as much as the Channel Tunnel passenger or freight user. It is on those domestic user grounds that I urge your Lordships to give the Bill a Second Reading.
7.31 p.m.
Lord Underhill: My Lords, I should like to thank the noble Lord, Lord Marshall, for the way in which he explained the purpose of the Bill. I say at the outset that I wish it a speedy passage through the House.
From time to time in dealing with transport questions a number of noble Lords have urged that there should be provision for infrastructure improvements to ensure that capacity is available for international freight and passenger services through the Channel Tunnel while at the same time ensuring that domestic services are not adversely affected. That is one of the purposes of the Bill.
I daresay that noble Lords have received, as I have, a communication from Kent County Council. It is to petition against aspects of the Bill but it supports the upgrading of existing lines. Frankly, it seems to be one of the most helpful petitions that I have seen for a long time. While it is petitioning against aspects of the Bill, it seems generally to support the principles. It says that it is the only way to meet the needs of 1993, bearing in mind that the fast new rail link will possibly not be with us until 1998.
What is proposed in the Bill is essential while we are awaiting the development of the fast rail link. It is necessary in the interests of freight coming from north of London and also to ease commuter traffic. It is generally agreed that more capacity is essential for freight from the regions. From the communication I gather that that is Kent County Council's objective as well as that of British Rail.

643
British Rail estimates that 75 per cent. of Europe-bound freight will originate beyond London.
Reference has been made to Work 2 in West Hampstead, which will provide the essential link between King's Cross, the West Midlands, the North-West and further north still. Noble Lords may recall that in the past week or so there was a Question on the Order Paper regarding electrification of the Midland main line. I then referred to the fact that the BR corporate plan provides that the East Coast main line, the West Coast main line and the Midland main line will all connect with the low level international station at King's Cross. The King's Cross Bill is now before a Select Committee in the other place and we shall await its decisions.
It is interesting to note that, although Kent County Council intends to petition against the Bill, the authority is critical of British Rail, not because of the Bill but because it is not sufficiently ambitious in its plans to divert freight traffic to rail. The county council says that it is seeking a more positive approach by British Rail and the Government to transfer passenger and freight traffic to rail.
The noble Lord, Lord Crook, referred to the document published in December 1989 by British Rail on international rail services for the UK. It followed the Section 40 consultations held in the various regions. The Bill can only help the discussions which have taken place and the provisions in that plan. We on these Benches would have preferred right at the outset a public inquiry on the whole question of the Channel Tunnel, its routeing, what can be done and so on. However, it is too late to talk of that.
Reference has been made to Works 3, 4 and 5, to provide three freight routes in Kent. I confirm what has been said. I support the view that those loops are absolutely essential if there is not to be a difficulty regarding following up other trains. Also we are assured by British Rail that they will not be used for scheduled trains but will only be used where necessary because of following up trains. Therefore, the loops appear to be advantageous as regards the carriage of freight, international trains and commuters.
Reading Kent County Council's communication, it is obvious that it will support Works 1A and 1B for the construction of the new international station at Ashford. The council wants the station at Ashford which is to be served by international trains from the Channel Tunnel. It also regards it as essential for general development in the area. In fact Kent County Council has emphasised that it wants a firm commitment from British Rail that the station will be ready by June 1993. Therefore, although it is petitioning, it wants to ensure that two of the works mentioned in the Bill will be carried out and be in position when the tunnel is due to open.
The noble Viscount, Lord Massereene and Ferrard, referred to noise. I can appreciate, as can other noble Lords, the concern of Kent County Council and some of its district authorities regarding the limitation of noise on the new lines and also on the upgraded existing lines which are due to carry heavier traffic for a few years. I understand that
644
British Rail certainly has in mind lessening as far as possible the environmental impact of those works. Kent County Council claims that providing noise barriers and sound insulation to dwellings along the upgraded existing lines will cost only £ 3 million. That is a small sum compared with the total investment for the new work and the Channel Tunnel fast link. If that figure by the county council is correct, I hope that British Rail will give the required undertaking that the question of noise is to be dealt with as requested by Kent County Council.
Finally, last week we approved the Third Reading of the Heathrow Express Railway Bill. Noble Lords will recall that the Select Committee of the other place achieved agreement with the promoters, the British Aviation Authority and British Rail for changes which were regarded as necessary in the route. An alternative route was accepted by the promoters and undertakings were also given regarding environmental considerations. The Bill before us today is most useful. When it goes before the Select Committee there is no reason why it should not bear the same points in mind as the Select Committee of the other place did when it achieved success in dealing with the Heathrow Express Railway Bill. I wish the Bill every success through this House.
7.40 p.m.
Viscount Davidson: My Lords, it may be helpful if I speak briefly in this debate in order to give your Lordships an indication of the Government's view on the Bill.
The Government have considered the content of the Bill and have no objection in principle to the powers sought by the railways board. The Department of Transport has no points outstanding on it.
The Bill represents a further stage of planning by the British Railways Board for the time— now only a few years away— when our railway system is integrated into the European network. The board's intention to grasp the commercial opportunities for rail made possible by the Channel Tunnel continues to be warmly supported by the Government.
The Channel Tunnel Act, promoted by the Government, included powers to enable British Rail to build an international passenger station at Ashford. The adjusted location for that station now proposed by the board in this Bill takes into account the possibility that there will be a new Channel Tunnel rail link through Ashford. This seems a sensible step, which has, I understand, been widely welcomed. The Government recognise the importance attached in Kent to having an international passenger station at Ashford, and welcome its inclusion in British Rail's plans. We also support the principle of the other works in the Bill which are similarly related to the provision of international passenger and freight services.
There are 17 petitions against the Bill and the petitioners will have the opportunity to present their objections to the Select Committee. The committee will be in a very much better position than we are tonight to examine in detail the issues involved and

645
they will have the added advantage of hearing expert evidence.
I therefore recommend to the House that the Bill be given a Second Reading and be allowed to proceed in the usual way to the Select Committee for detailed consideration. I am sure that the committee will also take into account the views expressed during this debate.
Lord Underhill: My Lords, before the noble Viscount sits down, perhaps I may make one correction. I mentioned that the alterations to the Heathrow Express Railway Bill were made by the other place. In actual fact they were made by the Select Committee of your Lordships' House. I thought I should make that correction to be sure that the right record is made in Hansard.
7.44 p.m.
Lord Marshall of Leeds: My Lords, perhaps I may say how grateful I am to all noble Lords who have participated in this debate on Second Reading. One or two noble friends, including my noble friend Lord Massereene and Ferrard raised the issue of noise levels. I dealt extensively with the difficulties of the noise problem when I spoke on the matter during the Second Reading debate. It will be remembered that I said in regard to noise levels that the electrically powered vehicles will be much quieter than the present trains using diesel engines; that there were some new disc brake designs and more welded rails allowing for quieter running, especially with regard to noise reduction for those living near or alongside the line.
It is also a comforting fact that in the first years of operation— and I hope the noble Viscount may take some comfort from this— the rail freight services should result in up to 400,000 fewer lorry movements on the road per year over the roads of Kent and the South East. That alone is significant mitigation on the question of noise as it relates to this project.
My noble friend also suggested that British Rail were not very enthusiastic about freight. I hope that upon consideration of any communication to him by British Rail he will have reason to think otherwise. They are enthusiastic concerning freight and will do all in their power to obtain more business. For most people it is logical that freight should be taken prima facie by rail once the Channel Tunnel is completed. There are of course other methods of handling freight— by sea, container ship and the like— but there will be a tremendous increase in business. British Rail feel that it is logical that it should fall heir to the increased freight traffic passing between this country and the Common Market countries, and vice versa. However, I welcome the remarks made by the noble Viscount.
The noble Lord, Lord Crook, welcomed the Bill. I do not think I can be expected to go into the relevance of the British Rail report, which I do not have before me at the present time. However, I must address myself to the point he raised with regard to the difference in guages. It is a matter which was considered right from the start and it would be unreasonable to imagine that British Rail had not
646
paid careful attention to the difference in rail guages. It is not novel. It was probably dealt with in the deliberations of those who were in charge of this exercise.
The noble Lord, Lord Crook, also raised the question of the gradient at Ashford. I do not believe that that is something which has not occurred to the engineering section of British Rail and those in charge of building the track. Those problems will not exist when the project is completed. However, if the noble Lord, Lord Crook, agrees, I shall ask the engineering section of British Rail to contact the noble Lord and discuss these technical matters in correspondence. I hope that they will give him undertakings which he will find acceptable.
The noble Lord, Lord Mountevans, made many serious and helpful points in support of the Second Reading of this Bill. All the matters that he raised will be given serious consideration and I hope that he will be satisfied that British Rail will deal with them. I am grateful for the way in which he addressed himself to the support of the Bill.
There is a point on which I may offer some reassurance to the noble Lord, Lord Underhill. If this Bill goes on to the statute book in due course, the easy interchange between international and Network SouthEast services will be a significant and compelling reason for supporting this type of Bill. A new rail link will enable Ashford to become a focus for Kent express services. A commuter service for East Kent will reduce the journey times between Ashford and London by almost one half. That must be a significant advantage to commuters on Network SouthEast and by itself is possibly a valid reason for supporting the Second Reading of the Bill.
The noble Lord, Lord Underhill, also said that he doubted whether British Rail were sufficiently ambitious for their freight services. I cannot give an undertaking, but I am sure that they are. They are enthusiastic about freight. They expect to be in the freight business in no small way when the Channel Tunnel is complete. They also believe that the normal increase in trade is such that it will be equivalent to an additional 100,000 lorry movements by road in Kent, per se.
Lord Underhill: My Lords, I was not saying that I was critical of British Rail. I was repeating a criticism of the Kent County Council. I believe, as does the noble Lord, that British Rail will do their utmost to develop freight.
Lord Marshall of Leeds: My Lords, I am very grateful to the noble Lord, and I am sure that British Rail will answer that point at the Select Committee. It is a fact that the normal increase in freight traffic is expected to be so great that it will be equivalent to 100,000 lorry movements per year.
The noble Lord, Lord Underhill, also mentioned the question of barriers. I have no means of knowing whether £ 3 million is a fair and reasonable cost for the erection of the barriers which it was suggested may be needed. However, I can say that it is a matter for consideration and to which British Rail will give close attention. Of course, at present I can make no

647
promises and give no undertakings, but what the noble Lord said will be taken on board by the promoters and I hope they will be in touch with him in due course.
I thank my noble friend Lord Davidson for saying that the Government have no objection to the powers sought and that the Department of Transport has no comments to make. I am grateful to hear that the Government support the Bill and I thank my noble friend for his comments. In the circumstances, I ask the House to give the Bill a Second Reading.
Viscount Massereene and Ferrard: My Lords, before my noble friend sits down, perhaps I may say that I unfortunately brought the wrong glasses so I could not read my notes. I thank my noble friend for his kind words.
Lord Marshall of Leeds: My Lords, if my noble friend has lost his glasses and felt in any way handicapped by the loss perhaps I may say that he did very well without them. Perhaps he should lose them more often!
On Question, Bill read a second time, and committted to a Select Committee.
Viscount Ullswater: My Lords, I beg to move that the House do now adjourn during pleasure until 8 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.52 to 8 p.m.]

Education (Student Loans) Bill
Consideration of amendments on Report resumed on Clause 1.
[Amendment No. 18 not moved.]
Earl Russell Earl Russell moved Amendment No.19:
Page 2, line 18, at end insert:
(" (7) A draft of the first regulations to be made under this section or Schedule 2 to this Act shall be laid before each House of Parliament; and if either House of Parliament passes a resolution requiring the draft to be amended the Secretary of State shall withdraw the draft and shall prepare a draft in substitution for the one which is withdrawn.
(8) No resolution shall be passed by either House of Parliament under subsection (7) above in respect of a draft after the expiration of the period of 40 days beginning with the day on which a copy of the draft was laid before that House; but for the purposes of this subsection no account shall be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.
(9) If, on the expiry of the period of 40 days mentioned in subsection (8) above, no resolution requiring amendment of the code has been passed by either House of Parliament, the draft shall not come into force until it has been approved by resolution of both Houses of Parliament.
(10) Where the Secretary of State withdraws a draft under subsection (7) above, he shall lay an amended draft before Parliament and the amended draft shall not come into force until it has been approved by resolution of both Houses of Parliament.").
The noble Earl said: My Lords, this amendment does not repeat the ground covered in the amendment moved by the noble Baroness, Lady Young. I am grateful to her for that amendment and for the victory which has resulted from it. But her amendment secures only that matters involved in the regulations will be discussed in the House.
We have said many times that the difficulty with doing everything by regulation is not only the danger of matters not being discussed, but also that they cannot be amended. As my honourable friend Mr. Beith said in another place, when this Bill was discussed on Report, it is not to be imagined that the regulations, when they emerge, will be entirely without any manner of fault or flaw. Therefore, it is a matter of legitimate concern in a revising Chamber that we should be able to amend matters that come before us especially if they are of really major importance such as the size of the loan.
The procedure invoked with this amendment is one which results from my reading of Erskine May and can be found on page 546. It is a procedure which has not been used frequently, though there are a fair number of precedents. If we continue discussing Bills which put quite so much into regulations as this Bill has done, we may find that this procedure needs to be used more frequently in future. Erskine May states:
"Power has occasionally been given to both Houses to approve a draft Order in Council or draft departmental order with modifications, and in such cases the orders could only be made with such modifications as have been agreed to by both Houses. If the two Houses differ in their amendments, machinery must be improvised for reconciling the differences".
That is something with which we are quite familiar. The procedure concerned has been used in the Education (Scotland) Act 1962. A fairly similar procedure, which is probably familiar to a number of your Lordships, is that used under the Emergency Powers Act 1920. It was used in the Government of India Act 1935 and in a number of similar pieces of legislation. So the power exists. If Parliament pleases, it may confer on the Minister power to do things by regulations subject to this procedure.
In a sense it is a misnomer to say that it confers the power to amend regulations. Strictly speaking, once you have delegated a power you cannot have it back. In a slightly different sense, the power necessarily arises from the power to approve or reject. It is a point which is familiar to all of us. It happens regularly in Committee that, when we have the power to approve or reject, we may easily say, "We would approve subject to the following modification". So it is the power to approve or reject which is being used in a conditional sense. The House takes the power to say that it would approve the regulations if the regulations were modified in a manner which the House then specifies. The Minister then has to take back the regulations and lay an amended form.
When we have such major matters as the size of the loan not spelt out in the Bill, and many of us wish very strongly to discuss whether the loan is big enough, the practical advantages of using a procedure of this kind are very clear indeed. At times, our debates have been lengthy and repetitive. I regret that. I recall the phrase used by the noble

649
Lord, Lord Kilmarnock, at Second Reading of this Bill. He said that it was extremely difficult to make our amendments purchase on the slippery surfaces of this Bill. It has often been a matter of real doubt where to place an amendment in order to discuss an issue which is of major interest and importance to the House.
If we could— and it would be much more appropriate— put down a Motion to ask the Minister to modify the regulations when they come forward, then we should be able to give this Bill the kind of scrutiny which is properly appropriate to a revising Chamber. We should attempt to exercise that scrutiny with responsibility. I beg to move.
The Earl of Caithness: My Lords, as the House is aware, we have agreed that the regulations first made to establish the scheme should be subject to the affirmative procedure. We have therefore met the main objective of this amendment.
I do appreciate the concern behind the secondary effect of the amendment. Regulations cannot normally be amended, under either affirmative or negative procedure. If the House makes its objections plain, the Government may withdraw; otherwise the only option is to vote to reject the regulations. The amendment seeks to provide a means of amending draft regulations submitted for approval under the affirmative procedure.
But in practice the effect is the same. Under the procedure proposed in the amendment, the House would have to vote to require amendment of the regulations. That may look a smaller step than voting to reject the regulations, but either way the vote would have to be secured. After that, the steps would be the same in either case. The Secretary of State would have to take the draft regulations away, and present fresh ones meeting the House's wishes.
The amendment in reality adds nothing to our normal procedures, despite the noble Earl's ingenuity in putting it before the House. We have met his main concern; namely, that the affirmative resolution should apply when the regulations are first made.
Earl Russell: The noble Earl has not met my main concern. I tried to spell that out at the beginning of my speech moving this amendment. I am grateful for the opportunity to discuss resolutions under the affirmative procedure. I wanted the opportunity to amend them. That is the most important power that this House has. Throughout this Bill I have noticed that the Government have slightly different ideas of the functions of a revising Chamber from those of the Opposition parties. As closely as I can follow it, the Government's idea is that they arrange for matters to be discussed; they are graciously pleased to listen to what is said and then occasionally, out of the goodness of their heart, they make a small modification for which we are duly grateful.
In the Opposition parties there is concern for being able to move amendments, to press them to a Division and occasionally to win them in the Lobbies. I am aware, and I am learning daily, that the power of the Division Lobby does not lie only in its use. Indeed sometimes it may be a form of
650
nuclear deterrent which has more power when it is not used. But it is a visible fact in this House that where the power to call a Division exists, there the Government show a good deal more flexibility even if they do not expect to lose the Division. The fact that there could be a Division makes a considerable difference to the process of bargaining and consultation that goes on in debate. That is of considerable importance to us.
The noble Earl said that on an ordinary affirmative resolution we can put down a Motion asking the Minister to withdraw the regulations and to bring them back with modifications. I am glad to have that admission on the record because it is one that I have heard denied in this House from time to time. The noble Earl is perfectly correct in what he said. I think that it would be of considerable value to have it absolutely clearly spelt out and agreed in the House that we can put down modifications to the regulations. That might be of some assistance in the drafting of the regulations.
The House should know by this time that this point is of greater importance to me than anything else involved in the Bill. In those circumstances, I should like to test the opinion of the House.
8.11 p.m.
On Question, whether the said amendment (No. 19) shall be agreed to?
Their Lordships divided: Contents, 57; Not-Contents, 56.

DIVISION NO. 4

CONTENTS

Addington, L.

Kilbracken, L.

Adrian, L.

Kirkwood, L.

Airedale, L.

Llewelyn-Davies of Hastoe, B.

Ardwick, L.

Avebury, L.

Lockwood, B.

Beloff, L.

Macaulay of Bragar, L.

Blackstone, B.

McIntosh of Haringey, L.

Blease, L.

Mason of Barnsley, L.

Carmichael of Kelvingrove, L.

Mayhew, L.

Monkswell, L.

Cledwyn of Penrhos, L.

Monson, L.

Cocks of Hartcliffe, L.

Northfield, L.

David, B.

Ogmore, L.

Donoughue, L.

Oram, L.

Dormand of Easington, L.

Peston, L.

Flowers, L.

Pitt of Hampstead, L.

Foot, L.

Russell, E. [Teller.]

Gallacher, L.

Seear, B.

Graham of Edmonton, L.

Serota, B.

Grey, E.

Strabolgi, L.

Grimond, L.

Thurlow, L.

Hatch of Lusby, L.

Turner of Camden, B. [Teller.]

Henderson of Brompton, L.

Hirshfield, L.

Underhill, L.

Hooson, L.

Walston, L.

Howie of Troon, L.

Warnock, B.

Jay, L.

Wedderburn of Charlton, L.

Jenkins of Hillhead, L.

Whaddon, L.

John-Mackie, L.

White, B.

Kagan, L.

Young of Dartington, L.

NOT-CONTENTS

Astor of Hever, L.

Boardman, L.

Balfour, E.

Borthwick, L.

Belstead, L.

Brougham and Vaux, L.

Blatch, B.

Butterworth, L.

651

Caithness, E.

Kimball, L.

Carnegy of Lour, B.

Lindsey and Abingdon, E.

Carnock, L.

Liverpool, E.

Clanwilliam, E.

Long, V.

Colnbrook, L.

Lyell, L.

Craigavon, V.

McColl of Dulwich, L.

Cullen of Ashbourne, L.

Mackay of Clashfern, L.

Dacre of Glanton, L.

Margadale, L.

Davidson, V. [Teller.]

Massereene and Ferrard, V.

Denham, L. [Teller.]

Mersey, V.

Downshire, M.

Rankeillour, L.

Eccles, V.

Reay, L.

Elles, B.

Sanderson of Bowden, L.

Elliot of Harwood, B.

Skelmersdale, L.

Elliott of Morpeth, L.

Strange, B.

Fraser of Carmyllie, L.

Strathmore and Kinghorne, E.

Glenarthur, L.

Goold, L.

Swinton, E.

Greenway, L.

Trefgarne, L.

Harmar-Nicholls, L.

Ullswater, V.

Henley, L.

Whitelaw, V.

Hesketh, L.

Wise, L.

Hives, L.

Wynford, L.

Hooper, B.

Young, B.

Johnston of Rockport, L.

Resolved in the affirmative, and amendment agreed to accordingly.
8.20 p.m.
Schedule 2 [Loans for students]:
[Amendments Nos. 20 and 21 not moved.]
Earl Russell Earl Russell moved Amendment No. 22:
Page 3, line 38, after ("made") insert ("provided that those who accept permanent employment abroad shall not be liable for any further repayments abroad until they return to the United Kingdom").
The noble Earl said: My Lords, I should perhaps begin by assuring the House that this is a probing amendment. It is not a compassionate amendment. I see no reason why people who go overseas, possibly for a higher salary, have claim to be excused from student loan repayments on compassionate grounds. Moreover, it is not a public policy amendment. I am not advancing an argument of public policy to say that people ought to be encouraged to go overseas. It is simply a practical amendment. My object is to find out whether the Government are capable of recovering student loans from those who go overseas. It is only if they are not capable of so doing that I think they would be unwise to try. When the law enacts measures which it cannot achieve and cannot enforce, it brings itself into disrepute and encourages people to go ahead and break it.
Therefore if the Government can convince me that they are capable of recovering the loan from people who go abroad, I should be quite happy to withdraw the amendment. But, so far as I understand the position, there is no way of doing that except by repeatedly bringing proceedings in foreign courts. That is really taking a sledgehammer to crack a nut. It is a very expensive way of recovering the money and a difficult procedure to enforce.
Tracing people all around the world will create considerable problems. Further, if the Government cannot stop-up this loophole it will inevitably produce a leak in the whole scheme and one which is capable of creating a haemorrhage bringing the whole system to a halt. I shall listen with great
652
interest to what the noble Earl has to say about how the Government propose to tackle the problem. I beg to move.
The Earl of Caithness: My Lords, it cannot be right that those who have benefited from taxpayer support— in the form of preferential loans when students in this country— should avoid repaying the taxpayer by working permanently abroad.
As individuals, students who on graduating work abroad will receive a substantial return on their personal investment in higher education. So will students who work in this country. Society as a whole— the UK taxpayer— will also benefit from the collective investment in the higher education of graduates who work in this country. The return to society on its investment in the higher education of graduates who choose to work permanently abroad may or may not be substantial. It depends what those graduates do. If they work for overseas concerns, the return to the UK taxpayer would be minimal. It therefore cannot be right that, in addition, those graduates should also be excused, by a law passed in the UK Parliament, from repaying their own personal debt to the UK taxpayer. If I may say so what the noble Earl proposes is very close to outrageous, if not outrageous.
The amendment offers an incentive to work abroad. It may very well produce what some academics complain presently exists— namely, a brain drain. Some graduates might not return until their loans had been cancelled. Such a policy would be wholly inappropriate as 1992 approaches and increasing numbers of graduates cross national borders to go to work. We need to find ways to ensure that administrative procedures work throughout Europe, rather than disapplying them when a person chooses to live outside this country.
There would also be a potentially significant effect on the flow of repayments, reducing the rate at which savings accrue to the taxpayer. And there would be no repayments at all from those who chose not to return until after cancellation.
We intend that the Student Loans Company should process repayments in the manner outlined in the rules and procedures document. That specifies that repayment methods for graduates living abroad will be available by negotiation with the company, since the standard direct debit procedure will be inoperable in such circumstances. The document suggests some possible alternatives, such as standing order, cheque, or paying-in book, but this will be a matter for the company to sort out with individual borrowers.
It will also be for the company to decide what debt collection procedures to adopt for graduates who seek to evade repayments by living abroad. They will not want to spend more in retrieving the loan than the value of the loan itself. Nevertheless, we are determined that this will not be an easy manner of escaping the commitment to repay the loan.
Earl Russell: My Lords, I agree with a very large part of what the noble Earl said. I agree in principle with the statements that he made. However, I wish

653
to understand what he will do to bring about this desirable state of affairs. If he can convince me that he can do this, fair enough. But he had very little to say about it. He said that arrangements would be by "negotiation with the company". That seems to me to raise problems. It seems to suggest that if you once take a student loan you cannot go and live abroad without first informing the Student Loans Company. I should like to know how that provision will be enforced and how the company will know whether people travelling from Heathrow are going on holiday or going abroad? Is this a requirement for exit visas, or is it a piece of pie in the sky? Before the noble Earl asks me to withdraw the amendment, I should be most grateful if he could explain in more detail exactly what is the Government's thinking on the matter.
The Earl of Caithness: My Lords, whether the noble Earl withdraws his amendment is a matter for him. In any event, I hope that he listened carefully to what I said about the repayment process as outlined in the rules and procedure document which I am sure he has read carefully. There is no question of an exit visa, but I think it is appropriate that the company, as a commercial entity, should have the power to collect loans by whatever method it so chooses from undergraduates who have taken loans and who then go to live and work abroad.
Perhaps I may repeat for the benefit of the noble Earl the fact that when so doing the company will wish to bear in mind what the cost will be of ensuring that the loan is repaid. That will be a material factor which the company will wish to take into account.
Earl Russell: My Lords, I said that this was a probing amendment. I probed and I found a gaping hole. I cannot see that the Government have any procedure to recover loans from those who go abroad. Under those circumstances to claim that they intend to do so can only be a pious aspiration. Nevertheless, because I agree with what the noble Earl said— namely, that people who go abroad do not have any equitable claim to renege on their debts— and because I agree with him that the House should not encourage them to do so, I do not intend to press the amendment. However, I should like to put on record the fact that I think we have discovered a haemorrhage in the Government's scheme which may well result in all the money leaking out of it and the scheme becoming inoperable. However, that is their problem. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.30 p.m.
Lord Peston Lord Peston moved Amendment No. 23:
Page 3, line 38 after ("and") insert:
(" () make provision for the option to be maintained that weekly repayments to be made at a rate of no more than £ 8 per week at current prices (to be increased with regard to the retail prices index published by the Central Statistical Office of the Chancellor of the Exchequer); subject to provisions concerning deferment or cancellation described in 1 (1) (c) below' and").
The noble Lord said: My Lords, the amendment covers a topic at which we have looked before to
654
some degree. In Committee I thought that the noble Earl made one or two important statements about repayment periods and the limited weekly or annual commitment that any individual graduate would have in respect of repaying the loan.
I have read the statements made on the matter by the noble Earl, and possibly the noble Baroness. They do not seem to me to be as clear as I should have liked. I shall put the matter as bluntly as I can. I am not clear as to whether they rest their case on the kind of words which I think they used; namely, that no graduate would have to pay more than a reasonable amount, or words to that effect. Occasionally they said that they would not have to pay more than £ 400 a year, at constant prices. That is a much more precise statement. Essentially, I am trying to probe the Government's mind about which of these positions they currently wish us to believe they have adopted.
Perhaps I may use this occasion to ask a more general question. If we make the assumption that the Bill will pass into law— which is the assumption that one tends to make— shall we at an early stage receive a full statement of what the student loans scheme amounts to? We have learned more and more about it as we have carried out our job in your Lordships' House in terms of the Committee and Report stages. However, we still do not have an overall definitive statement of the student loans scheme. I ask whether there will be such a statement. Of equal interest is when there will be such a statement. I do not necessarily expect an answer to that at this moment, I simply place on record a question which concerns all noble Lords who have taken part in the debates.
That follows on generally from my specific question as to what the Government can tell us at the moment about the annual commitment in terms of repayment. I beg to move.
The Earl of Caithness: My Lords, it is the Government's intention that repayments should be about £ 400 a year. As I have already announced, we are extending the period of repayment to seven years initially for those who borrow over five years so that their repayments do not exceed this level. As the scheme develops and the maximum loan each year increases in real terms, we shall extend the repayment period so that repayments remain at a manageable level.
As your Lordships know, repayment can be deferred for up to a year if a graduate's income is below 85 per cent. of national average earnings— about £ 11,500 in today's circumstances.
We do not believe that we should fix these terms on the face of the Bill. The details of the repayment arrangements will be set in regulations which your Lordships will debate under the affirmative resolution procedure before the introduction of the scheme. As we increase the repayment period we shall need to amend the regulations; that process will be subject to parliamentary scrutiny under the negative resolution procedure.
The noble Lord, Lord Peston, asked for a statement on the student loans scheme. I am not

655
quite sure what kind of statement he wishes me to make. I seem to have been making quite a lot of statements about the scheme, providing information to the House and answering the questions that the noble Lord has asked. I think he refers to regulations. In addition, there are the points that we discussed on some of the administrative procedures which will not come before your Lordships' House. I should have thought that I had given your Lordships more than enough information about the scheme and how we intend to proceed with it. If the noble Lord has any particular point on which he needs clarification, in addition to the amendments that we have discussed and those which are down in his name for future discussion, I shall be only too happy to try to answer.
Lord Peston: My Lords, I thank the noble Earl. On the latter point, perhaps I should clear up what I tried to convey. My point is that the noble Earl has given us more and more information every time he gets up. We are grateful to him for that. Some of us have been trying to put the pieces together, to convert them into one large patchwork quilt which has a logical structure or pattern to it. However, it seems to me that the time will come— I am not pressing him to do this at the moment— when the Government themselves will wish to produce a complete document stating, "All that has now been said amounts to the following … "That is all I have in mind.
I am not complaining about each individual piece of information. The Government ought to put the bits together rather than relying on me or other noble Lords doing so. I think the noble Earl will understand what I have in mind.
On the specific amendment, perhaps I may place on record that, if I understand the noble Earl correctly, when the scheme is in full operation and in broad terms operating as suggested at the moment, the typical three-year graduate will have an indebtedness of about £ 4,500. That is three times £ 1,500. That will be uprated by the rate of inflation, I am speaking in terms of constant prices. If the student repays £ 400 a year at constant prices, we are talking about the student who starts to pay back as quickly as possible over an 11-year repayment period. That is my reading of what the Government have stated.
Some students will pay back over a still longer period. Four-year students will do so, as will the students who delay and so forth. It is worth pointing out the logical consequence of what the noble Earl has said. That is the whole point of my thanking him for the information and for his response. Having taken the matter as far as I can, this is the time to leave it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness David Baroness David moved Amendment No. 24:
Page 3, line 40, at end insert:
(" (d) make provision to ensure that no person or body by whom functions are discharged under paragraphs 3 (1) or 3 (7) below shall secure access to any record held by an institution
656
which provides or has provided courses or which have been specified in Schedule I above, where any such record concerns a person who is or has been an elegible student")
The noble Baroness said: My Lords, this is a probing amendment. Its purpose is to restrict the ability of those administering the scheme— that is the Student Loans Company— to gather information on students from the institutions which students have attended while receiving a loan.
Given the confusion over how the administration of the student loans scheme is to take place, it is important that by moving this amendment we can at least deal with which bodies will hold and have access to various levels of information concerning students with loan liabilities.
While there is a certain legitimacy for the Student Loans Company to hold information on the financial arrangements of eligible students, it is important to put limits on wider levels of information. It would be totally inappropriate that the SLC should have access to general files held by colleges on students.
There have been several discussions in the House on protecting information held on students, which has resulted in a general acceptance that maximum protection is desirable. In practice, protection of this information is not so simple, as debates have shown. If the amendment is not accepted, either in itself or in spirit, there is a danger that colleges will be inundated with inquiries from the SLC.
What obligations will there be on institutions to respond to inquiries from the Student Loans Company? At what point can the institutions refuse to provide information? What resources will be given to institutions if they are to deal with follow-up inquiries from the SLC in addition to certification at the application stage?
The amendment is even more apposite when it is applied not just to information sought by the SLC, but also to third party arrangements such as with debt collectors. It seems outrageous that debt collectors taken on by the SLC should be able to receive information from colleges, particularly when its scope is not restricted. I hope that the Minister will be able to alleviate some of the anxieties when he replies. I beg to move.
Baroness Young: My Lords, before my noble friend gets up to reply to the amendment, can he tell us whether the relationship of the Student Loans Company in this would be different from the relationship that would have pertained had the banks been running the scheme? Would institutions stand in the same relationship to the Student Loans Company as they would have stood in relation to the banks? I have always understood that to be the case. It would be helpful to know whether similar businesslike arrangements will apply.
Perhaps I may say to my noble friend that it has been helpful to have the extra information about what is involved in the whole matter of certification. It has clearly explained that there is a limited role for institutions. I should have thought it would be helpful if, as I had assumed, there were the same kind of relationship on other matters as would have applied to the banks. Perhaps my noble friend can clarify the second point.
Lord Grimond: My Lords, I too should like further information on this matter. It does not seem to me at all clear exactly how the Student Loans Company will work. It is a wholly separate limited company; it is not under the direct command of the Minister. He cannot tell it what to do, I take it. It will be bound by the laws of limited liability and by this Bill when it becomes a statute. It seems to me that in fulfilling its functions it is going to make large demands on universities and colleges for information to enable it to follow up students. The previous series of amendments raises important and difficult matters in this regard. It may be known to universities if ex-students have gone abroad, as they tend to keep in touch with their former graduates. Where graduates go after graduation and what they are doing are all questions which the company, whether the Minister likes it or not, may want to raise with institutions. I believe that a large amount of work may be placed upon institutions and they will be in some difficulty as regards knowing whether they are entitled to reply to inquiries or whether they should reply.
As I have said, most universities and colleges maintain some contact with many of their former students. It is difficult to see how a lot of that information can be obtained except from those institutions. If that is the case, they will face a great burden of work. I believe that that burden is at the discretion of the Student Loans Company and not of the Minister. Unless something is written in the Bill prominently, or we are informed of the situation to a greater extent, we may find that we have laid on universities a large and rather open-ended burden. I should be grateful for some information on that matter.
The Earl of Caithness: My Lords, this amendment would require the Secretary of State to prohibit by regulation access by the Student Loans Company (or any other person or body discharging functions under the arrangements) to any record held by a higher education institution concerning an eligible student. There is no qualification that the access would have to be without the institution's consent. I assume therefore that the noble Baroness wishes to prevent such access even where the institution does consent.
In so far as the amendment would apply to data held electronically, it is unnecessary. Higher education institutions are already subject to the provisions of the Data Protection Act. This Act provides valuable protection for data subjects. It prohibits the disclosure of personal data without the authority of the person to whom the data relate. The protection sought by this amendment in respect of electronically held data is therefore already embodied in legislation. It is pointless to provide in a Bill that a person or body must comply with an Act when it is already subject to that Act.
The amendment would, however, also apply to data held manually. Such data are not covered by the Data Protection Act. We debated at Committee stage whether the company should be subject to
658
restrictions not imposed on other companies in respect of its use of manually held data. The Government's feeling was that it should not. Nevertheless, I undertook to consider the reservations expressed by a number of your Lordships on this issue and, as your Lordships will be aware, I have now put down Amendment No. 51 which would restrict the company in its use of data, including those data held manually. The company will be able to operate the loans scheme within those restrictions, although they will certainly limit its activities. However, the present amendment would impose a major obstacle to the efficient operation of the scheme.
As your Lordships know, the Government propose that after certifying a student's eligibility for a loan, the institution should post a copy of the certificate of eligibility to the company. The institution would retain a copy of the certificate, together with a document containing various questions answered by the student, designed to establish whether he is eligible. The answers to these questions will not be sent to the company, which will normally accept as valid a certificate issued by the institution.
However, the company may wish to request access to this document where doubts arise later about whether a particular student was in fact eligible or simply for audit purposes. The amendment would prohibit this. It could also be argued that the institution would be unable to send to the company a copy of the certificate of eligibility because this would be a record concerning the named student which the institution held before posting it.
The Government have a duty to ensure that taxpayers' money is lent and recovered in a secure and efficient way under the scheme. This amendment would jeopardise taxpayers' money.
When the noble Baroness, Lady David, introduced this amendment she said there was some confusion concerning the role of colleges in the future. Perhaps that thought had occurred to her before she looked at Amendments Nos. 35, 36, 44, 47, 48 and 54 standing in my name. I am sure the noble Baroness will find that those amendments clarify the situation beyond any doubts that she may have. I should make it clear that there is no question of the Student Loans Company needing or having access to college files on students. Colleges will have no role beyond establishing their students' eligibility. They will have no role in repayment or debt collection. I hope that is clear.
My noble friend Lady Young asked about the similarity between the Student Loans Company operating the scheme and the banks operating it. As I understand the situation, the question of confidentiality would be the same in both cases. However, there would rightly be a difference in the details of the procedure to be operated. I hope that what I have said has now satisfied the noble Lord, Lord Grimond. There is nothing for the Student Loans Company to follow up with colleges. After students leave, colleges will have no role to play in this matter at all because repayment is entirely a matter for the graduate and the SLC.
8.45 p.m.
Baroness David: My Lords, I thank the Minister for that full reply. I admit that my amendment was tabled well before his. However, I think it has been helpful to clarify the situation. I am grateful for his explanation. I shall of course read his words with great interest to make sure that all my points have been cleared up. Certainly at this moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 25 and 26 not moved.]
Lord Peston Lord Peston moved Amendment No. 27:
Page 3, line 40, at end insert:
(" (1A) No student in receipt of a loan payable in accordance with regulations made under this paragraph shall be ineligible for Housing Benefit during his period as a student whether as a consequence of such regulations or of the provisions of or regulations made under this or any other enactment.").
The noble Lord said: My Lords, I have not spoken on housing benefit during your Lordships' deliberations on this Bill until now. That is not because I do not think this is a tremendously important matter but simply because others who are more expert than I have taken the lead. However, this is now my opportunity to emphasise how important this is and how mistaken I believe the Government to be in all that they are doing concerning the provision of social security for students.
I shall start with one general proposition. I heard one or two noble Lords say that they thought that the social security provisions were inappropriate for students. I have looked right back through the history of the provision of social security in this country, not least at the original definitive work of Sir William Beveridge, who later became Lord Beveridge. I can see nothing in that history in terms of the philosophy of what should lie behind social security that would suggest that the Government are remotely right in saying that social security is inappropriate for students. Indeed, I believe they are completely mistaken in that.
The only way in which they could possibly be right is if students were given sufficiently large disposable incomes to enable them to do without social security. But the point is that they are not given such incomes and therefore social security becomes the appropriate way of dealing with these matters. I must emphasise to the Government that I believe that their general position is mistaken.
I have several points on housing that I wish to draw yet again to the attention of your Lordships. One is that if one does one's sums and compares the gains that students might obtain under this legislation, including the restoration of the real value of the grant to its 1979 level, one realises that many students who would have been on housing benefit, and certainly students in a place such as London, will simply lose out. I am advised that students in London who face, for example, rents of £ 45 or £ 55 a week and who would have obtained housing benefit with that kind of rent, will be net losers once the loans scheme is introduced. They will be losers to the tune of several hundreds of pounds. According to one calculation, they will lose out to the tune of
660
over £ 1,000. That is even the case for students living outside London where rents are lower. They too will lose out.
It seems to me that the Government are simply taking away with one hand, and not so much giving back with another but giving back a good deal less with another when it comes to housing benefit. That seems to me to be the serious matter. The point applies a fortiori to postgraduate students who are not going to be allowed into the loans scheme, although some of us have argued that they are the key group who ought to have had loans tried out on them in the first place. However, they will lose out on housing benefit.
I welcomed earlier the statement that the noble Earl made, repeating something said by his right honourable friend the Secretary of State, that the Government are now going to provide rather more in the way of funds under the heading of access funds. But I have to say that much as the increase is welcome, it is actually again a drop in the ocean compared with the money being taken away under the housing benefit heading. Therefore, I must press your Lordships to reconsider the matter.
I have one further point to make and then I shall sit down. The reason for sitting down is not to underestimate the importance of the matter, but simply because of how much more business we have to get through. I should like to place on record my opposition to certain remarks made in the original White Paper, and reiterated by the Parliamentary Under-Secretary for Education and Science in another place on 25th January 1990, where the White Paper lays emphasis in terms on helping students who have problems and for whom access funds will be worthwhile; that they might be sponsored; that they might find paid employment, and things of that sort.
I do not totally oppose that; but I have to emphasise, probably as a rather old-fashioned university teacher, that I still regard study as the main function of students. I am simply not happy with the introduction of financing systems which emphasise medical students taking part in drug trials and other students getting paid employment, etc. It is not unacceptable so long as it is in the general de minimis range; but if students in this country do not realise that they are there chiefly to study, if we do not see the role of grants to support them so that they can study, we are in a difficult position. I beg to move.
Earl Russell: My Lords, I must confess that I still do not altogether understand why the Government are quite so determined to take students out of the social security system. The main point that they seem to make consistently is that student support should come from educational sources. I have no wish to argue with that point, but the proper way to achieve that laudable objective is to pay students maintenance above benefit levels. If the Government can do that, then any move to deprive students of social security entitlement is entirely redundant.
If the Government tell us that the move to deprive students of social security entitlement is not

661
redundant, then they are telling us in the same breath that with their new loans scheme they are failing to pay students above benefit levels. The attempt to withdraw students from social security is actually a confession of the inadequacy of the Government's own financial measures.
There are three benefits involved, and there are different cases involved in each. This amendment is in fact only addressed to one of them. We are not addressing unemployment benefit. I agree with what the noble Lord, Lord Peston, said about students working. It would be much easier of course if they had a grant that could maintain them all the year, but that is another matter.
With income support it is possible to argue a case on the grounds that they have withdrawn from productive employment. The difficulty is that the logic of that case would apply equally to young mothers who have chosen to stay at home with children, and that I would regard as a very dangerous extension of the argument. However, that is by the way. This amendment is concerned only with housing benefit.
All the undergraduates that I have talked to, and all my departmental colleagues, agree that of all the social security benefits, housing benefit is by far the most important. When I returned to my college last Tuesday after a day in the House I was actually taken to task for not making enough fuss in this House about housing benefit, by which I must confess I was a little disappointed.
Housing benefit is of course a targeted benefit. Where the rents are highest, where the need is greatest, that is where the money goes. The Social Security Advisory Committee has already drawn attention to the fact that attempts to replace this are not targeted with anything like the equivalent precision. It seems to me also that there are dangerous issues involved in withdrawing an entitlement to social security benefit from a category of people as a category. I should like to ask the Minister whether there are any precedents for doing this.
I know about the 1986 Act. We have debated at some length the effects of the reduced rates for people under the age of 26. But although the principle is similar, that was only a reduced rate. When has anybody been deprived of entitlement to social security benefit simply for belonging to a named category of people? I cannot think of a case. I can imagine the reaction in this House if social security benefits were to be withdrawn, for example, from women, or from racial minorities, because they belonged to a particular category. I do not see why students are different. This is a dangerous precedent to set, and I deplore it.
I also want to speak to Amendment No. 33, which is grouped with this one. That is about the withdrawal of housing benefit from postgraduates. Here I do not merely think that the Government are wrong. I do not merely think that their sums are wrong. I simply fail to follow their logic even within their own terms of reference. The logic of the Government's argument is that since students are getting this glorious loan, now they do not need
662
social security benefits. But postgraduates are not getting the loan, so the reason we are given for the withdrawal of the benefits simply does not apply.
I completely fail to understand the logic of why postgraduates are being taken out of the social security system. I cannot understand it at all. It makes me wonder whether there is some reason, some assumption maybe unstated even in the Government's own mind, behind this proposal that we have not yet found and while I cannot understand it, I feel bound to oppose it.
Baroness Young: My Lords, this is obviously an important subject to debate, and we have raised it both at Second Reading and on the Committee stage. Although I do not in any way wish to follow the noble Lord, Lord Peston, in all his academic discourse on whether or not social security benefits were intended for students, I must say that it is some while since I read my copy of the Beveridge Report. I suspect that social security benefits came to be given to students because they started off with allowing unemployment benefit in the long vacation on a kind of assumption that a student was unemployed.
That is my supposition. I do not think that was a correct analysis; but I suspect that that was how it came about, and I suspect that housing benefits were added to it. I have always said in your Lordships' House that I do not believe that the social security system is the right way of helping students in this particular way. I stand by that.
What we need to get clear— and I think my noble friend made this clear when we discussed this matter before— is whether or not students are actually going to lose cash in hand. One of the criticisms of this Bill made by my noble friend Lord Boyd-Carpenter was that it was not going to save money for a long time to come. Then, on the other hand, one gets the criticism that it is going to save money. As I understand it, the amount of money that is going to be given by way of loans will far exceed what is currently being given by way of housing benefit. Students coming up to the university next October, with the increased grant topped up by the student loan for maintenance only, will be better off in cash terms than they are now.
I recognise the important distinction that a loan is not a benefit. That is the difference. Nevertheless, the student is not left without money, which is an important consideration. Therefore, to say that students will have less cash seems to be simply not true. I hope that my noble friend will confirm that point. It has been stated at earlier stages— indeed, it is stated in the financial memorandum to the Bill— that considerable sums of extra money will go into the student loans scheme.
As I understand it, the noble Earl, Lord Russell, asked whether any group would lose benefits. In that sense, students will not receive housing benefit, but they will have a student loan, so, strictly speaking, it is not true to say that they do not have the money, although I recognise that it comes in a different form. It is important that we should make that distinction.

663
I therefore hope that the Government will not accept the amendment which I believe cuts across an important part of the Bill. I believe that my noble friend will be able to reassure the House that more money will be available to students through the loans system than is currently available through housing benefit.
9 p.m.
Baroness Seear: My Lords, what the noble Baroness says in no way deals with the problem of the postgraduate student referred to in Amendment No. 33 who will not receive a loan. I want to speak strongly in favour of the retention of housing benefit for those postgraduate students who are without loans. They are the cream of the graduate population. They are the people by whom the creative and academic roles and a variety of leadership roles will be filled. If they are to be starved out of doing graduate work because they have neither loan nor housing benefit, then the nation, quite apart from the individual graduate, will be very much the poorer. I strongly hope that the Government will reconsider the case for the graduate student as put forward in Amendment No. 33.
Baroness Elles: My Lords, I wish to take up a point made by the noble Earl, Lord Russell, when he asked why any category of people should be taken out of part of the social security system just because they happen to be students. Many thousands of people receive housing benefit and other forms of social security, but they do not have the possibility of receiving a maintenance grant from their local authority in order to study, nor will they have the opportunity of a top-up loan.
There is a perfectly valid reason for taking students out of that category. I do not say that they will be better or worse off, but simply that there is a perfectly respectable argument as to why students should be regarded in a separate category, because of moneys that they receive from other sources, from those who are in a disadvantaged position and definitely need housing benefit and other forms of social security.
I have one or two questions which I should like to put to my noble friend Lord Caithness and which I hope will clarify the position. First, I am sure that there is no one in the House who wants to see anyone materially disadvantaged by the top-up loans scheme. Surely we all agree on that point. I should therefore like to ask my noble friend whether there will still be categories of students who will be eligible for housing benefit and other social security assistance such as single students with children and disabled students. Perhaps my noble friend will give us some information on that matter.
Secondly— I raised this point on Second Reading— we hope that universities and other institutions will ensure that, where students are in accommodation which comes under some measure of control of those institutions, the sums which are at present paid by students will be reduced because there was a rateable element in the amount that they
664
had to pay. The institutions should take that point on board.
Finally, I should like to ask my noble friend how in the case of disadvantaged students— we can all imagine categories of students who will for one reason or another be disadvantaged by the removal of housing benefit— the access funds will be allocated. Presumably, the access funds will come into play in the case of a student who is disadvantaged financially and cannot manage to pay his or her rent, even with a top-up loan. He or she will be able to go to the fund for an extra increment. It would be helpful to know how that system will work, who will run it, how students will apply and whether it will be conducted on a discretionary basis as per institution or by some independent body. No doubt my noble friend has already set out certain rules, but it would be helpful for the House to know exactly how the access funds will be used to help those students who will be disadvantaged by the withdrawal of housing benefit.
Lord Adrian: My Lords, for me the difficulty about the Bill is that, on the face of it, it does good by providing more resource for all students, but, not on the face of the Bill— indeed, at the behest of a department other than the Department of Education and Science— about half that resource is to be removed from a group of students who are in substantial need because of high housing costs. Access funds will go some way to meet that difficulty, but I suspect that the sums of money are such that access funds, even when increased as I understand they are to be, will prove inadequate to cover that group of students and their housing costs. The amendment seems to go some way to removing that great difficulty and I support it wholeheartedly.
Lord Beloff: My Lords, I should like to support the point made by the noble Baroness, Lady Seear. I happen to agree strongly with the noble Baroness, Lady Young, that, if one were to start again with a system of student support, one would not bring in social security. One disadvantage of the fact that the social security system is involved is that we have no opportunity, and have had no opportunity even during our lengthy discussions, to look at the situation of students as a whole, particularly the situation of postgraduate students.
It seems to me that there has been an underestimation of the almost catastrophic degree to which British postgraduate students are disadvantaged. The removal of housing benefit will be a further disadvantage. No doubt we can continue to have a position in which postgraduate courses are largely studied by overseas students whose governments and paymasters appreciate what is on offer in this country. But if we are to look at the progress of science and learning, we have to have native postgraduate students.
It has already been pointed out that the next stage of research, when presumably people will be expected to begin to pay back their undergraduate loans, is also a very difficult period. Anyone who knows anything about the current situation in many laboratories and departments knows that. Therefore

665
it seems to me that, although one can argue about the position of undergraduates— whether and by how much they are worse off— there is no question but that postgraduates will be worse off.
I should be much happier if postgraduate grants were increased to something like a reasonable level and housing benefit were not required. But until that is done the country is at grave risk of not having, as I think the noble Lord, Lord Adrian, said, the seedcorn for the next generation.
The Earl of Caithness: My Lords, I was very surprised to see this amendment on the Marshalled List. After the noble Lord, Lord Peston, said that he was very keen to follow the procedures of the House and not to break the traditions or orders under which we operate, I have to say that I was even more surprised when he moved the amendment. The amendment that we are discussing at the moment is based on exactly the same principle as one on which we voted last week. That amendment, Amendment No. 42K, which was moved by the noble Baroness, Lady David, who now sits in her place, was lost by 51 to 19 votes, I am therefore more than a little surprised that the noble Lord again raises exactly the same principle today.
For the reason that this principle has already been discussed and voted upon, this amendment deserves short shrift. However, in view of the concerns that have been expressed around the Chamber I shall once again go into a little detail. It was admittedly late at night when I last did so but I re-emphasise that the amendment in question was put to the vote. I shall take a little time to deal with the matter. The only difference between the amendment on which we voted at the last stage of the Bill and this amendment is that we are now dealing solely with housing benefit and are concerned with both postgraduates on research degrees and all students in the scope of the loans scheme. Otherwise the principle is exactly the same.
Baroness Seear: My Lords, is the noble Earl saying that this is not in fact a different amendment from the one we had last week.
The Earl of Caithness: My Lords, I said that the principle is exactly the same and I know that the noble Baroness would agree with that.
The Government believe that financial support for students should be provided through the education system according to educational criteria. We oppose the use of social security to direct support to students, because the benefit system, which exists to help those in involuntary financial difficulty, was never intended for the support of students. Morever, the short-term cyclical nature of students' benefit claims causes administrative problems and generates costs out of all proportion to the amounts claimed.
Our proposals mean that the great majority will have more in loans than they could have claimed in benefits, which is a point well made by my noble friend Lady Young. We estimate that among those undergraduate students who might have received benefits in 1990–91 the average claim would have been £ 315, significantly less than the value of the
666
loan. Furthermore, a large minority would not have claimed and for them the entire loan is an additional resource. The difference between overall gains through loans plus the access funds and losses from the withdrawal of benefits is in excess of £ 100 million in students' favour.
Nevertheless, we accept that there will be some students whose benefit entitlement would have exceeded the loan facility. If in financial difficulty, such students will be good candidates for assistance from the access funds. The same is also true for those postgraduate students who have hitherto claimed benefits and find themselves in financial difficulty because their entitlement has been withdrawn. As I said last week, my right honourable friend the Secretary of State has been considering the size of the access funds in the light of representations received and earlier today I confirmed that he announced in another place that the Government are to increase the size of the access funds to be set up to assist students in higher education who face financial difficulties from £ 10 million to £ 20 million. That is a doubling.
The additional £ 10 million will double the total funds available for postgraduates and undergraduates. That will give the higher education institutions greater scope for extending discretionary assistance on a flexible basis to their students, notably those facing relatively high accommodation costs.
We intend that most of the extra money will be targeted on undergraduates, of whom there are about 10 times more than postgraduates. The access fund for further education students, very many of whom live at the parental home, will remain at £ 5 million. In total therefore there will then be £ 25 million rather than £ 15 million in the three funds. I know that the noble Lord, Lord Peston, says that that is only a drop in the ocean, but I put it to noble Lords that it is not a drop in the ocean. It is a significant increase that has taken account of the anxieties that have been expressed by many of your Lordships.
Let me re-emphasise this. It was a point raised by my noble friend Lady Young. The students who are claiming housing benefit at the moment will claim about £ 68 million a year. The value of the loans, if I remember correctly, is about £ 178 million. That is over £ 110 million in excess going to the students— a real increase for students. On top of that, there are the access funds which for those in higher education have today been doubled precisely to take account of the concern that your Lordships have enunciated again this evening. I believe that the Government have gone a very long way indeed to meet the anxieties of noble Lords.
The Government's policies are clearly more than generous to students. But I am sure that this House recognises that we must also be fair to the taxpayer. This amendment would deprive the taxpayer of the resources saved by removing students from the housing benefit system. We are already making more resources available to students. I put it to your Lordships that it would be an unnecessary and inappropriate burden on public expenditure if they were to retain access to the benefit system as well. As I said at an earlier stage, it is very much part of

667
one equation. If your Lordships seek to remove one part of the equation then undoubtedly the remainder of the equation must be put in jeopardy.
The noble Earl, Lord Russell, and the noble Baroness, Lady Seear, talked at length about their concern for the postgraduate students. I repeat that our view is that student support should come from educational resources. That applies to all students. For undergraduates, loan plus grant plus access fund more than compensates. For postgraduates, the separate postgraduate fund provides an alternative source of income for postgraduates to social security. It can be targeted by the education institutions.
Let me give this reassurance to the noble Earl. In proportion to student numbers the postgraduate access fund is larger than that for undergraduates. That is in recognition of the fact that postgraduates do not have the benefit of the loan.
The noble Earl also asked what precedents there were for removing entitlement to benefits. Students are already excluded from income support during the period of study, including the short vacations. Also neither students living in university accommodation nor foreign students are entitled to housing benefit. The Government's current policy on social security for students takes these measures a step further at a time when new and additional forms of student support are being made available. This policy fulfils a commitment that has been restated over a number of years.
Again, the noble Earl raised the important point that social security benefits are targeted to student needs whereas the loans will not be. Benefit targeting in relation to student claims is not very effective because no account is taken of the student's family circumstances and parents who could pay more towards their children's support are not asked to do so. Moreover, when calculating entitlement to means tested benefits, it is assumed that students receive any assessed parental contribution to the grant. Yet we know that about 40 per cent. of students assessed to receive a contribution do not receive the full amount. For housing benefit, all students are assumed to have the weekly rent element in the grant even if they are not eligible for an award from their LEA.
In contrast, under the new system, students will be able to draw as much or as little of their top-up loan entitlement as is appropriate to their personal circumstances, without the need for a vast administrative machinery for assessing individual entitlements.
My noble friend Lady Elles raised an important point about which students retain benefit entitlement. That needs clarification. As noble Lords know, not all students will lose benefit entitlement. Students who are single parents or disabled will retain entitlements to benefit, as will students' families. In addition, students who currently qualify will retain entitlement to all benefits— other than income support, unemployment benefit and housing benefit— including family credit, one parent benefit, child benefit, free dental care and prescriptions and disability benefits including mobility and attendance allowances.
668
I hope that I have covered the matter very fully and met the concerns of your Lordships. I understand those concerns. That is why we have taken such trouble to get the scheme right. It is worth repeating and making it absolutely clear for the record that social security uptake at the moment equates to £ 68 million. The value of the loan considerably exceeds that amount— by £ 100 million and more. On top of that there are the access funds for those in higher education which have been doubled today.
We have taken immense care to see that the people we seek to exclude from housing benefit are catered for in other ways. That is indeed taken care of. I hope that in view of the fact that we have already divided on the principle of the amendment the noble Lord, Lord Peston, will now seek to withdraw it.
Lord Peston: My Lords, I thank the noble Earl and all noble Lords who have contributed to the debate on this important matter. The debate enables us to clarify one difference between us as to the net benefit of the scheme. The noble Earl will recall that I argued that the money which brought the grant for the average student back to its level in real terms in 1979 was money that was owed to the student and any net new money would have to be over and above that amount. Therefore my calculations as to what is net are very different from the Government's calculations.
I do not want to be accused of rehearsing a Marx Brothers' script, but I am surprised that the noble Earl is surprised at my putting down the amendments. I understood that the amendments were perfectly acceptable within the rules and they raise important matters. I understood that noble Lords wished to have an opportunity to express their views, first, on housing benefit in particular and, secondly, on the position of postgraduate students. The reason for putting down the amendment is that the earlier amendments were much broader. Some noble Lords had told me that they had difficulty with those amendments but they would not have difficulty with an amendment in this form. That is what lies behind the amendment.
Therefore, I am not abashed by the noble Earl although I listen very carefully when he admonishes me on any matter. I feel that this is the last opportunity for noble Lords to place their views on record on this matter. I must therefore test the opinion of your Lordships' House.
9.22 p.m.
On Question, Whether the said amendment (No. 27) shall be agreed to?
Their Lordships divided: Contents, 98; Not-Contents, 51.

DIVISION NO. 5

CONTENTS

Addington, L.

Beloff, L.

Adrian, L.

Birk, B.

Airedale, L.

Blackstone, B.

Alport, L.

Blease, L.

Ardwick, L.

Boston of Faversham, L.

Avebury, L.

Briginshaw, L.

669

Brooks of Tremorfa, L.

Llewelyn-Davies of Hastoe, B.

Bruce of Donington, L.

Lockwood, B.

Callaghan of Cardiff, L.

Lovell-Davis, L.

Carmichael of Kelvingrove, L.

Macaulay of Bragar, L.

McIntosh of Haringey, L.

Cledwyn of Penrhos, L.

Mackie of Benshie, L.

Cobbold, L.

Mason of Barnsley, L.

Cocks of Hartcliffe, L.

Mayhew, L.

David, B.

Milner of Leeds, L.

Davies of Penrhys, L.

Molloy, L.

Dean of Beswick, L.

Monkswell, L.

Donoughue, L.

Nicol, B.

Dorm and of Easington, L.

Northfield, L.

Ewart-Biggs, B.

Ogmore, L.

Falkender, B.

Oram, L.

Falkland, V.

Peston, L.

Flowers, L.

Pitt of Hampstead, L.

Foot, L.

Ponsonby of Shulbrede, L. [Teller.]

Gallacher, L.

Galpern, L.

Prys-Davies, L.

Gladwyn, L.

Rea, L.

Graham of Edmonton, L.

Robson of Kiddington, B.

Grantchester, L.

Russell, E.

Gregson, L.

Seear, B.

Grey, E.

Sefton of Garston, L.

Grimond, L.

Serota, B.

Hamp: on, L.

Shackleton, L.

Harris of Greenwich, L.

Sherfield, L.

Hatch of Lusby, L.

Stallard, L.

Henderson of Brompton, L.

Stoddart of Swindon, L.

Hirshfield, L.

Strabolgi, L.

Hooson, L.

Taylor of Blackburn, L.

Houghton of Sowerby, L.

Thurlow, L.

Howie of Troon, L.

Tordoff, L. [Teller.]

Hughes, L.

Turner of Camden, B.

Irving of Lairg, L.

Underhill, L.

Jay, L,

Walston, L.

Jenkins of Hillhead, L.

Warnock, B.

John-Mackie, L.

Wedderburn of Charlton, L.

Kennet, L.

White, B.

Kilbracken, L.

Williams of Elvel, L.

Kirkhill, L.

Wilson of Rievaulx, L.

Kirkwood, L.

Winstanley, L.

Listowel, E.

Young of Dartington, L.

NOT-CONTENTS

Astor of Hever, L.

Hooper, B.

Balfour, E.

Johnston of Rockport, L.

Belstead, L.

Kimball, L.

Boardman, L.

Lindsey and Abingdon, E.

Borthwick, L.

Long, V.

Brougham and Vaux, L.

Lyell, L.

Butterworth, L.

McColl of Dulwich, L.

Caithness, E.

Mackay of Clashfern, L.

Carnegy of Lour, B.

Massereene and Ferrard, V.

Carnock, L.

Mersey, V.

Clanwilliam, E.

Mountevans, L.

Colnbrook, L.

Rankeillour, L.

Craigavon, V.

Reay, L.

Davidson, V. [Teller.]

Sanderson of Bowden, L.

Denham, L. [Teller.]

Skelmersdale, L.

Downshire, M.

Strange, B.

Eccles, V.

Strathclyde, L.

Elles, B.

Strathmore and Kinghorne, E.

Elliot of Harwood, B.

Elliott of Morpeth, L.

Swinton, E.

Fraser of Carmyllie, L.

Trefgarne, L.

Glenarthur, L.

Ullswater, V.

Goold, L.

Whitelaw, V.

Henley, L.

Wise, L.

Hesketh, L.

Wynford, L.

Hives, L.

Young, B.

Resolved in the affirmative, and amendment agreed to accordingly.
9.30 p.m.
Lord Peston Lord Peston moved Amendment No. 28:
Page 3, line 40, at end insert:
(" (1A) The Secretary of State shall by regulations made under sub-paragraph (1) (c) above provide for deferment of liability in respect of any person whose annual earnings do not exceed 85 per cent. of the average earnings in any year having taken into account the disregards under Schedule 3, Part 1.1 and Schedule 3, Part 2.6 (calculation of students and parents income) of the Education (Mandatory Awards) Regulations 1989.").
The noble Lord said: My Lords, the amendment concerns a matter raised by many noble Lords and enables the Government and the Opposition to place on record what they feel about the matter.
Essentially the Government argued that the criterion for deferment of liability should be a fraction of average earnings. We had an opportunity to look at fractions and also ask ourselves about average earnings and what they mean. However, the Government particularly set their heart against some of us in not being willing to modify the average earnings criterion in ways which are not unusual when we consider student support and matters of that kind. As I understand it— and I am always probing— they are not willing to accept any concept of disregards or what might be called normalisation.
That is a slight exaggeration. There are certain categories of students which the Government look at slightly differently— a subject which arose when we discussed social security. However, I argued that students, when they graduate, may have this or that kind of responsibility, which means that merely looking at average earnings is not satisfactory. I have particularly drawn the attention of noble Lords— I am not the only one— to the responsibility that married students acquire soon after graduation. It seemed to me that students could exceed 85 per cent. of average earnings— they could exceed average earnings— and still not be well off; they could still be in financial difficulties.
The purpose of Amendment No. 28, tabled in my name and the name of the noble Baroness, Lady Seear, is to say how surprising it is that the Government, in setting up the loans scheme, did not automatically introduce a whole series of disregards, with which they have some experience. A possible answer is that it might complicate the scheme. However, referring to remarks I made on Second Reading— remarks which I stick to— I fully accept that a proper system of student support must be complicated. If one takes the line that the whole thing must be incredibly simple, one will end up with a ludicrous scheme, which is what this is.
I table this amendment yet again as a last attempt to persuade the Government to consider the Tightness of some of their critics. These are not criticisms of the loans scheme per se, or even this loans scheme in a general way; it is a very strong criticism of a specific aspect of the scheme in which it is deficient.
Baroness Blatch: My Lords, the sections of the mandatory awards regulations to which this amendment refers have been established solely in order to assess income for the purposes of providing

671
students with mandatory awards. They are wholly inappropriate for the purpose of assessing eligibility to repay a loan.
In establishing the loans scheme we shall introduce in regulations the definition of gross income that a graduate will be required to declare. Your Lordships will be able to debate that definition when the regulations come before this House under the affirmative resolution procedure.
We shall be assessing gross income for a very good reason: we already have a system that takes account of individual circumstances— that is, the income tax system. It would be inappropriate for the loans scheme also to provide for individual circumstances as that would be to double count those circumstances. Why, for example, should a graduate with a mortgage be given two forms of relief— in respect of income tax and loan repayments— when a non-graduate with a mortgage has only one?
We have already announced that special provision will be made for disabled graduates. Any disability-related benefits will be ignored when assessing income for deferment purposes. That shows the flexibility that the Bill allows.
As I have repeatedly assured your Lordships, we shall be monitoring the scheme closely. If we find that special provision is needed in respect of graduates' income assessment, we shall be able to introduce this in regulations. However, we should not fix on the face of the Bill this link to income assessment for mandatory awards purposes.
In the light of that answer, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Peston: My Lords, in responding to my amendment, the noble Baroness asked what I thought was a very important question. I do not want to delay the House, but I believe that she has put her finger on the point.
I can remember when I was only a graduate and newly married— for all I know I was being paid average earnings— I had a mortgage and I felt indescribably poor. My view is that graduates in exactly the position outlined by the noble Baroness will feel very poor indeed. Your Lordships must not forget that we are not discussing other amendments removing liability for loan, but the criteria for postponement of repayments.
I should be interested to hear the noble Baroness argue her case to young people because they are, more or less, under great financial pressure when newly graduated. They take out mortgages. My whole point is that to add the need to repay loans is precisely the type of pressure that the Government should not be putting on them.
I reiterate that I am not on this occasion suggesting that we should forget the loan element or cancel it. I am simply saying that in this case a sensible government would be willing to postpone it. The noble Baroness has made my point for me; but this is the Government's Bill. They have to live with it and persuade people that what they are doing is right and fair. In answering my amendment, the noble Baroness has brought out how wrong and unfair the
672
Bill is. However, having made that point, which was exactly my purpose, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Blackstone Baroness Blackstone moved Amendment No. 29:
Page 3, line 40, at end insert—
(" (1A) The Secretary of State shall by regulations make provision to cancel the liabilities of student nurses as may be designated by the Secretary of State from time to time in consultation with relevant bodies.").
The noble Baroness said: This amendment is directed towards endeavouring to make sure that we retain an adequate number of graduate nurses in the profession. There is little doubt that historical trends coupled with demographic trends in the population of the United Kingdom, especially the dramatic increase in the number of elderly people, mean that we will need more qualified nursing posts, and that the number of such posts will be rising in the NHS over the next decade.
This increase in posts will occur over the same period as the DES predicts that there will be 26 per cent. fewer young people in the qualification group for entry to nurse training who are leaving school during the next five years or so. To put this another way, we now have the well known problem of the demographic time bomb— a phrase which first surfaced in the health care sector to describe some of the current difficulties of recruitment and retention faced by the NHS, especially in the area of nursing.
The statutory body governing the nursing profession, the United Kingdom Central Council for Nursing Midwifery and Health Visiting, has attempted to square this circle by developing Project 2000, which is a three-year college-based system which the Government have agreed should eventually replace the current National Health Service waged apprenticeship model of nurse training leading to registered general nurse status. Project 2000 has received government support and its implementation began last year.
As regards recruitment into nursing, Project 2000 aims to increase the proportion of traditionally-qualified female school-leavers entering nursing as well as trying to increase the participation for mature students and returners to nursing. The Government have also agreed a very sensible and coherent set of educational developments which are needed to underpin this strategy. These entail college-based teaching methods, student financial support through Department of Health bursaries and the progression slowly towards an all-graduate teacher education workforce for nursing through an increase in the number of undergraduate nursing degrees.
It is at this point that the introduction of student loans may jeopardise the Government's sensible strategy to try to ensure that we have an adequate level of entry to the nursing profession. There will be very little incentive within the target group of school-leavers to opt for a degree course burdened with a loan if nursing qualifications can be gained via a bursary-supported Project 2000 course. In addition, newly qualified graduate registered general nurses earn less than the national average graduate salary and they are unable to bid up their salaries

673
within the NHS as they are not considered part of the current clinical grading structure.
The Secretary of State for Health supports an expansion in degree opportunities for nurses, midwives and health visitors. He has agreed to a 50 per cent. expansion of undergraduate nursing degree places: that has been agreed with the Universities Funding Council. He has also agreed to priority being given to this form of provision within the Polytechnics and Colleges Funding Council. Nursing student maintenance will be by a non-means-tested bursary controlled by the Department of Health. The levels were announced by the Secretary of State for Health last June. Those under 26 years of age in London will receive £ 4,700 a year and those outside London, £ 4,000 a year. Current student nurses' salaries start rather higher at £ 5,950 in London and £ 5,150 outside.
Project 2000 nursing students will get seven weeks' holiday; they will not be liable for income tax, national insurance or superannuation contributions and they will pay only 20 per cent. poll tax. The introduction of student loans for nursing undergraduates will surely destabilise the inter-connected strategy that has been rather carefully put together. Pushing undergraduate nurses into the loan scheme will act as a disincentive because potential nursing undergraduates will either opt for the bursary-supported Project 2000 course which I have just described or they will choose another degree-based caring profession altogether.
Research has also shown that graduate nurses have a lower drop-out rate compared to traditional nursing entrants. Once qualified they stay in clinical areas of work. If we are to finish up with fewer graduate nurses than was intended, in the long term that can only harm the development of good patient care. It will also mean that university and polytechnic departments will become smaller as fewer candidates opt for nursing degrees. That means that the important research that now takes place into nursing in universities and to some extent in the polytechnics will be threatened.
The very carefully built-up links between schools of nursing and the higher education sector will also be jeopardised. If this professionally essential extension into nursing theory and research to meet the health care challenges of the late 1990s and beyond is not developed or is going to wither within the higher education sector, it will not then be passed on into the generality of Project 2000 nurse education, thereby defeating the whole objective of the Project 2000 scheme.
I conclude by mentioning a study undertaken by the Royal College of Nursing. Of the two-thirds of United Kingdom professors of nursing who responded to the survey none supported the student loans scheme. They felt that it would push students away from nursing degrees and towards the Project 2000 courses which carry bursaries with them. If our sick, our injured and our very old are to be cared for properly we must recruit more nurses with graduate qualifications who can act as leaders of the profession. Many of the experts believe that loans will prevent this. Nurses need to be treated as a special case and should be excluded from the
674
repayment of loans. I hope that the Government are able to accept this special case. I beg to move.
9.45 p.m.
Baroness Blatch: My Lords, we are well aware of the fears that prompt this amendment. There is concern that graduates will not wish to enter low paid professions if they have loans to repay. But noble Lords are aware that there will be a generous income threshold of 85 per cent. of national average income— or some £ 11,500 a year in today's circumstances— below which graduates will be able to defer repayments.
Noble Lords are also aware that the size of annual repayments will be about £ 400 a year. We have announced today that the repayment period will initially be seven years for graduates who borrow for more than four years. For other graduates the repayment period will initially be five years. As the maximum loan increases in real terms the repayment period will be extended so that repayments remain manageable. We have emphasised this point over and over again in debates. The repayment conditions will protect those on low incomes.
The repayment provisions will be set in regulations. Your Lordships will be able to debate those regulations which establish the scheme under affirmative resolution. We do not think it right to make exceptions in the Bill to this repayment regime for particular occupational groups. We are in no position to know that exceptions are needed; or even, if they are, which groups should benefit, or what form this exception should take. The only way to make responsible provision is through regulations, and after careful monitoring of the effect of the scheme. I repeat once more the assurance that the scheme will be closely monitored, and that if the concerns expressed by this amendment are borne out, we shall be able through regulation to act swiftly and effectively.
The noble Baroness referred specifically to nurses. Undergraduate nurses will be eligible for loans like other students in full-time higher education. Future arrangements for the support of all nursing students need to be considered in the light of the Department of Health White Paper Working for Patients and Working Paper 10 which was published in October 1989, and covers the education and training implications of reforms. The Government are currently considering responses received.
As I made clear in the debate in Committee, nurses taking Project 2000 courses are supported by a bursary from the Department of Health and do not receive student support from the education system. These bursaries will be paid at a higher rate than student grants. That is an important point to make in the context of this amendment. People following this training will not be eligible for the student loan any more than they are for the grant.
Trainee nurses follow a similar pattern of training to apprentices and other industrial trainees. It would be anomalous to award trainee nurses the student relief and not to treat other trainees in the same way. The cost of giving student relief to all these groups would be great, increasing the community charge payments for everyone else. It is difficult to single

675
out student nurses when in financial terms large numbers of young people are in a similar position. I understand the feelings behind the amendment but I hope that in the light of my answer the noble Baroness will feel able to withdraw the amendment.
Baroness Blackstone: My Lords, I am grateful to the noble Baroness for her reply. She made a good deal of the issue of deferment as she has done throughout our debates. But that is not the point. I am fully aware that nurses who are below the threshold for the purposes of the Bill will not have to repay their loans immediately.
However, the point which lies behind the amendment is that in the case of the nursing profession there are various routes towards becoming qualified and trained. One route is to become a graduate. That is a route which is now regarded as one which we should encourage some young men and women to take, otherwise we shall not have the high quality and highly trained people that we need to lead the profession.
The noble Baroness also concentrated a good deal on the point about bursaries being paid at a higher rate. That is exactly the issue to which I am trying to draw attention. It is because bursaries are to be paid at a higher rate than student maintenance grants plus loans that we have a disincentive to young people who decide to enter the nursing profession as regards following the degree route. That is the problem. However, I am glad to hear the assurance that this problem will be monitored and that there is some understanding of the anxieties that lie behind the proposal. I look forward to seeing what the Government bring forward when we debate the regulations on such matters. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 30 not moved.]
Lord Addington Lord Addington moved Amendment No. 31:
Page 4, line 3, leave out ("day to day") and insert ("six months after completion of the relevant course or courses").
The noble Lord said: My Lords, I should like to move this amendment, which stands in my name and that of the noble Lord, Lord Peston. It is a simple amendment which is basically designed to take into account the period when someone graduates. At such a time a person finds that he has to change his entire lifestyle. That can involve moving into a work situation and moving away from being based for at least part of the time in the parental home. The situation invariably leads to additional costs which certainly in the case of a male graduate who takes an average senior job will mean a change of clothing— for example, two new suits— and perhaps the purchase of a motor car. The result will be that his expenditure rises, despite the fact that he starts on what is not normally a high salary. In such a situation he finds himself in a financial squeeze. Moreover, he may also have incurred additional debts— usually from a bank— which he must also settle during this period. All this additional expenditure will arise during the
676
first two months of his working life. Therefore, I think that the breathing space suggested in the amendment would be highly desirable.
It must be remembered that, even with the provision of this current loan and the grant increase, the grant increase will have already been swallowed up by inflation. Therefore there is not a great increase in the amount of funds available. Such a person will still be facing more expenditure in these few months in proportion to his income and he will probably continue to do so for several years until he purchases a house. I beg to move.
Baroness Blatch: My Lords, this amendment seeks to provide interest free loans during a student's period of study; or put another way, it is a loan with a negative rate of interest. At the end of the period of study, the amount left owing would in fact be less than the value of the amount borrowed at the beginning.
I explained in Committee how we intend to index loans and why we intend to do this. It is purely a matter of equity. We shall index the loans so that what is paid back to the taxpayer is equal in real terms to what was originally lent to the student. This will be achieved by adjusting any outstanding liability in line with prices generally. However, we shall not charge any positive interest over and above this.
If we were not to index the loan in this way during a student's period of study, the taxpayer would lose out as the value of the loan decreased in real terms. Thus the student would borrow more in real terms than he paid back.
There is no need to seek to provide special protection in this way for students. We shall not require a borrower to repay his loan until nine months after he has left his course. Then, if his income is low for any reason, he can defer repayment. So we will not require students to repay anything while they continue to study.
Also, this amendment would discriminate between students on courses of different length. Students on longer courses would find that the loans taken out in their first three years were free of interest, while the same loans taken out by their peers who had graduated from shorter courses would start to be indexed.
Under our proposal to index the loans in line with inflation from day one, everyone will be treated equally. The taxpayer would receive in real terms the same sum as he had paid out. The borrower would pay back the same sum that he had borrowed in real terms. The liabilities of students on courses of different length would not be treated in different ways.
The indexation provisions will be settled in the regulations. They can be debated then. It is not appropriate to set the terms of the loan in primary legislation. The indexation that we are proposaing is the only fair way to proceed. I hope that, in the light of that explanation, the noble Lord will feel able to withdraw his amendment.
Lord Addington: My Lords, I am not totally happy with what the noble Baroness said, but she would not expect me to be. My main concern is about the initial period. I felt that after six months there would be a problem about people studying not paying interest on the amount of money they had borrowed.
Surely we are trying to give people a start to allow them to pay back from a base before they acquire any greater burden of debt than is necessary. Having listened to what the noble Baroness said, I beg to withdraw the amendement.
Amendment, by leave, withdrawn.
Lord Addington Lord Addington moved Amendment No. 32:
Page 4, line 6, at end insert:
(" (2A) For the purposes of sub-paragraph (2) (a) above, the Secretary of State shall specify such different amounts as appear to him to be appropriate having regard to regional variations in the housing costs of students.").
The noble Lord said: My Lords, this amendment brings us back to a subject on which we had quite a lively discussion in Committee. It is about the regional variations in costs. The reason why I linked housing costs to the original amendment was that they are subject to the greatest variation that a student faces. However it should be recognised that there are considerable variations by region in other items, such as groceries, transport and so on, and even entertainment. Thus even if the Government accept that, under the amendment which has just been agreed to, housing benefit should be retained, there will still be great variations in costs. During the years when I was at Aberdeen University a strong case was made that it was much more expensive to live in an oil boom town such as Aberdeen was at that time than in other parts of the country.
I shall be able to withdraw the amendment if the noble Earl agrees that the previous amendment on housing benefit will be accepted by the Government and incorporated into the Bill. That will mean that much of what I suggest has already been accepted by the Government. Thus I wait with great interest to hear what the noble Earl will say. Unless the previous amendment is accepted we must look for some other way of making up for the regional variation. On Committee I pointed out that anybody who paid over £ 35 per week in rent would lose in cash terms under the proposed system. I beg to move.
Lord Flowers: My Lords, I supported the noble Lord, Lord Addington, at the Committee stage. I still do so today, at least to the extent that, if a provision such as that in Amendment No. 27 does not go into the Bill, there must be some allowance for regional costs. I therefore wholeheartedly support the noble Lord, Lord Addington.
The Earl of Caithness: My Lords, it is difficult to answer the noble Lords, Lord Addington and Lord Flowers. The House decided to agree to one amendment which effectively nullifies this amendment. The cost to the taxpayer will be at least another £ 68 million. We shall have to look at the matter in the cold light of day and assess it. Taxpayers have today had another £ 68 million charged to their account, in addition to the increase in the access funds. It is all part of one equation which we shall need to examine.
10 p.m.
Lord Addington: My Lords, I suppose I should have expected that answer. We made a decision before that took into account the fact that housing benefit was the great equaliser throughout the system. However, I am rather disappointed that the noble Earl did not say that he had another scheme to put forward. I was under the impression that the
680
access funds had already been rather eaten up when I spoke to an earlier amendment about four-year courses. I wonder how much would be left of the access funds after they had been used to meet those courses where any extra hardship was incurred. However, in view of what the Minister has said and the situation in which I find myself of not wanting to contradict an earlier decision of the House, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Peston Lord Peston moved Amendment No. 33:
Page 4, line 10, at end insert:
(" (4) No student attending a course of supervision in connection with a postgraduate degree who is for any period of such study not in receipt of a loan payable in accordance with regulations made under sub-paragraph (I) above shall be ineligible for Housing Benefit during that period whether as a consequence of such regulations or of the provisions of or regulations made under this or any other enactment.").
The noble Lord said: My Lords, this amendment has already been spoken to. It was grouped with Amendment No. 27 which was carried. I beg to move.
The Deputy Speaker (Lord Alport): My Lords, the Question is that this amendment be agreed to.
The Earl of Caithness: My Lords, this amendment was spoken to with Amendment No. 27. It is not consequential on Amendment No. 27.
Lord Peston: My Lords, I do not understand what the noble Earl has just said. The amendments are grouped together.
Noble Lords: They are not consequential!
Lord Peston: My Lords, I nevertheless beg to move the amendment.
10.1 p.m.
The Deputy Speaker: My Lords, the Question is that Amendment No. 33 be agreed to. As many as are of that opinion say "Content". To the contrary "Not-Content". I think the "Contents" have it. Clear the Bar.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, Amendment No. 33: Tellers for the Not-Contents have not been appointed pursuant to Standing Order No. 51. A Division therefore cannot take place, and I declare that the Contents have it.
On Question, amendment agreed to.
Lord Henderson of Brompton Lord Henderson of Brompton moved Amendment No. 34:
Page 4, line 10, at end insert:
(" (4) Regulations made under this paragraph shall allow special conditions to be set in respect of repayment of loans for disabled students or graduates in comparison with loans to other students.").
The noble Lord said: My Lords, I have to start with two apologies in moving this amendment. The

681
first is on behalf of the noble Baroness, Lady Faithfull, whose name is down to the amendment. She is sorry that she cannot be here this evening. The second is on my own account in that I inadvertently handed in the name of the noble Viscount, Lord Addison, instead of the noble Lord, Lord Addington. I owe the noble Lord an apology for my sin of omission and the noble Viscount an apology for a sin of commission.
In Committee the noble Earl, Lord Caithness, made a statement on disabled people which was welcomed by the noble Baroness, Lady Darcy (de Knayth), but with some reservations, and also by myself. It was a distinctly good package and I may say that it is welcomed by the disability organisations. The noble Earl was good enough to see the noble Baroness, Lady Darcy (de Knayth), and myself in between the Committee stage and the Report stage and to listen to our reservations. Perhaps the most appropriate time for us to question him on those parts of our representations which do not require an amendment is on the Third Reading. They of course all relate to the Bill but they do not necessarily require amendment.
Just to remind the noble Earl and the House of those points, they refer to the need to dispense with the means test in respect of severely disabled people; the need for a specially dedicated access fund for disabled people, or something along those lines; and also lesser points about the disabled students' allowance, non-medical personal costs and the costs of technical equipment.
The amendment is necessary. Its purpose can be achieved only by amendment to the Bill. It seeks to empower the Government to determine a lower interest rate for the loan debts of disabled students, thereby rendering the sum that they will have to repay rather less than it would be otherwise.
Perhaps I may give the reasons for asking for that concession. First, disabled students will build up a greater initial loan than non-disabled students because they may, and frequently do, have to take four years over their degree course instead of three. Equally important, they cannot obtain part-time work or vacation work like their peers who are not disabled. So the initial loan which must be repaid is, for both those reasons, likely to be greater.
Secondly, disabled graduates are unfortunately more likely to receive a lesser wage than those who are able-bodied. That is due to a number of matters, but, first, to the fact— this is borne out by the OPCS surveys— that disabled people are not as a general rule able to command the same market price for their labours as able-bodied people. Secondly, disabled people's costs of living are higher than those of able-bodied people. That is true even of those who are in receipt of mobility and attendance allowances. I can put the case succinctly by referring to the recent disabled income groups survey for 1990 which found that the extra expenditure incurred by severely disabled people is often as high as £ 86 per week.
The Parliamentary Under-Secretary of State for higher education said on Report in another place:
"We are looking carefully at the evidence submitted to us supporting the interests of those with disabilities to see whether
682
a case can be made for alternative provision for the repayment of loans".
The time has come for the Parliamentary Under-Secretary of State for higher education to speak the results of his deliberations through the mouth of the noble Earl, Lord Caithness.
Perhaps I may summarise what I consider to be an unanswerable case. The disabled student who later becomes the disabled graduate will need preferential treatment for the repayment of loans on three simple grounds: first, that he incurs a higher loan debt; secondly, that he has increased costs in later life due to his disability; and, thirdly, that he is most likely to have a lower income than the average graduate in later life. Those three factors make a compelling case for a special repayment loan scheme for disabled students. That is what the amendment provides for. The number of students concerned is not great and the costs would be quite small. I beg to move.
10.15 p.m.
Baroness Young: My Lords, before my noble friend rises to respond, I should like to clarify various points because we all have very great sympathy with the disabled. My understanding of the Bill is that disabled students will be in a very special category. As we have had explained on an earlier amendment, the social security benefits will apply to them including the special disability allowance, attendance allowance and housing benefit. All those other benefits will continue to apply to them, unlike other students.
When my noble friend comes to respond, it would be very helpful to be clear about the difference in help for the disabled— which is very important— and the basic student loan arrangements for those students who are fortunate enough not to have any disabilities at all.
Baroness David: My Lords, I should like to make one point, which I do not think was made by the noble Lord, Lord Henderson. I apologise if I did not hear him but there was rather a buzz of conversation at the beginning of his remarks. During the Committee stage of the Bill on 19th March the noble Earl, Lord Caithness, announced that income from disability benefits— that is, mobility and attendance allowances— would be disregarded for the purposes of assessing an individual's eligibility for deferment. But since those benefits had always previously been disregarded for tax purposes or for assessing other means tested benefits, that announcement did not constitute a concession. Nor did it address the problem of the lower disposable incomes and the higher likely loan debts of disabled students. I hope that that point will be taken into consideration.
I should like to support this amendment. I have put my name to it and I give it my wholehearted support.
Baroness Darcy (de Knayth): My Lords, although my name is not on the amendment, I too wholeheartedly support it. I should like to endorse what my noble friend Lord Henderson of Brompton said by way of thanks to the Minister for meeting us so speedily and for being so willing to listen and

683
discuss this matter with us earlier this week. On Third Reading I hope that he will be able to say something about monitoring the means tested disabled students' allowance and the state of play on the possibility of the fourth access fund.
Unfortunately, I agree with my noble friend Lord Henderson and the noble Baroness, Lady David, that the package that was announced in response to my noble friend's amendment, which was to offset the extra costs faced by disabled students for repayments of loans, was less satisfactory than his reply to my amendment. I agree with the noble Baroness, Lady David, that in fact mobility and attendance allowances never had been taken into account in assessing for tax purposes or for other means tested benefits.
I should like to make a few quick points about the extra costs of disabled life. Many disabled people do not receive mobility and attendance allowances but they still have very heavy extra costs. Those who receive those allowances still have extra heavy costs which are not covered by those benefits— costs such as heating, diet, clothes wearing out, and so on.
While mobility and attendance allowances are extremely useful, they do not fully cover many people's costs of mobility and care. A small example is that on the 1st April the higher rate of attendance allowance will be going up to £ 37–55 which will pay for about 10 hours of care each week. If it takes an hour to put a disabled person to bed and an hour to get him up, it means that he may get up seven days a week but can then be put to bed for only three days each week.
I feel that this question of extra costs for disabled life is crucial. My noble friend explained clearly the likelihood that the disabled person would have a higher loan and lower income from which to pay back that loan. But most crucial are the extra costs of disabled life. Even when a disabled person receives the same wage as his able-bodied counterpart, there is still less disposable income from which to repay the loan. I hope that the Minister will listen, reconsider this proposal and have second thoughts about it. It may be that he already has done so and he has something up his sleeve. We need some more positive response to this amendment, which I warmly support.
Lord Addington: My Lords, I should briefly like to support these amendments. It is very important that we set out that disabled students should not in any way be held back by disability. All help should be given to them so that they have as good a chance as their fully able-bodied companions. Their chances of passing the courses should be exactly the same and only their academic ability should restrict them.
I am quite prepared to forgive the noble Lord, Lord Henderson, for misspelling my name on the Marshalled List. I thank him for promoting me.
The Earl of Caithness: My Lords, we announced last week a very generous package of assistance for disabled people. The disabled students' allowance will be enhanced significantly, and we shall disregard disability-related benefits when assessing income for
684
the purpose of deferment. This amendment places a reference to special repayment provisions on the face of the Bill, but it does not require regulations to be made on the subject: it merely provides that the regulations shall allow special conditions to be set.
I can assure the House that the provision we announced will be included in regulations. But I do not think it would be right to insert a statutory requirement to the effect that those conditions could not be extended to any other borrowers. The amendment provides that the conditions enjoyed by disabled people must be special in comparison with those available to other borrowers. Surely the benefit to disabled people is not diminished if it is extended to other deserving cases. And surely it is a little selfish to attempt to preserve certain special repayment conditions only for disabled people.
I have to say therefore that the amendment appears to me to be excessive. There are noble Lords present who have argued in favour of special provision in respect of child care costs. The noble Baroness, Lady Blackstone, did so. Are they prepared to have the possibility of a disregard denied to recipients of child benefit? I do not mean to indicate that we are minded to make such provision at the moment. But if monitoring reveals a need, that will be one of the alternatives open to us.
To summarise, I repeat the package announced last week. We shall increase the general level of the disabled students' allowance by 30 per cent. In addition, we shall introduce additional allowances: £ 3,000 for specialist equipment during a course, and £ 4,000 for non-medical helpers. To meet the point made again tonight by the noble Lord, Lord Henderson of Brompton, to help disabled people with loan repayments, we shall disregard disability-related benefits in assessing the 85 per cent. threshold for deferment.
The noble Baronesses, Lady David and Lady Darcy (de Knayth), said that it is not assessed for tax benefit or means-tested allowance. We are talking about a loan which is neither means tested nor is it a tax. I therefore confirm that what we announced last week is a major concession. I hope that on reflection your Lordships will welcome wholeheartedly these measures as being a very major step forward for disabled people.
There was one benefit that I could not announce last week. It was the benefit that was announced on Tuesday, which was to increase the personal tax allowance for blind people by 100 per cent. from £ 540 to £ 1,080 with effect from 6th April. That is the fourth of the announcements for disabled people which I hope again will be welcomed.
The noble Baroness, Lady Darcy (de Knayth), asked about access funds. Following what was said at an earlier stage in the meeting that I had with the noble Baroness and the noble Lord, Lord Henderson of Brompton, we have given yet again further careful consideration to representations supporting a separate access fund for disabled people or a requirement that further and higher education institutions should earmark for disabled students part of their allocations from the existing funds. Despite that careful consideration, we remain unconvinced that either would be appropriate.

685
The institutions are best placed to determine how the access fund should be allocated to their students, and it would be wrong, as well as unnecessary, to fetter their discretion. I understand that no more than a few dozen students nationally might be expected to claim from a separate access fund for the disabled if one existed. It would be clear to institutions that such students are eligible for access fund assistance, even though they retain entitlement to certain social security benefits. I understand that my right honourable friend would be willing to draw attention to this point in giving guidance to the administrators of the three proposed funds if that would be helpful.
For that reason we are not persuaded that there is a need for separate or earmarked access fund provision in the foreseeable future. However, if monitoring of the access fund reveals a problem at some later stage action may be taken to resolve it. The White Paper made it clear that the purpose and operation of the funds will be reviewed after three years. I hope that that meets the concerns of the noble Baroness, Lady Darcy (de Knayth), who wanted me to say a word about monitoring. I hope that I have also covered that.
Lord Henderson of Brompton: My Lords, there are at least two things for which I can thank the noble Earl. They came at the end of his speech. First, he said that he would consider issuing guidance to those who administer the funds so that they would give special regard to disabled people. That was a suggestion that the noble Baroness and I put to the noble Earl when we met. I am very glad that he has accepted it. I believe that it will be a help and I hope that he will see that such guidance is issued.
Secondly, I thank the noble Earl for his promise to monitor the operation of the various provisions which he announced in his package. That again is helpful.
On the other hand the noble Earl, who is usually felicitous in his use of language, was singularly inept when he described the amendment as selfish. It is no such thing. It may be that it is not very well worded and it would have been better not to have used the words:
"in comparison with loans to other students".
However, there is nothing selfish about the amendment whatever. It is not intended to give, nor would it have the effect of giving, any preference to disabled people over their peers. Quite the contrary. It would merely enable them to have the same status as their peers. They need the lesser amount to repay because they incur higher costs, as were detailed by the noble Baroness, because their incomes are lower.
I ask the noble Earl to talk to disabled people themselves. Perhaps he might talk to somebody who knows about academic life, like Dr. Stephen Hawkins. He was not disabled when he was a student but he is now, and he could tell the noble Earl what those increased costs are. To describe an amendment designed to help such people as selfish is at the very least inept and inappropriate. It will be resented by the organisations representing the disabled which
686
have helped to put the amendment forward. I hope that the noble Earl will retract that description or at least repent of it.
I shall not ask the House to divide on the amendment now. Perhaps, however, we could return to it at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness moved Amendment No. 35:
Page 4, line 13, leave out from first ("to") to ("loans") in line 15 and insert ("take such steps (whether by the issue of certificates or otherwise) as may be prescribed by the regulations for the purposes of, or in connection with, applications by those students for").
The noble Earl said: My Lords, in moving Amendment No. 35 I should like, with the leave of the House, to speak to Amendment Nos. 36, 44, 47, 48 and 54. The amendments deal with important matters. They relate to the role of the academic institutions in the student loans scheme. Amendment No. 35 gives my right honourable friend the power to require, by regulations, the academic institutions to assist in the certification and application process. Amendment No. 36 provides that the Secretary of State may require— again by regulations— the institutions to inform the Student Loans Company when a student ceases to be eligible for a loan. Your Lordships have already decided today that the regulations under those provisions should be subject to the affirmative procedure when first made. Amendment No. 54 is consequential and applies those requirements to institutions in Northern Ireland, so that they can certify the eligibility of students from Great Britain studying in Northern Ireland and receiving support under the scheme.
The final three amendments in the group are largely technical. They serve to clarify paragraph 3 of Schedule 2, but they have an important effect in placing limits on the role of the academic institutions in relation to the student loans scheme.
The two substantive amendments in the group are, at first sight, rather general. However, the power they give the Secretary of State is limited to the certification and application process, to the tasks associated with ensuring that students are able to obtain the additional resources to which they will be entitled. Moreover, it is the Government's firm intention that in practice the role of the academic institutions will be strictly limited. The document made available to Parliament last Thursday summarised that role. I should like to describe it in greater detail now.
Our aim is to ensure that loans reach eligible students with maximum speed and efficiency. We also seek to strike a balance between the work involved for the academic institutions, the responsibilities which will rightly fall to the individual student and proper protection for the very large sums of public money involved. I believe that the certification and application process which I shall describe meets those important objectives.
The role of the academic institution will be to identify students, certify students' eligibility for loans, certify the level of loan to which a student is

687
entitled and to hand forms to the student. Institutions will keep copies of documents for audit purposes and will inform the Student Loans Company if a student leaves a course prematurely. But the institutions will play no part in the application process. The student will apply for a loan through the post directly to the Student Loans Company. All further communication will be between the student and the company.
I shall go through the process step by step so that your Lordships may be clear exactly what is involved. First, the Student Loans Company will arrange for packs of eligibility and application forms to be sent to the academic institution. Those forms will be security printed and carbon copied so that the same details can be reproduced on different sections.
A student will approach his college office for certification of eligibility. The student will bring with him his birth certificate to establish his identity, his mandatory award letter, which in nearly all cases will establish his eligibility, and his bank account number to ensure that the loan will be paid into his account and no other.
The college office will check those details. The student will also provide other information to establish whether he is eligible for a loan and which rates applies. If all is present and correct, the college official will sign and stamp the eligibility form.
This is where the carbon-copying is important. The identity, eligibility and entitlement details will be reproduced on each copy of the block of forms. The next step is for the college to dismantle that block, keeping one copy of the details for audit purposes; sending one copy of the details to the company, and handing two copies, together with the application form, to the student. Other than informing the company if the student later leaves the course prematurely, the academic institution's role then ceases.
It is then for the student to fill in the application form and to send it, together with the eligibility details, to the Student Loans Company. It is for the Student Loans Company to match the details coming from the student with those coming from the academic institution and, if all is correct, to draw up a formal loan agreement.
That agreement is sent to the student, who signs it and returns it to the company. The company endorses the agreement and arranges for the loan to be paid to the student by the bankers automated clearing system.
This is, I believe, a sensible, cost-effective system. It limits the role of the academic institution to ensuring that those of its students who are eligible are in a position to apply for loans and that the loan will be paid into those students' bank accounts. By introducing a direct application process it places a proper responsibility on the student: the academic institution will not be involved. And by ensuring that details are checked when they reach the company from separate sources, the system guards against fraud and protects public money.
The education departments will be discussing the certification and application process with the
688
representatives of the higher education institutions. A meeting will take place shortly. The question of payment to the academic institutions to defray the costs of the work involved in the certification process will be on the agenda for that meeting.
During the summer term the Student Loans Company and the education departments will be organising a major information programme for the academic institutions. We shall work closely with the institutions at all stages. It is in our joint interests to ensure that students have swift and efficient access to additional resources this autumn.
Let me say a brief word about the final amendments in this group. They are to a large extent technical and their purpose is clarificatory. Paragraph 3 (1) refers to three procedures: the making of loans; the recovery of loans; and, thirdly, the discharging of other functions in relation to loans.
The provisions in paragraph 3 (2), 3 (5) and 3 (6) as presently drafted apply both to the body which makes and recovers loans and to the body or bodies which discharge other functions. Hence they could be interpreted as applying to the academic institutions. Those paragraphs deal with the provision of funds for the making of loans; the scrutiny of an independent person to resolve disputes; and the obligation to make periodical reports. We do not intend that the academic institution should make loans, be subject to the scrutiny of the independent person or make periodical reports to the Secretary of State. These amendments will ensure that the academic institutions are not subject to the provisions of those paragraphs. The amendments therefore have the effect of placing limits on the role of the academic institutions under the Bill.
These amendments bear upon the academic institutions; on the Student Loans Company and its relations with those institutions; and upon students and their access to loans. In designing the certification and application process, the objective has been to ensure that students' access to loans is as ready and efficient as is consistent with a limited role for the academic institutions and the proper protection of public money. We shall work very closely with the academic institutions in developing the details of the process in the coming months. The Student Loans Company and the academic institutions have a strong mutual interest in developing an effective working relationship which will be to the benefit of both students and the taxpayer. The amendments we have introduced today and the process I have described will lay the basis of that relationship. I invite your Lordships to accept the amendment and I beg to move.
Lord Adrian: My Lords, I spoke perhaps pre-emptively at Committee to an amendment which anticipated the amendments moved by the noble Earl. I said then that I hoped that the Secretary of State would consult with those whom he proposed to require to carry out the steps and the process of applications for loans before he promulgated the regulations mentioned in this amendment. I am therefore extremely grateful to the noble Earl for what he said, in that he outlined that there will be

689
meetings between officials of the Department of Education and Science and the universities. This was a point also asked for by my noble friend Lord Flowers.
Perhaps I may also hope that the Secretary of State will consider providing for the administrative costs involved, or at least making some contribution towards them. The Secretary of State will know how hard pressed financially universities are, and administration is not costless. If more is required of universities they will have to reduce expenditure on their other main activities— namely, teaching and research.
I speak with some feeling on this subject, having seen the administrative burden that the poll tax registration imposed on the Cambridge college of which at the moment I have the privilege to be Master and which, in the nature of the arrangements at Cambridge, will probably be one of the institutions required by the Secretary of State to take such steps as may be prescribed by the regulations which we anticipate.
Earl Russell: My Lords, I have no comments to make on the last four amendments in this group. However, I wonder whether Amendment No. 35 is necessary. I have looked again at the Bill, Schedule 2, paragraph 2(1), which states:
"The Secretary of State may by regulations require the governing bodies of institutions at which eligible students are attending courses to issue to them on request such certificates … "
I was always puzzled by the advance publicity in the press attached to this amendment. Having looked at the amendment and the Bill, I am still puzzled. On the other hand, I am extremely grateful to the noble Earl first for what he said about consultation and secondly for what he said on the question of consultation about payment. On both those subjects I agree with everything said by the noble Lord, Lord Adrian.
I am aware that the point has been made in another place that in 1962 local authorities were not paid for the work they did under the grants Act. On the other hand, 1962 in many ways, and particularly financially, was a different world. It was a world in which local authorities enjoyed an autonomous and unfettered power to raise revenue up to the limits which the electorate would take. In those circumstances it was perfectly reasonable not to pay the local authorities and if the universities had been asked to take on this type of job I do not consider that they would have asked for payment. It would not have been necessary.
We are now in a world in which money is very much tighter in all publicly-financed institutions than it was in 1962. We are in a world where a very small extra expenditure now cuts to the bone in a way that it did not then. Moreover, we have been constantly exhorted by this Government to take a more commercial attitude and absorb the lessons of the enterprise culture. Occasionally, if one is told such things over and over again, it comes back in forms which the original exhorters might not like. That has perhaps happened in this instance.
690
I am also deeply concerned— I hope this will be taken into account during the consultation which I am glad to note is to take place— that it may be too late for certification to be conducted for this academic year beginning in October. There is a great deal of force in the point made on Second Reading by the noble Baroness, Lady Blackstone, that that time of the year is a bottleneck in university registering. If there is one time in the academic year when there are no spare staff to redeploy it is the first week of the first term of the academic year when about 30 per cent. of the people are new, when everybody is lost and when everything needs to be sorted out from scratch. Additional staff will need to be taken on. Even so, there will be a great rush to get it done in time.
I ask the noble Earl for an assurance that, if it should emerge in the process of consultation that this work simply cannot be done in the time, the Government will consider whether their deadline is manageable. I had considered dividing the House on this amendment but having heard what has been said about consultation and about money I shall not do so. I am glad to hear about consultation and I look forward to its results.
Lord Beloff: My Lords, I briefly emphasise the points made by the noble Lord, Lord Adrian. Governments of all persuasions tend to underestimate the administrative costs of the policies they adopt. This is possible either when those who have to carry them out, as the noble Earl, Lord Russell, said, have the means of raising funds to do so, or when they apply to institutions which themselves are in an expansive mode; as was true of the academic world in the 1960s.
However, when we come to the present we must ask my noble friend the Minister whether, when he refers to arrangements with the universities— one is glad to know these consultations are to take place— he will take fully into account the fact that there is no spare cash and that an administrative burden will fall upon them. Of course, the access funds are an administrative burden and, as the noble Lord, Lord Adrian, said, the poll tax registration is an administrative burden. The present arrangements might be a considerable burden although I congratulate the noble Earl on producing what is probably the most suitable set of steps towards certification.
Let us suppose that the amount of money that the universities, polytechnics and colleges receive is less than the bare cost of administering these certifications, which would not only have to be processed accurately in the way described but would also, as the noble Earl, Lord Russell, pointed out, have to be prepared at great speed and at a difficult time. If the money is not available some other aspect of educational activity will have to be limited: for example, one certificator instead of one professor of chemistry. Therefore, I urge on my noble friend that the cost of administering the scheme is given full prominence in the Government's mind when these consultations take place.
10.45 p.m.
Lord Peston: My Lords, I join with those who have thanked the noble Earl for adding some reality to the scheme, which has looked rather theoretical until now. The noble Lord, Lord Beloff, may be right in suggesting that what is proposed is the simplest way of carrying out what is required, but from the description of it, it certainly sounds bureaucratic. There was a description given of pulling off the different bits of paper. I cannot remember how many there were on the carbon blocks.
I am not at all certain that the method proposed will be simple even if it is the simplest. I must not be too grudging, but I would have preferred that the consultation and the payment had been agreed to before the amendments were tabled. I understood the noble Earl to be saying that all these matters will be dealt with in a good and sympathetic spirit. I am willing to live with that for the time being.
I have one or two other questions. I thought that the business with loan applications would take place, particularly for a new student, before he got to university. I think the noble Earl was telling us that essentially it will take place after he has reached university. The student would arrive clutching various pieces of paper, the award letter and so forth, and he would go to someone in the registry and say "I have got my loan form. I need other things to go with it. I shall then make my application to the loan company". Am I right to think that I have completely misunderstood the point? I thought that students would be applying for loans when the Bill was passed. It now looks as though no one will be applying for a loan before October. I may simply have misunderstood what the noble Earl was telling us. I wish to know about that.
What are we to assume that the words "or otherwise" mean? I had assumed that the original role of the institution was simply to say, "This is a student who has been accepted here and he is now eligible to apply for a loan". At the time it seemed rather simple to me. Now I have seen those words, do they entail any kind of slippery slope? What are those words there for?
The noble Earl referred to Amendment No. 36 as essentially applying to students who leave prematurely. Even if these amendments do not say so, is it not the case that the academic institutions would also be obliged to issue a statement at the end to the effect that the students have completed their courses? Alternatively, will it be the individual student who has that obligation? Will he have to inform the loan company that he has changed status from being someone who has borrowed money to someone who is about to be in the position of having to repay it? I should like to have some clarification on,
"ceases to be an eligible student".
I had assumed that it meant partly what the noble Earl had said— that the student had left early. I had also assumed that it meant that the student had graduated. Can the noble Earl tell us about that? The last point has been made before. I appreciate that once the Government go down this line they cannot backtrack upon it.
692
These are thin-end-of-the-wedge amendments. I pointed out at Second Reading that these amendments tell academic institutions what they have to do, whether they like it or not. This is undoubtedly an infringement of academic independence. I add the point, as the question was raised about local authorities not originally being paid for mandatory grants, that there is a slight difference. I imagine that when mandatory grants were introduced local authorities were on the whole in favour of them. The whole point about the loans scheme is that we still cannot find anyone who is in ! favour of them. No academic institution is in favour of them and therefore academic institutions will be doing this with the heaviest of heavy hearts.
As a firm believer in the law I have to say that if the amendments are passed I hope that my academic colleagues will go ahead and do the best they can in the circumstances. But the Government should realise— and this follows in the spirit of what the noble Lords, Lord Beloff and Lord Adrian, have said— that the institutions are being obliged to administer a scheme which they do not like and in which they will take part only because they are made to do it under protest. If the Government had thought about this before they started perhaps they would not have gone this far. But those are comments. My main purpose is to obtain answers to the questions I have raised because that would help not only noble Lords to understand the scheme but institutions outside to know what they are letting themselves in for.
The Earl of Caithness: My Lords, I am grateful for the welcome given to what I have said, albeit that the welcome of the noble Lord, Lord Peston, was grudging. I hope that it was helpful all the same. To have even grudging thanks from the noble Lord is something.
The noble Lord, Lord Adrian, and the noble Earl, Lord Russell, were particularly concerned about the costs which academic institutions will incur in the certification process. I have said that their role is limited but I have also acknowledged its importance. That is why, among other things, officials of the education departments will be meeting representatives of the academic institutions very shortly. They will discuss the certification process in detail. The meeting will be the start of a concerted campaign to provide information to the students. The question of payments will most certainly be on the agenda. We intend to work very closely indeed with the academic institutions. We have common interests— ensuring that students have access to the additional resources to which they are entitled.
The noble Earl, Lord Russell, asked about the need for Amendment No. 35. Perhaps I may clarify that for the noble Earl. Paragraph 2 of Schedule 2 refers to certificates only relating to eligibility. The system I have described involves the use of a form that is more than a certificate of eligibility. It doubles as an application form which is handed to the student by the college, and is not completed by the college. The Bill as drafted may cover that but for the avoidance of doubt the amendments cover the combined eligibility and application form. It is for

693
exactly that reason that the words "or otherwise" which concern the noble Lord, Lord Peston, are used.
With regard to the date on which loans become payable, the application must come after the student starts at college, before registration at the beginning of term. They are not yet students so they will have to get in there and be on a course before they are eligible for a loan. The noble Lord referred to the student who leaves in the middle of a course. He then asked about the student at the end of the course. That will be taken care of in the application form. When the student fills in the application form the length of the course will be on that application form. It will be automatically assumed that he will leave unless the Student Loans Company hears differently.
The point was made that this will cause a good deal of extra work for institutions. It is worthwhile reiterating one point which may have been lost sight of. We are offering a new amount of money. Students will have the grant as before. That grant is being uprated this year. The loan is on top. Therefore, we are not introducing a completely new scheme like the community charge in exchange for rates which a student has probably been paying; we are complementing an existing scheme. Thus I think that the extra work about which some of your Lordships are concerned is not so great as feared if looked at in that light.
Baroness David: My Lords, before the noble Earl sits down, perhaps I may put one or two questions to him. He said that what is proposed is not an entirely new idea, but of course the grants are being dealt with by the local authorities. Therefore the loans scheme is new to the institutions. I was also rather alarmed when he said that a student would be able to apply for a loan when he got to his college or university. When will he actually receive the money?
The Earl of Caithness: My Lords, the student will receive the money as soon as the process is completed. In this respect I was grateful for the words of my noble friend Lord Beloff. The simplest and best scheme is to ensure that the student receives the money as soon as possible. However, it is only right— and we are talking about taxpayers' money— that the student should be on a registered course and that he should be an eligible student in the eyes of the university or the college. The process can then go forward fairly speedily.
Lord Flowers: My Lords, before the noble Earl finally sits down perhaps I may ask him to clarify a point that he made which I did not understand. He said that the top-up scheme is only an addition to what the student already receives and that therefore the cost of administration will not be very great. The cost of administration is exactly the same whether the students receive £ 400, £ 4,000 or £ 40,000. Surely the amount of administration involved is the same.
The Earl of Caithness: My Lords, I am sorry if I did not make myself clear on that point. If I
694
understood the debate correctly, a comparison was being made with the community charge. I said that because the grant scheme is up and running and will be uprated this year, the loan is in fact a top-up loan— certainly to begin with— for students. I admit to the noble Lord, Lord Flowers, that there is extra administration involved. That is exactly what we have sought to limit to a reasonable level for the institutions. Exactly how it will work and what it will cost are matters that we shall be seeking to discuss with the institutions.
Baroness Seear: My Lords, no one wishes to extend the debate too long, but the noble Baroness, Lady David, has raised a very practical point. I ask the noble Earl to look at the matter very carefully. At present as soon as students know their A-level results the local authorities are informed. But that is in the middle of August. Even then the students do not receive their money until six weeks into term. That can be jolly awkward for a student studying for the first year at a university away from home and so on.
If the company is not going to hear from all these students until they have started their courses, I do not see how it has a hope of getting the money to them until the first term is very nearly over. It is awfully difficult for students to manage for as long as that without any money coming through. It is not a political point; it is an administrative point. I know from experience that it is awful for students because local authorities can be very bad at getting the money through. It is very difficult for students who do not have any resources behind them. Can the Government look into the matter to see what the timing will be in this respect?
The Earl of Caithness: My Lords, of course I shall look into the matter. The noble Baroness is talking about two different aspects: one is the grant and the other is the loan. I would hope that the Student Loan Company, being a commercially orientated company, would seek to get the loan dealt with as soon as possible.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 36:
Page 4, line 15, at end insert—
("including the provision of information when a person ceases to be an eligible student.").
On Question, amendment agreed to.
The Deputy Speaker (Lord Ampthill): My Lords, before calling Amendment No. 37, I should remind the House that, if it is agreed to, I cannot call Amendment No. 38.
Baroness David Baroness David moved Amendment No. 37:
Page 4, line 24, leave out ("arrangements may") and insert ("Student Loans Company Ltd. shall").
The noble Baroness said: My Lords, the purpose of this amendment is to insert the Student Loans Company on to the face of the Bill. At present the Bill makes no reference to the company despite the fact that the Government have said that it is their intention that the SLC should administer the student loans scheme. Until today we have received very

695
little knowledge about the company and how it is going to work. I thank the noble Earl for his letter, which I received just as I came into the Chamber today and which tells us a little more about the company. It seems to me that we now know that the current chairman is Mr. John Vereker, deputy secretary at the DES, with Mr. Tom Jeffery, assistant secretary at the DES, becoming a director, as has Mr. Alistair Weatherston of the Scottish Education Department. Mr. Ronald Harrison has been appointed managing director at a salary of £ 55,000. I think he has a car too. I am not sure what he needs that for.
So far very few details on the running of the company have emerged. It has leased premises in Glasgow which are still apparently empty and it has been negotiating contracts for the provision of computer equipment. Much of the detail of the preparatory work is only now emerging. What is clear is that there will be a huge rush for the company to be on schedule to deliver arrangements for the first loan cheques to go out in September. We now know that they will not go out in September. They are more likely to go out in October, or maybe even later.
The Price Waterhouse report set out a series of timings for arrangements to be in place and most of them have been exceeded. The key one is that the loans administration should have had premises, staff and computer systems up and running by now. At present the company seems to have only five staff out of the 130 that it has stated it needs. The recent announcement last Thursday on the details of the application and certification process shows the difficulties that remain to be overcome in getting the loans scheme up and running for the September start.
I have tables based on the Parliamentary Answer by Mr John MacGregor given on 22nd March. On the loan application process, the institution will have to go through 12 processes from when it receives the application form to when it monitors the student throughout the year. There are nine processes for the student to go through, from collecting all the details of eligibility to finally returning the agreement to the SLC. Then there are eight processes for the Student Loans Company to go through between issuing the forms and authorising the payment.
Assuming that to interview a student, check his details and pass on the form will take approximately 15 minutes per applicant, and given that a college with 8,000 students applies for loans, one staff member working a seven-hour day will take 286 days to process all the applications. If all the applications are processed in the first month of term, which is desirable, 20 working days are available; 14 staff working full-time for a month would be required to process applications in an institution with 8,000 eligible students. The matter of administration, which was raised by various noble Lords, seems to be of some importance. I very much hope that the noble Baroness can give a little further enlightenment and explanation of how this will work. I beg to move.
11 p.m.
Baroness Blatch: My Lords, Amendments Nos. 37, 40, 43 and 46 were debated and subsequently withdrawn by the noble Baroness, Lady David, at Committee stage. Amendment No. 41 was tabled but not subsequently moved at Committee stage by the noble Lords, Lord Peston and Lord Addington. The effect of the amendment of the noble Baroness, Lady David, would be to confine the administration of the student loans scheme to a body called the Student Loans Company while removing any element of administrative discretion which the company might enjoy. The effect of the amendment of the noble Lord, Lord Peston, would be to ensure that the Government will always retain ownership of and control over the person or body having responsibility for the administration of the loans scheme.
Baroness David: My Lords, perhaps I may intervene for a moment. We said that we did not want Amendment No. 41 to be grouped with these amendments; it does not go with them. Perhaps it would be better if it were dealt with separately.
Baroness Blatch: My Lords, I thank the noble Baroness for that point. I shall disregard Amendment No. 41.
I do not believe that the amendments of the noble Baroness would be an appropriate measure. If I may say so, I do not believe that they would achieve the effect that the noble Baroness intends. It is the Government's intention that, subject to the passage of this Bill, the scheme will be administered by a body known as the Student Loans Company. It is the Government's intention that the company should observe the best commercial practice and operate with the maximum efficiency and cost-effectiveness. The Government will monitor the company's performance very closely.
It is not however appropriate that the name of the organisation which administers the scheme should appear on the face of the Bill. Should the Government conclude that the scheme could be administered more efficiently by other means, by an organisation bearing another name, the Government should be able to take the appropriate steps without resort to primary legislation. They would take those steps in the interest of students and the taxpayer. It would not be right for the Government to have to wait until legislation could be enacted to effect the change. Moreover, the amendments would not, as I believe the noble Baroness intends, prevent a change in ownership of the Student Loans Company. They would prevent only a change of name.
The Government's priority, and the Student Loans Company's priority, is to ensure that additional resources are available to students this autumn. The Government's objective, and the Student Loans Company's objective, is to establish a cost-effective, efficient student loans scheme. Later, a change of ownership may be appropriate. The critical criteria will be value for money for the taxpayer and, more significantly, benefit for the student. The amendments before us would not prevent such a change of ownership.

697
I do not think it would be right either to ensure that the student loans scheme should be administered in perpetuity by a body known as the Student Loans Company— that is the effect of the amendments— or to insist that such a company should always remain in Government ownership, which is, I believe, the intension of the amendments. At present all the shares in the Student Loans Company are owned by the Government. The company is making excellent progress on preparatory work towards the launch of the loans scheme this autumn.
It would be quite wrong to provide in primary legislation that the arrangements which will secure immediate objectives should be those that operate for all time. The Government have an open mind as to the long-term future of the Student Loans Company. As a Companies Act company and one which is in Government ownership, it will follow the best commercial practice. Its staff are not civil servants: they have been recruited on the basis of commercial and administrative experience. There is no reason in principle why the Government should retain a majority shareholding in perpetuity: this Government are interested in creating opportunities, not in closing doors.
The Government will monitor closely every aspect of the student loans scheme. They will monitor particularly carefully the efficiency of the Student Loans Company. The objective is now, and always will be, to ensure that support is available to students at a reasonable cost to the taxpayer. I am confident that the Government-owned Student Loans Company will secure that objective this autumn. But I cannot predict— no one can predict— how those objectives will best be secured as the loans scheme matures. In the future other means may be preferable. We should keep options open.
The noble Baroness, Lady David, listed in some considerable detail a speculative assessment of how, or whether, the Student Loans Company will meet the challenge of the requests that will flood in in the autumn. All I can say to that is that we have every confidence that the Student Loans Company will rise to that challenge. We shall have to wait to see what happens. I hope that we shall be proved right. In the light of that explanation, I hope that the noble Baroness will feel able to withdraw her amendments.
Baroness David: My Lords, I thank the noble Baroness for replying to the amendment. However, it seems to me odd, if the Government really have confidence that the company will work, that they cannot accept putting its name on the face of the Bill. It is odd that such an integral part of the whole scheme should not appear in the Bill at all. However, I shall read what the noble Baroness said and consider whether I shall need to return to this matter at the next and final stage of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 38 not moved.]
Baroness David Baroness David moved Amendment No. 39:
Page 4, line 24, after ("may") insert ("subject to sub-paragraph (1A) below").
The noble Baroness said: My Lords, This amendment is grouped with Amendment No. 42. Its purpose is to draw out past spending on the Student Loans Company, its future budget and the public spending implications. The Student Loans Company is a private company, although wholly owned by the Government. This amendment brings the Student Loans Company into line with other nationalised industries and requires financial reporting to Parliament.
The requirement to provide financial information would enable value-for-money judgments to be made. On 19th June 1989 Mr. Kenneth Baker announced that government funding would be provided for the company. The budget for the company was agreed by Parliament in a Treasury supplementary estimate in June. The sum agreed was £ 7–5 million.
Since then two DES senior civil servants, a deputy secretary and an assistant secretary, have become directors, and the third is to be appointed from the Scottish Department. Four more senior staff are being appointed; a business manager for the administration department, salary £ 27,000 to £ 32,000 a year; a central operations manager, salary £ 20,000 to £ 25,000; a communications manager, salary £ 15,000 to £ 20,000; and a liaison officer, salary £ 15,000 to £ 19,000. The post of managing director, £ 55,000 and a car.
The intention of this amendment is to ensure that Parliament receives a report setting out the expenditure which has already been made by the SLC up to the date on which the Bill receives Royal Assent; the expected budget of the company; and estimates of the total public expenditure to be incurred by the company as well as an estimate of when the Exchequer will expect to make a net saving from the introduction of student loans. I beg to move.
Earl Russell: My Lords, I should like to support these amendments. I shall not elaborate on the points that the noble Baroness made about the money that has already been spent. I agree with them. I will add only one small question to that about the managing director of the Student Loans Company. It struck me as curious that that post was advertised only in the Sunday Times and not in the Sunday Telegraph, the Observer, or the Sunday Correspondent. I wonder whether there is any reason for that?
My main concern about this is the question of the likely public expenditure effect of these proposals. As I think your Lordships know, I have some misgivings about that. It is vital to the logic of the justification of the scheme that it should in the end result in a saving of public money. But there is a large element of conjecture about when that end might be. One of the main purposes of a review, at least in my eyes, would be to try to bring the most accurate information possible to bear on those conjectures as soon as possible.
It is of course a scheme at a zero real rate of interest, which means that the amount of subsidy going into it will be equivalent to the inflation rate. The financial projections that we have been given

699
for this scheme are at an inflation rate of 3 per cent. That at present looks a little optimistic. If it were to remain optimistic I think the expense of the scheme is likely to be very much greater than was originally envisaged, and correspondingly the break-even point a great deal further off into the next century.
The other major conjecture on which the success of this scheme depends in public expenditure terms is the rate of recovery of loans. I am not going into all that again. We have debated it a good deal. However, it is important to say that the success or failure of the scheme in these terms will not become apparent for quite a long time. It will be some while before any substantial sum comes back into the Treasury.
Also there is another major point about the public expenditure projections. So far they have only been put before us in a form going up to 1995, and the administrative costs of the scheme were only discussed by Price Waterhouse up to that date. Of course as more repayments have to be collected more and more administrative work will have to go into the process of repayment. Therefore the cost of securing the repayment is likely to increase. I think the administrative costs of the scheme are likely to be a good deal greater in 2005 than in 1995. That is a question that I hope the review will address.
This is not just a question of niggling. We on the Liberal Democrat Benches are concerned about the responsible use of public money. We are also concerned about the ultimate justification of the scheme. So much of the justification has rested on the argument that we need an expansion; we cannot afford to pay for it, therefore we shall use a cheaper method. If it were to turn out to be an unjustified assumption that this is a cheaper method, the logic of the scheme would be undercut and a strong case for withdrawing it would begin to emerge.
I know from reviewing my own work that it is a painful process. One likes to think that one is right, so a review in which there was some assistance in coming to terms with such an unpalatable finding as this could be very much in the public interest.
11.15 p.m.
The Earl of Caithness: My Lords, Parliament is rightly interested both in the amount of money that will need to be made available to students each year and in the administrative costs of the Student Loans Company. We have already provided a great deal of information and a great many statistics relating to the scheme. Many of those have taken the form of estimates of costs. Much of the information sought by the noble Baroness and the noble Earl is already in the public domain.
I refer your Lordships in particular to a detailed written answer given on 18th December 1989 in another place (Commons Hansard cols. 36–40). It gave tables setting out the estimated loan outlay, loan repayments and PSBR effect to the nearest million pounds for the years 1990 to 2027 on a variety of assumptions about rate of take-up and inflation. From those tables such questions as the total cost of the loan facility up to a given year and the date by which there are current year or
700
cumulative savings to the Exchequer can be answered. We have not sought in any way to conceal the costs of making the loan facility available to students.
We have estimated the annual adminstrative costs of the Student Loans Company at £ 10 million to £ 20 million. I accept that some of your Lordships would have liked a more precise estimate earlier. We believe that we have been right to wait until we have a figure which we are sure will be accurate. My right honourable friend expects to announce more detailed figures shortly, once discussions have taken place with the representative bodies of higher education about, among other things, possible payments to the institutions to reflect their role in the scheme.
We have at all stages been open about the costs of the loans scheme. We have rightly avoided giving premature estimates of which we were uncertain. The figures that we have published are figures in which Parliament can be confident. We shall continue to publish details of estimated costs as they become available.
The noble Earl, Lord Russell, asked about the advertisement in the Sunday Times. I can assure him that the use of the Sunday Times is a matter of commercial judgment by the professional recruitment agency responsible for finding an appropriate field of candidates.
Baroness David: My Lords, I thank the noble Earl for his answer, but I am sorry that he will not agree to the statement in the way that we want it. I see what will happen: there will be a great many Written Questions teasing out the information bit by bit. It would have been much simpler if we could have had it as the amendment asks. However, I shall read Commons Hansard of 18th December and the noble Earl's comments and then consider whether there should be further action. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 40 to 43 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 44:
Page 4, line 28, leave out ("discharging functions") and insert ("having the function of making loans").
On Question, amendment agreed to.
[Amendments Nos. 45 and 46 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 47 and 48:
Page 4, line 43, leave out ("discharging functions") and insert ("having the function of making loans").
Page 4, line 45, leave out ("functions in relation to") and insert ("the function of making").
On Question, amendments agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 49:
Page 4, line 51, at end insert—
(" (8) No document sent in connection with loans under the arrangements by any such person or body as is mentioned in sub-paragraph (1) above shall be regarded as sent with a view to financial gain within the meaning of section 50 of the Consumer Credit Act 1974 (circulars to minors).")
The noble Earl said: My Lords, this is essentially a technical amendment, introduced for the avoidance of doubt. It has always been intended that minors will be eligible to receive student loans, provided that they satisfy the residence and course requirements that will apply to all students. It is also our intention that the student loans scheme should meet the requirements of the Consumer Credit Act.
An important aspect of the scheme will be the provision of full information to students and potential students. During the passage of the Bill in another place, great concern was expressed that students and potential students should know about the scheme when making decisions about their future. The provision of such information is clearly essential.
Section 50 of the Consumer Credit Act is an untested piece of law and is susceptible to a variety of interpretations. It prohibits the sending, with a view to financial gain— I stress, with a view to financial gain— of documents to minors inviting them to borrow money or to apply for information or advice on borrowing money. It could therefore affect the dissemination of information about the student loans scheme.
The words "with a view to financial gain", which I stressed a moment ago, are important. We do not believe that they should apply here. The Student Loans Company will not be operating "with a view to financial gain" out of the loans. Although it will recover money from borrowers in the form of repayments, this money will be returned to the Government on the same day that it is recovered. The Government will reimburse the company's administrative costs, but that is all.
The commonsense view is that the Student Loans Company will not, in sending out publicity material or loan agreement forms, be acting with a view to financial gain. However, in construing the term financial gain, the courts might look only at the relationship between the borrower and the company. If one does that, it is true that, in times of inflation, the company will be recovering in cash terms more than it has paid out, although in real terms (and I emphasise this point) graduates will repay only what they borrowed.
We considered the possibility of making loans to minors unindexed, but concluded that this was not the right way forward. The company might still be construed as acting with a view to financial gain if it sent information about the scheme to minors. This is because it would be giving the minor information about a scheme of support that would apply throughout his period of higher education. Although some students might qualify for an unindexed loan in their first year at college, a loan in their second year would be indexed, if by then they were aged 18. It could therefore be argued that the original information constituted an invitation to borrow money at interest.
Moreover, most students enter higher education at 18 or over, but will need information about student support and loans while still at school and before
702
they reach 18. Their loans will be indexed, but they will have received the information when minors.
Furthermore, it would not be right in this context to treat a student under 18 significantly more favourably than one who is already 18. Both will benefit from the same educational opportunities and receive the same lifetime advantages: both should therefore be subject to the same support arrangements.
As I said, the interpretation of Section 50 is uncertain. It was certainly never intended to catch lenders who are not only recovering in real terms merely what they borrowed, but are also returning all that they recover immediately to the Government. For the avoidance of doubt we believe that it is right to make clear on the face of the Bill that the company will not be acting with a view to financial gain. I commend the amendment to your Lordships. I beg to move.
Lord Peston: My Lords, I thank the noble Earl for his contribution. I am bound to say that I am in great difficulty as to how to contribute to the discussion of the amendment. Perhaps I should start by saying that, in so far as I understand the amendment at all, I simply cannot accept that it is a mere technical amendment.
As I said earlier today, it seems to me that it is an amendment of absolutely fundamental significance. I believe that, if noble Lords had known at Second Reading, let alone later, that they were involving themselves with the Consumer Credit Act 1974 as it affected minors, the whole of the debate on this Bill would have been quite different in tone. I shall come back to that in a moment. However, I must remind noble Lords that the amendment has not been seen by the other place and, so far as I know, it was unaware of its significance. I certainly had no idea until the matter was signalled to me by the Government whips that there was a consumer credit aspect to the Bill, or that there were problems connected with minors.
With reference to our discussion earlier before the day's business began, I do not suggest for one moment that noble Lords opposite have not tried to do the best they can to keep me and others informed in the circumstances. I have to underline the words "in the circumstances". For me, Thursday last was the first inkling that I had of the matter. They have done their best between then and now. But in my view their best is not and never could be satisfactory.
I shall say a word on the amendment in a moment. My other problem is that we are operating under the procedures of Report stage of the Bill. Earlier the noble Lord the Leader of the House had to admonish me and others for not remembering the rules. One of the key rules is that I can speak only once. This is my chance. I am not able to do all the interrogation, with the toing and froing that any amendment of this importance requires.
Secondly— I should have made the point earlier but it slipped my mind— it concerns me that because of the position of the amendment in the Marshalled List we are debating it at half past eleven at night. That is not the time to debate anything as important as I consider this matter.

703
Thirdly, we have the problem which applies not only to me but to all noble Lords who are interested in this subject, that it simply has not been possible for us to be briefed. I have found it impossible to become fully acquainted with what I need to know on this part of the Bill, having worked hard on all other parts of the Bill. I have sat here, as have other noble Lords, from approximately 3 p.m. I have had no chance to go away. I have hardly had a chance to reflect on the important words that the noble Lord the Leader of the House expressed on the Government's attitude. I have tried to reflect what that could mean. Perhaps we shall learn something more on that.
In considering the amendment my main concern is the sudden realisation that we are involving ourselves with the extension of credit to minors. I know little of the 1974 Act. I understand that it was an Act which had no party political element. I am advised that the Act was introduced originally by the government led by the noble Earl's right honourable friend, the Prime Minister, Mr Heath. The Bill was lost in the dissolution of his government and was largely reintroduced during the subsequent government of my noble friend Lord Wilson of Rievaulx. It had no political element. But I understand that one very important part of it that exercised minds at that time was the question of the relationship between consumer credit and minors. Therefore, I have to insist that this issue is not technical; it is extremely serious and not something that can possibly go through on the nod.
Perhaps I may refer to what little briefing I have received. The main piece of advice that I have been given is rather similar to that of the noble Earl: that the Consumer Credit Act 1974 is complex and difficult to interpret, in particular in this area. When I asked how it affected the Education (Student Loans) Bill I was broadly advised that that is not something that anyone could answer without a great deal of deep thought. It is therefore impossible to say whether the government amendments do the job that the noble Earl wishes them to do. It is impossible to say what the ramifications of the matter are for the Consumer Credit Act and related matters. Another point that immediately springs to mind is whether any other legislation is affected by or affects the issue.
In due course there may be answers to those questions. However, I have not the slightest idea now what they are. I have had no chance to take advice on the matter. I accept that the noble Earl has done his best to explain the matter. I have taken it in as best I can; but although I am not nearly asleep, I am certainly not at my best. The least I need now is to go away, understand what the noble Earl said and appreciate its significance. That is the least that all noble Lords need in order to respond to these matters.
What are we to do? I understand that the Government are very keen to put the Bill on the statute book, and that is why I found it so difficult to speak. However, there is another responsibility: the responsibility of your Lordships' House in scrutinising any piece of legislation. I do not say this
704
in a mean spirit, but the Government have to accept that they have only just come to appreciate the problem and have taken until Thursday to table the amendments. I do not impugn their honour. I fully accept that it has taken time to produce appropriate amendments. I understood the noble Earl to say that he is not entirely certain himself how the matter might develop.
In saying that, I must ask noble Lords opposite— and I address my remarks not only to the Earl but also to the noble Lord the Leader of the House— to be sympathetic to the problems of all noble Lords who wish to feel that they have made a proper contribution to the debates on the Bill.
My own view is that the Government must accept, first, that we need more time. We need time immediately to think about what the noble Earl has just said and whether we understand it and the consequences. Secondly, we need what I believe is called recommitment; namely, the opportunity to discuss the amendments in a rather less formal way than on Report. I do not see how that could be rushed so that it takes place by Thursday. As a consequence of introducing the amendments, the Government must accept that there will be some delay in the passage of the Bill through your Lordships' House. I do not say that with any happiness because I am as fed up with the Bill as anybody else.
The fact remains that this is not a trivial matter. The Government owes it to all of your Lordships to show some flexibility along the lines which the noble Lord the Leader of the House suggested. We need more time. We must not allow ourselves to be rushed.
Lord Jenkin of Roding: My Lords, I believe that the noble Lord, Lord Peston, is making very heavy weather of what is a relatively minor, technical amendment which has had to be put in ex abundanti cautelâ. Nobody for one moment could have dreamt that the words "for the purposes of gain" could have applied to the arrangements which this legislation embodies.
Perhaps the noble Lord will cast his mind back to the Consumer Credit Act and the very considerable body of new law which was brought in to protect consumers, and particularly to protect minors. He will know that the mischief that was aimed at was that of less than scrupulous traders of one kind or another— whether bankers, other lenders or retailers— seeking to take advantage of the inexperience of those under the age of 18 and landing them in debt which might cause them considerable hardship. It seems to me that this is a thousand miles from what we are discussing in this Bill. Quite frankly, I cannot understand why the noble Lord, Lord Peston, feels that this would have changed the entire character of the Second Reading and the whole attitude of your Lordships towards the conduct of debates on the Bill.
The one point of criticism which he and other noble Lords are perfectly entitled to make is that it is somewhat surprising that the officials in the Department of Trade and Industry who administered the consumer credit legislation did not draw this matter to the attention of Ministers at a

705
substantially earlier stage. They have every right to be cross with officials who have let them down in this way.
Having said that, the point my noble friend made was that common sense says that this matter should not come within the provisions of the Consumer Credit Act and one might reasonably take the view that that would be the decision of a court if called upon to adjudicate.
However, when legislating one has a duty to seek to remove avoidable doubts. If the Government's legal advisers said that there could be some doubt on this because the precise nature of the transactions— and no one is going to make a profit out of this because it is not a commercial venture and nor does it involve the mischief aimed at by the Consumer Credit Act— it seems that Ministers would be acting in derogation of their duty if they did not bring the matter to the attention of the House as soon as it had been brought to their attention and table the necessary amendment.
This is a necessary technicality. I do not believe that it carries with it the portentous consequences which the noble Lord, Lord Peston, has tried to persuade the House are embodied in this; namely, that the amendment changes the whole character of the legislation. Frankly, that seems to me absurd. I hope that the House will see that this is a common sense matter and will pass the amendment quickly.
Earl Russell: My Lords, I should like to express my sympathy with the Government for the predicament in which they have found themselves at such a late stage of the Bill. I can see that it is thoroughly upsetting and disturbing. They have done their best to get out of the situation.
However, it illustrates the point which we have made since Second Reading— that this Bill has gone forward with rather more haste than is wise. It also illustrates the point made by the noble Lord, Lord Peston since Second Reading— that here we are dealing with an inexperienced and vulnerable body of people. The maxim volenti non fit injuria has been invoked rather more freely than was altogether wise.
Also I am entirely without a background in consumer credit. Although I knew of the tabling of this amendment I also have another job and have not had the time for preparation which I should have liked. In particular, I have not been able to take expert advice on the matter.
By way of trying to probe the nature of the problem in which we find ourselves, I ask what would be the effect on the Bill were we not to have this amendment. I tried to wrestle with that problem while the noble Earl was speaking. As far as I can see, the key words are: "for purposes of financial gain". It seems to me that so long as the Student Loans Company is a non-profit-making organisation, the Bill— I hope I shall be corrected if I am wrong— could go ahead without this amendment and would not be harmed by that. If that is true, it helps to clarify the situation. It means that the absence of this amendment would serve to put a stop on proposals, for example, to privatise the company, in which case it would have to become a
706
non-profit-making organisation and, therefore, the Consumer Credit Act applies. It would put a stop to proposals to sell the mailing lists, but I understand that the noble Earl is to do that in any event by Amendment No. 51, to which I warmly look forward.
The specific problems that the Consumer Credit Act could bring to the Bill have mostly been avoided by government concession which was welcome. I wonder, therefore, why the Government need this amendment. If it is a non-profit-making company and wholly in the public sector, and I hope answerable to Parliament, could we not go ahead without the words,
"with a view to financial gain",
without adding this amendment?
Another problem has been drawn to my attention. I am out of my area in this matter and would welcome help in dealing with it. It is my understanding that when a loan is made to a minor there are problems concerning its recovery; the debtor is under no legal liability to discharge the indebtedness. That, I understand, is normally dealt with by having an indemnity from a third party which is designed to secure the lender.
We discussed the problems with regard to indemnity. I think that is why some people were afraid that the Official Referee would be used as a guarantor. I am glad to say that the noble Earl has twice assured us that that is not the case. However, it raises a problem. If the Student Loans Company makes a loan to a minor and the minor chooses to blow it on a holiday in Majorca, who will recover the money and from whom? Those are the sort of questions on which I should like an answer. If I receive a satisfactory answer I am prepared to let the Bill go ahead without the amendment— which may be unnecessary— or let the amendment go through. But I should like to understand where we are a little better than I do.
Baroness Young: My Lords, I agree with the remarks of my noble friend Lord Jenkin that we need to keep the amendment in proportion.
I sympathise with my noble friend Lord Caithness, but it is not the first time that an amendment has arisen late in the day in your Lordships' House. It happened in the past and I have not the slightest doubt that it will happen in the future; it is not an unusual event. However, it is perfectly arguable that that is one of the functions of the House of Lords. We have an opportunity to continue to amend Bills as they proceed through Parliament, and particularly your Lordships' House, where even at this stage debate continues and we have ample opportunity to consider matters. When something like this happens it is wrong to criticise it when, after all, that is a function of the House.
Turning to the amendment, I particularly agree with my noble friend Lord Jenkin because this is a technical amendment. We must all have accepted in the course of the debate, both in Committee and on Report, that the Bill applied to minors. We have not said specifically that 17 year-olds would be involved, but even if members of our own family did not start university at 17 we all know that a number of students do. Clearly, from what has been said a

707
larger proportion of 17 year-olds attend university in Scotland because of the school system and their four-year university course. This is not something new. We always knew that it would apply to minors. We also know that full information is to be given to students about the circumstances of the loan; we have just discussed that.
The noble Earl, Lord Russell, asked why the amendment was tabled and whether we need it at all. As I understand the point, the Consumer Credit Act makes it an offence to offer a loan to a minor with a view to financial gain. My noble friend Lord Jenkin explained the circumstances in which that could happen, and we can all imagine those circumstances. The whole point of the Student Loans Company is that it is not in that position. The circumstances are set out as to precisely what the loan is for. Nobody is touting for business and therefore enticing young people into an undesirable situation. If it is undesirable for them, it is undesirable also for older students. Clearly that is not the case.
The reason for bringing forward this amendment is to remove the element of doubt about the interpretation. That is important. I am not a lawyer but that is a point that constantly occurs and the amendment will remove that element of doubt in the Bill. It is right that it should be brought forward now.
Therefore, I support the amendment and it is right and proper that it should be included in the Bill. I can understand that my noble friends may feel irritated that it has come at this late stage, but that is not unknown and it is a function of this House to deal with such amendments. We should treat it as a technical amendment and deal with it in that sense.
11.45 p.m.
Lord Boardman: My Lords, I was involved in the principle of the Bill well before it came to the other place and this House. I strongly supported the principle of the benefits that it produces to students. I may not have agreed with all the practicalities that were suggested but I strongly supported the principle.
I believe passionately that it is right for the young to be given the additional opportunities provided by the Bill, so I believe it right that there should be no differentiation between those who are aged 17 and those who are aged 18. Therefore, not to accept the amendment could prejudice the increased opportunities for the young that I believe the Bill provides. I strongly support the amendment.
Lord Monkswell: My Lords, I should like to speak partly about the timing, partly about parliamentary procedure and partly about the text and implications of the amendment itself.
One of the problems facing us is the Government's apparent haste in pushing through this legislation. I have to admit that I took exception to the reference by the noble Lord, Lord Jenkin, to shoddy workmanship in the department. That is an unfortunate denigration of public servants. This afternoon and this evening I have been in consultation with the Clerk and his staff and I pay tribute to them for the information provided to me.
708
As I said, part of our problem is the short time that we have had to consider the amendment. I am sure that all sides of the House need more time to digest its implications and come forward with our considered views. However, one of the key problems is that because we are at the Report stage we cannot have an open debate. Specifically, no Member of the House can speak more than once. That is unfortunate. Dare I say that it is within the powers of the Government to have taken this amendment in Committee? I have been advised that that is possible. It is unfortunate that the Government have not seen fit to open out the debate.
Having said that, one of our problems since the amendment was tabled is that it is difficult to know what questions to ask and what the answers might produce in terms of further questions, and so on. Therefore, one of my pleas is that the Government should find some mechanism— they have the services of the Clerk and his staff as I have had— in which the Chamber can debate the amendment at a later time in the context of a Committee of the House rather than on Report or Third Reading. That would be very beneficial.
I hope that the noble Lord the Leader of the House will take that on board. It is important because of the role which your Lordships' House is seen to play in the parliamentary process, which is to give full parliamentary scrutiny through the various stages of the Bill. Effectively, we provide a service to the other place because, for procedural reasons, it seems incapable of scrutinising legislation as effectively as this House. We do no service to the wider institution of Parliament if we do not perform our task effectively in that respect.
I shall now touch on some of the implications of the amendment itself, bearing in mind that the first I heard of it was this afternoon. As an ordinary Back-Bench Member of your Lordships' House and like the vast majority of its Members, I have had only a few hours to consider the amendment, its implications, and what may result from considering it. There are three aspects. The first is the impact and the effect of the clause in Scotland. It is only in the past week or so that the Government have been subjected to a barrage of criticism because of their lack of consideration for the Scottish people.
Dare I say that this is yet another example of the unfortunate way in which the Government appear not to consider the situation in Scotland. It was quite reasonable for your Lordships' House, in prior deliberations on this Bill, to have thought that most students go to university at the age of 18, so credit for minors was not really a problem. In thinking that, which is the reality applicable to the majority of English and Welsh students, it does not apply in Scotland.
One of the interesting questions that we must pose to the Government is this: how many students in England, Wales and Scotland will be affected by the provision of offering credit to minors? The answer to that will be very salutary. No doubt Scottish Members of another place will be very interested in the answer to that question.
The second aspect that we need to consider is the economic problems that this country faces with the

709
explosion of credit over the past year or two. Here we are effectively promoting the concept that more credit: to students is a good thing. I am not sure that is the right message that we should be sending to minors in the context of today's economic situation.
The third aspect that I wish to raise in the context of credit is the activities of loan sharks. One of the interesting aspects of the Government's attitude to this Bill is that they consider credit to be of benefit. I am sure that there is a large section of the population which would consider a loan, whether enforced or not, to be a liability rather than an asset. The amendment highlights the problem as it applies to minors.
We need to take very careful notice of the implications of the amendment. As I have said, one of the difficulties with the type of debate that we are having on what is in effect a new subject in relation to this Bill is that I cannot sit down, wait for the Government to reply to some of the questions I have raised, and then rise again at some later stage in the debate to ask further questions. I make this final plea to the Government to find some mechanism by which in a Committee of the Whole House this subject can be discussed with the justice it deserves.
Lord Butterworth: My Lords, I should like to remind the House of the words of the Consumer Credit Act 1974. Section 50 (1) states:
"A person commits an offence who, with a view to financial gain, sends to a minor any document inviting him to … borrow money".
Under the Bill it is possible that in times of inflation the company may recover more in cash than it has lent, although in real terms graduates will repay only what they borrow. Many appeals have been made to us tonight to delay a decision on the matter in order that we may reflect and in order that we may achieve certainty. But this matter will ultimately be decided by the judges in the courts. No amount of reflection here will change that.
There is a problem and it is a technical one. When the Consumer Credit Act was passed in 1974 there were not the problems of the Bill that we have before us tonight. Therefore it is important that we should separate the two. We should make it quite clear, ex abundanti cautelâ, that what we are doing tonight does not and was never intended to fall within the words that I have quoted. Who can say that what we are producing in the Bill is a person,
"who, with a view to financial gain, sends to a minor any document"?
These two points must be kept separate. If we delay taking a decision we shall be no nearer to getting to the essence of the problem. Ultimately, the decision will be taken by the courts. Therefore we must make it clear that the Bill should not fall within the terms of the Consumer Credit Act.
Baroness Llewelyn-Davies of Hastoe: My Lords, very briefly, I should like to support the point made by my noble friend Lord Peston about the other place. The Bill has been right through another place, but there has been no consideration of the important point raised by the noble Earl about the Consumer
710
Credit Act. It is the duty of the Opposition to go into the matter not at short notice, but in detail.
We on these Benches, and I am sure noble Lords on the Liberal Democratic Benches, sympathise with the Government in their quite obvious difficulty on this point. But the Government should sympathise with the very great difficulty of the Opposition in dealing with the matter. We conceive it to be our duty to do exactly that. The noble Baroness, Lady Young, has always treated this House with great impartiality and fairness, but she rather glossed over how unusual it is that on a Bill of this kind a point of such importance should never have been considered by another place. We are quite justified in delaying it on an important new point if we can, though we probably cannot.
I should like to say— and noble Lords will understand this— that it is not up to the noble Lord, Lord Jenkin, to describe the serious points made by my noble friend Lord Peston as absurd. They were not absurd and it was his duty to make them.
12 midnight
Lord Renton: My Lords, I do not understand what has been said about the Bill being rushed through. It was brought from the House of Commons on 20th February— that is, nearly five weeks ago. It spent about the same amount of time in the other place. The point that we are now considering is really rather a narrow one to understand which does not require a great deal of study or research. As I see it, the issue is simply this. The reality of the situation is that the Bill will receive Royal Assent and there will be student loans. If there are to be student loans it would be unjust to deprive that very small minority of students who are under the age of 18 years of the advantages of the loans scheme.
However, they will be minors. In our law we have various provisions for the protection of minors. For example, in our bankruptcy law we have, very wisely, certain protection for minors. If noble Lords will be kind enough to bear with me for a moment, I need not even refer them to the provisions contained in Schedule 2 because it is clearly stated in the Explanatory and Financial Memorandum to the Bill that the schedule, among other things,
"modifies bankruptcy law by excluding sums advanced by way of loan and the corresponding debt from a student borrower's bankruptcy".
That applies to minors and to those who are older. If we are making that provision to enable minors to benefit from the provisions of the Bill, it is surely only common sense and fair that we should equally make provision so that they are not deprived of the advantage by the terms of the Consumer Credit Act 1974 on the very narrow point which is covered by the amendment. It has been said that a noble Lord opposite made heavy weather of this point. I fear that that is what has been happening so far as concerns the opposition to this simple amendment.
Lord Belstead: My Lords, perhaps I may intervene to say a brief word before any other noble Lord rises to speak and before my noble friend Lord Caithness replies briefly to this exchange. I concede and accept that there is a point of criticism here;

711
namely, the lateness with which Ministers brought forward this amendment at the Report stage of the Bill in yours Lordships' House. Indeed, in my capacity not only as Leader of the House but also as Leader on this side of the House, I apologise for the fact that this is so.
I echo what my noble friend Lord Jenkin of Roding said. It is an amendment which does not carry portentous consequences. My noble friend Lord Caithness said that it was a technical amendment for the avoidance of doubt. Once again, I must put it squarely to your Lordships that, complicated or no— and we have heard speeches in the past quarter of an hour stating that it is not as complicated as has been made out— my noble friend the Government Chief Whip and I made every effort to ensure that noble Lords opposite and those on the Liberal Democrat Benches knew immediately it was decided to put the amendment down that that was our intention. That was on Thursday of last week. Therefore there has been time for noble Lords to acquaint themselves with the contents of the amendment and to take advice.
The reason I have risen to my feet to speak is that after QuestionTime today when the noble Lord the Leader of the Opposition rose to intervene, I made two points. Despite the very strong representations which the noble Lord, Lord Cledwyn, made, I refused to agree to give any undertaking not to proceed with the amendment this evening unless there was a consensus that the House ought not to do so. I am sorry that there is no such consensus. That is quite clear.
The second thing that I said was that the Government would not attempt to bulldoze the amendment through. In other words, we would not seek to force through a vote in the teeth of a determined opposition. About two-and-a-half hours ago there were, as I know to my cost, 100 Labour Peers in your Lordships' House— I am sorry, 98 Opposition Peers, both Labour and Liberal Democrat, as well as the Cross-Benchers. There are at the moment two Labour Back-Benchers and no Back-Benchers on the Liberal Democrat Benches opposite. I have to say to the House that if that is what noble Lords opposite think about the amendment, if that is the importance that they attach to the amendment, then the moment has come to see what the House thinks of it.
Unless something new arises which any fair-minded person thinks ought to change the course of the debate, after noble Lords have had a final say and my noble friend Lord Caithness has replied, I intend to divide the House.
Lord Cledwyn of Penrhos: My Lords, I had not intended to intervene at this stage. However, in view of the remarks of the noble Lord, I have no alternative. I am both dismayed and disappointed by what he has said. How he, with all his experience, can say that he would expect a consensus in this House at five minutes past 12 on a matter of this importance is inconceivable. I am extremely disappointed by his reaction.
What has happened is that some noble Lords opposite have had the time to think about this and
712
have decided that they will oppose our point of view and seek to minimise the importance of the entire matter. That was the objective of the noble Lords, Lord Jenkin of Roding and Lord Renton, as well as the noble Baroness, Lady Young.
The fact of the matter— and of this I am perfectly confident— is that the Government are guilty of a grave defect in producing … I should be extremely grateful to the Government Chief Whip if he could sit still for three minutes. It would be most helpful to this side of the House if he did so. The grave defect is that at the very last moment in the consideration of the Bill they have produced an amendment of considerable importance. The noble Lord, Lord Jenkin of Roding, sought to say that this was a trivial and technical amendment of no great importance. It affects as many as 100,000 students, most of them in Scotland. Is that trivial? Is that technical? The House knows perfectly well that that is not the case. The noble Lord, Lord Beloff, on the Government side, was an expert in these matters. He made his concern plain during his impressive speech earlier on, as did the noble Lord, Lord Nugent. Noble Lords must not think that they can get away with that even at this time of the night.
These questions were debated in Committee upstairs in another place. There was a good deal of discussion about Scottish students. But at that stage Ministers were not aware of the defect that existed in the Bill and the mistake that had been made. They are now saying that we should accept their view that this is of no importance, at nearly 10 minutes past 12 in the morning.
I think it is unworthy of Ministers opposite and of those who have argued along those lines that they should seek to dismiss the matter at this stage. It is the duty of the Opposition to scrutinise these matters, to draw deficiencies to the attention of the House and to seek clarification. Proper clarification we have not had. I shall explain to the House why not. I think that there are serious legal implications here that have not been adequately discussed or analysed. We have not had a legal opinion from the Government and I must warn Ministers that there could well be further difficulties of a legal character arising from the 1974 Act and affecting many students. I again plead with noble Lords opposite not to take a final view on the matter this evening. I make that plea in no party spirit at all but out of a sense of duty. If we are anything, we are a revising Chamber and it is our duty to ensure that Bills leave this House in as constructive and final a state as we can ensure. If we proceed on the grounds that this is an unimportant, technical and trivial matter and that it does not deserve further consideration, the responsibility will lie with noble Lords opposite.
The Earl of Caithness: My Lords, we have had a short, interesting and useful debate which has covered most of the points involved. I shall therefore deal with the matters of concern. I believe that the important point was encompassed by the question posed by the noble Earl, Lord Russell, who said that he was not clear what the effect of not having the amendment would be and that if he was clear on that he could decide whether to support the amendment.

713
Let me make it absolutely clear that the effect of not having the amendment could be that the scheme would be unworkable. The reason for that is that the courts might consider that the company was acting with a. view to financial gain out of the loans because in cash if not in real terms it would expect to recover more from the individual student than it lent. On the other hand, the courts might recognise that in the exceptional circumstances of the company and of these loans no question of a gain accruing to the company arose.
The noble Lord, Lord Peston, said, in what I thought was an unconvincing plea not only to defer the matter to another stage but also as a means to delay the Bill, that the position was uncertain. The noble Lord and the noble Earl have been looking for that opportunity for some time. However, there is no better reason for the amendment than the argument that the noble Lord, Lord Peston, advanced. That is why it is needed; its purpose is to avoid doubt.
The noble Lord, Lord Peston, also asked why we called this a technical amendment. It is a technical amendment in as much as it makes clear on the face of the Bill what most people would in any case believe to be the true position; namely, that the company will not be operating with a view to financial gain out of the loans. Most people would reach that conclusion by considering two questions: first, will the company recover in real terms more than it lent? The answer here is an unequivocal no. It is quite the reverse. Some borrowers will have their loans cancelled. Therefore in total the company will recover less in real terms than it has lent. Secondly, will the company retain for itself any of the money it recovers? Here again the answer is an unequivocal no. It will return all the money recovered to the government of the day. However, as my noble friend Lord Butterworth said, the matter will be for the courts to decide at the end of the day. That is; why we must make the position absolutely clear an this stage.
The noble Earl, Lord Russell, asked whether loans to minors were enforceable. Loans to minors in Scotland will probably be enforceable under Scottish law. Elsewhere the position is that such a loan will probably not be enforceable unless the minor ratifies it on reaching his majority, as it is not made for the purchase of necessaries. Where appropriate, we shall ask minors who have received loans to ratify them on reaching their majority. If they decline to do so, no action will be taken against them but they will not be entitled to receive any further loans under the scheme. That strikes an appropriate balance between the rights of the student and those of the taxpayer.
I had hoped that the noble Lord, Lord Monkswell, had read my words before he took his place in the Chamber. I was interested to note that he takes part in our proceedings now when he has had plenty of opportunity to do so before now. The noble Lord said that we were not taking account of what had happened in Scotland. That is utter rubbish. My right honourable friend the Secretary of State has had the benefit of a Scottish education, as has the
714
noble Lord, Lord Addington. I would ask the noble Lord, Lord Addington, how many people at Aberdeen University were 17 year-olds. The noble Lord has been talking quite a lot about loans and he has been involved in all the stages of the Bill. He knows full well, as does anyone who has looked at this matter, that loans to 17 year-olds are very much on the cards. If the noble Lord had any doubts, he should have raised them at an earlier stage. The noble Lord, Lord Cledwyn of Penrhos, said 100,000 students are affected. How are they affected by this Bill?
Lord Cledwyn of Penrhos: My Lords, they are affected because they are minors.
12.15 a.m.
The Earl of Caithness: No, my Lords, not 100,000; it is 8,514. It is nowhere near 100,000. Of that figure, in universities in England there are 1,209. In Wales— the Kingdom of which the noble Lord is so proud, and rightly so— the number is 52; in Scotland it is 3,304. In polytechnics and colleges in England it is 710, in Wales it is eight, and in Scotland it is 3,231. In Scotland 6,535 students are minors. Is the noble Lord, Lord Addington, saying there was none at Aberdeen?
Lord Addington: My Lords, I was always aware that there were students who were minors at the universities in Scotland. The nature of the system is that there is a higher percentage of home students. I never assumed that the Government would have overlooked something like that.
The Earl of Caithness: My Lords, we have not overlooked it. The noble Lord has overlooked it. What we are seeking to do—
Baroness Seear: My Lords, it is slightly odd that the Minister should accuse my noble friend of having overlooked something when the whole point of this amendment, as I understand it, is an admission that the Government have overlooked it, otherwise why is this amendment here except to put right that the Government have overlooked it? The noble Earl may have some reason for complaint about this debate, but it certainly cannot be that.
We have considerable reason for complaint, for this matter has been delayed until now when we should have discussed it and dealt with it much earlier in the day when we raised it after Question Time. We have waited until the Government have been able to get a full House at last, with the result that we are debating it at a considerable disadvantage at a quarter past twelve.
The Earl of Caithness: My Lords, I rephrase what I said. The noble Lord, Lord Addington, appears to have overlooked it. He admits that there were 17 year-olds at Aberdeen University. If there was any doubt, if there had been anything that I said that would not mean that minors would be getting loans, I think that that would have been taken up by your Lordships. My noble friend the Leader of the House has more than fulfilled the obligations that he gave to the House this afternoon. I commend the amendment.
Earl Russell: My Lords, before the noble Earl sits down, can he help us a little further? Are there any other provisions concerning minors which may come up and ambush this Bill in the future? If it is necessary for 17 year-olds to ratify the loan on reaching their majority, can he tell us whether any procedure has yet been devised to make sure that they do so?
The Earl of Caithness: My Lords, as I understand it, a procedure has been devised. So far as concerns the first question, I am not aware of anything else.
On Question, amendment agreed to.
Earl Russell Earl Russell moved Amendment No. 50:
Page 4, line 51, at end insert—
(" (8) No person exercising a right of recovery of loans shall approach or otherwise seek information from any referee, teacher or other person who is or has been in a position of responsibility or trust in relation to the borrower and no such person shall be required to act as a guarantor")
The noble Earl said: My Lords, this amendment deals with the status and obligations of referees as laid down under the Government's leaflet. I should like to thank the noble Earl for a letter that he sent to me today about this point. I found that letter distinctly helpful. What I hope to probe a little further is how helpful? The question of referees being used as an extra law enforcement agency— being used, in effect, to shop those who default on their loans— concerned a good many of us when this matter was discussed at an earlier stage of the Bill.
When we discussed the subject in Committee, the noble Earl was quite ready to defend that form of usage. He now tells me— I hope he will spell this out a little further to the House as he did in his letter to me— that what concerns him is simply the use of referees to provide addresses when the Student Loans Company has by sheer accident lost touch with the people with whom it has to make contact. That sounds very different. I am trying to find out whether that is a difference of substance or a case of the noble Earl having achieved better presentation and not having changed the substance all that much. That is what will determine whether those who act as referees will see the process as a breach of trust.
The point about trust is that the referee has the information which makes him useful to the Student Loans Company precisely because he is trusted by the borrower and therefore because the borrower, having that trust, will make the information available to him. If he should abuse that trust by acting against the borrower's interest, he would not expect to receive any further information. Thus, if referees are to be used in effect as a kind of extra law enforcement agency, they will find that, if the people concerned want to default, they will break contact with their referees.
If those referees are parents, for example, as the noble Earl suggested in Committee, that might be a cause of double grief. I do not quite see how one can draw a line by which the noble Earl's procedure for simply giving information, which is acceptable, crosses over a line and becomes a procedure for shopping, for getting into trouble and for law enforcement, which would be a breach of trust. I do
716
not see how one separates one thing from another and I should be grateful for a little further explanation.
Baroness Blackstone: My Lords, like the noble Earl, Lord Russell, I have seen the letter that the noble Earl, Lord Caithness, sent to my noble friend Lord Peston, which I imagine is identical to the letter that he sent to the noble Earl. I am a little puzzled by one or two points in the letter, but I should like to say that I am grateful for the explanation that referees will not be asked to guarantee the loan in any way. That is a step forward.
However, I understand that it is now intended that referees should be used to check up on the addresses of students or ex-students who cannot be contacted directly by the Student Loans Company. For that purpose, I gather it is considered appropriate that one referee should be a relative, probably a parent, and that the second referee should be a good friend.
I am not utterly convinced that all parents will be willing to provide references. Many will, but some will not. Nor am I utterly convinced that all parents will be willing to let the Student Loans Company know where their children are after they have graduated, possibly abroad, particularly if they think that that could lead to the imposition of the various penalties that are set out in the rules and regulations about the operation of the scheme.
On the question of good friends, I had many good friends when I was 18 who, unfortunately and regrettably, were no longer good friends by the time I was 25, not because I had fallen out with them, but simply because one loses touch with friends that one has at the age of 18 as one moves on. I am sure that many other noble Lords will have had the same experience.
Moreover, it seems to me that a good friend, as opposed to a friend, might well feel that it is inappropriate to let the Student Loans Company know where his or her good friend is if the company is seeking to catch up with someone who is likely to default on a loan.
As a result, I cannot quite see the purpose of continuing with a system of referees of this kind now that we know that we shall not use them as guarantors. I should be grateful if the noble Baroness when speaking for the Government can elucidate a little further and say whether anything will be achieved by this amendment.
Baroness David: My Lords, perhaps I may ask one question. Will the under-18s have to have a guarantor? I understand that when under-18s borrow from banks they have to have a guarantor.
Baroness Blatch: My Lords, we had a full and illuminating debate on this amendment at Committee stage and I believe that it was explained to the Committee's satisfaction that there was no question of referees being asked to act as guarantors for a loan taken out by a student under the scheme. I think that that point has been taken by the noble Lords who have so far spoken in the debate.

717
Noble Lords were also concerned about the general principle guiding the use of referees within the administration of the loans scheme and we agreed to look at this matter again and bring noble Lords' concerns to the attention of my right honourable friend.
It is quite true that we intend that applicants for loans under the scheme should be required to provide the names, addresses and telephone numbers of two referees, one of whom will be related to the applicant. The reason for seeking that information is straightforward and entirely proper. It is that students generally leave their parents' home at the same time as they leave their college after completing their course. In certain cases, they may omit to inform the Student Loans Company of their new address. The company will therefore need to be able to trace those borrowers through their referees. It is in the interests of the borrower as well as those of the company and the scheme that this should happen. The company will ask referees to provide only borrowers' up-to-date addresses. It is important to keep on emphasising that referees will not be held liable for the loan.
If the company does not have the borrower's current address, it cannot send him his annual statement and it cannot contact him if he falls into default with repayments. In cases of default, it will be important to establish contact quickly. Delay will merely increase the size of the outstanding arrears and make the borrower's position more difficult. Asking for referees is therefore a safeguard for the student, for the company, and, crucially, for the taxpayer.
We shall ensure that it is made clear to students in the guidance notes provided with the application form that students must check with the persons whom they nominate as referees that they are content for their names to be given for the purposes proposed. I think that that was a point raised by the noble Earl, Lord Russell, at Committee stage.
The scheme provides top-up loans to students under very generous conditions. Not only will the borrower not be charged a real rate of interest on his loan, but there are also generous provisions entitling him in some circumstances to defer his repayments or to have his loan cancelled. The company should have all lawful options at its disposal when seeking to recover loans that are in default. Again, it is important to remember that default in payment places an unfair burden on the taxpayer and the cost of the scheme.
The noble Baroness, Lady David, asked a specific question about how this provision applies to the under-18s. I do not have that specific information to hand and perhaps I could write to her. I understand it to be the case that no guarantor would be required for under-18s.
I am not absolutely certain what is the fear behind the amendment. Liability is not afforded to the referees and the purpose of the referees is simply to gain addresses when young people move on from one address to another. That is the normal practice in all other forms of business transaction.
718
With the assurance that has been given in that reply, I hope that the noble Earl will feel able to withdraw his amendment.
Earl Russell: My Lords, I thank the noble Baroness for that reply. I must confess that I am still a little confused. I do not quite see how the institution of the referee as described adds to the fact that parents normally forward their children's post after they have left home. Simply conveying the information to the child, or telling the child that he or she ought to pay the loan, and putting pressure on him to do so, is something that one might reasonably expect from any parent.
I am not clear whether this issue will cross the line where the parent, referee, or whoever, becomes an agent of law enforcement. I am therefore still unhappy about the matter although not so unhappy as I was at Committee stage. However, I am glad to see some signs of new thinking. In the hope that there may be opportunity for further consultation later, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
12.30 a.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 51:
Page 4, line 51, at end insert—
("Restriction on disclosure of information
3A.— (I) No person or body having by virtue of paragraph 3 above the function of making and recovering loans shall provide or make available to anyone else (whether for consideration or not) any information held for the purpose of discharging those functions if the information is to be used for soliciting custom for goods or services.
(2) As respects information constituting personal data for the purposes of the Data Protection Act 1984 sub-paragraph (1) above is without prejudice to the requirements of that Act but applies irrespective to any consent given for the purposes of that Act by the person to whom the information relates.").
The noble Lord said: My Lords, the Government have previously taken the view that it would not be appropriate to impose restrictions on the use of information by the Student Loans Company, additional to those imposed on other companies operating in the private sector. Our belief has been that the company should operate on a par with other companies and should be treated neither more nor less generously in legislation.
However, during the debate on data protection in the Committee stage of the Bill last Monday, strong opinions were expressed and convincing arguments made on both sides of your Lordships' House, for the company to do more than merely satisfy the minimum requirements of the Data Protection Act. I undertook to consider this question. The Government wish industry and commerce to be in no doubt about their commitment to the protection of personal information. We therefore now feel it is right to impose certain additional restrictions on the use of information by the company.
In the debate earlier this evening on Amendment No. 25, I informed the House that this amendment would prevent the company from providing or making available to a third party (whether for sale or otherwise) any information that it holds for the purpose of discharging its functions under the scheme, if the information is to be used for soliciting

719
custom for goods or services. The amendment would apply in respect of both electronically and manually held information.
The amendment would not prevent the disclosure of information to third parties where the information will not be used for soliciting custom for goods or services. In particular, the company must be able to disclose information to credit reference agencies and debt collection agencies about a borrower who has defaulted on repayments. When taking out a loan, applicants will be told that the company reserves the right to disclose personal information in such circumstances. Such disclosure, in respect of electronically held data, would of course be subject to the provisions of the Data Protection Act.
The amendment represents a significant additional restriction on the use of information by the company, following the concern expressed by certain of your Lordships during Committee stage. I hope that your Lordships will therefore welcome it as evidence that the Government are fully committed to the protection of personal data and to the encouragement of good practice.
I commend this amendment to your Lordships. I beg to move.
Baroness Blackstone: My Lords, the Minister may be surprised but I welcome the amendment. I am very grateful to him for bringing it forward. There are a couple of questions that I should like to put to him.
First, I am not entirely clear whether the amendment would stop the Student Loans Company instituting its own mail order business and soliciting custom from graduates if it chose to do so. I should be grateful for a reply on that.
Secondly, I am not clear whether the Bill might benefit from a definition of "personal data" or whether the definition in the Data Protection Act would apply. It would be extremely helpful if the noble Earl could answer those questions.
Earl Russell: My Lords, I should like to thank the noble Earl very warmly for what he said in introducing the amendment. I also have to say to the House that, to my great regret, I shall not be able to be at Third Reading since I shall be in America. Under those circumstances I hope that the House will forgive me for saying a very few words of what I might have said on the Motion, That the Bill do now pass.
I should like to thank the noble Earl and the noble Baroness, Lady Blatch, for the way in which they have handled the Bill. We have had experience of the noble Earl before, and he increased his standing with his handling of the Local Government Finance Bill. Anyone who can do that deserves a very great deal of credit. It is the first time that I have had the privilege of debating opposite the noble Baroness. She seems to me to be very much of the same school. She and the noble Earl are good soldiers. They fight their cause hard. They fight it well, and my liking for them as well as my respect for them has increased
720
during the progress of the Bill. I thank them very much.
I shall not enlarge, the noble Lord, Lord Denham, will doubtless be delighted to hear, on the Bill itself. I only say that I hope that it will work. I shall do my best in so far as it falls to me to try to make it work. However, I hope that the Government will not give us a Bill of quite this sort again.
The amendment seems to me to meet the point about the security of the mailing list of the Student Loans Company. In that way it represents a substantial concession and I am very pleased to welcome it.
The Earl of Caithness: My Lords, perhaps I may deal first with the remarks of the noble Earl, Lord Russell. We shall miss him at Third Reading. I am extremely grateful for his kind remarks, and particularly for the role that he will play in his institution if the Bill becomes an Act, which it has not done yet. I am sure that we all hope vehemently that it will do so as soon as possible. I know that the noble Earl will read with his usual diligence the Official Report of our proceedings at Third Reading. If he has any concerns between now and the time when he goes to America, my door is open and I am willing to talk to the noble Earl.
The noble Baroness, Lady Blackstone, raised two points. Regarding the giving of personal data, the definition of personal data is contained in the Data Protection Act and is covered by the amendment. I missed the other point, but perhaps I may look at that in the cold light of day and give her an answer.
On Question, amendment agreed to.
[Amendments Nos. 52 and 53 not moved.]
Clause 4 [Short title, citation, interpretation and extent]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 54:
Page 2, line 38, after ("2") insert ("and, as respects institutions in Northern Ireland, the power to make regulations under paragraph 2 of Schedule 2").
The noble Earl said: My Lords, Amendments No. 54 was spoken to with Amendment No. 35.
As this is the last amendment, I should like to thank all your Lordships for your great courtesy and help. I should also particularly like to thank the officials, since this is the third night on which we have kept them rather later than I had hoped. I beg to move.
On Question, amendment agreed to.

British Film Institute Southbank Bill
Returned from the Commons with the amendments agreed to.
House adjourned at twenty-two minutes before one o'clock.

  CZECHOSLOVAKIA: KNOW-HOW FUND
  CZECHOSLOVAKIA: KNOW-HOW FUND
  THE BALTIC STATES: POLICY
  THE BALTIC STATES: POLICY
  ETHIOPIA: BOMBING OF FAMINE RELIEF DELIVERIES
  ETHIOPIA: BOMBING OF FAMINE RELIEF DELIVERIES
  ETHIOPIA: POLICY OF GDR
  ETHIOPIA: POLICY OF GDR
  NUCLEAR NON-PROLIFERATION: EFFECT OF TEST BAN
  NUCLEAR NON-PROLIFERATION: EFFECT OF TEST BAN
  FIREARMS LEGISLATION: CONSOLIDATION
  FIREARMS LEGISLATION: CONSOLIDATION
  ANIMAL FEED LEAD CONTAMINATION: CONSUMER PROTECTION
  ANIMAL FEED LEAD CONTAMINATION: CONSUMER PROTECTION
  SALMONELLA: CONTROL IN THE EC
  SALMONELLA: CONTROL IN THE EC
  INTERVENTION BOARD FOR AGRICULTURAL PRODUCT: AGENCY STATUS
  INTERVENTION BOARD FOR AGRICULTURAL PRODUCT: AGENCY STATUS
  ENGLISH HERITAGE AND DOE: STAFFING
  ENGLISH HERITAGE AND DOE: STAFFING
  STUDENT LOANS: REPAYMENT PERIOD
  STUDENT LOANS: REPAYMENT PERIOD
  STUDENT MAINTENANCE: EQUIPMENT
  STUDENT MAINTENANCE: EQUIPMENT